Making ‘cents’ of agricultural biomass
November 22, 2012, Guelph, ON - The financial reality of agricultural biomass is at the center of discussions taking place during a seminar at the University of Guelph today.
Officials from all three levels of government, as well as stakeholders from across the agriculture industry, are taking part in the discussions at the Agricultural Biomass Business Forum, aimed at gaining a greater appreciation for the financial reality of agriculture biomass and its growth in the province of Ontario.
The start of the seminar focused on a recently released report by OMAFRA called Assessment of Business Case for Purpose-Grown Biomass in Ontario. The 44-page report presents current estimates for each stage of production of a variety of biomass crops in Ontario, with particular emphasis paid to miscanthus, switchgrass and sorghum. The figures included cost of production, transportation, and storage, and compared the final values to other current energy sources available in Ontario.
The resulting valuation placed the agri-biomass crops at a cost that was more expensive that coal and natural gas energy production, but at a competitive cost to propane, diesel, and heating oils. That was a market that Aung Oo, lead author of the report, understood was a target for the agricultural biomass industry.
“Heating oil and propane replacement in northern and remote communities are seen as targets for biomass production,” said Oo, who works out of the Western University Research Park in Sarnia, Ont. “According to our estimates, it would take three million tonnes of biomass per year to replace this.”
While that is a market that the wood pellet industry is also expected to compete for, opportunities are there for agri-biomass to compete. Miscanthus, switchgrass, and sorghum pellets are currently a higher cost pellet to produce than wood pellets, but Oo sees potential for a more competitive financial model.
“The key to the agricultural biomass business model is improving the yield,” said Oo. “We need to be investing in those genetic improvements in order to improve the yield in order to provide a solid business case.”
The Agricultural Biomass Business Forum is being held at the University of Guelph Arboretum in Guelph, Ontario.