The 2008 World Bioenergy Conference in Sweden made it clear that many countries in Europe have warmed up to the reality of producing energy from biomass, particularly wood. But is the heat spreading to North America?

In fact, it's already here. Currently, in the U.S., 1 percent of the nation's power, 1600 megawatts, is produced from biomass. In Canada, the figure is about 6 percent. Plans for more biomass-fired power plants are moving ahead in both countries. A large number of wood-fired power plants are currently operating in the state of Maine and, consequently, logging operators in the northeastern U.S. are harvesting biomass to fuel them.

For others who might be thinking of getting into the biomass business, the burning question is, can you make money at it?

The short answer is yes, according to Eric Kingsley, vice president of Innovative Natural Resource Solutions, a consulting firm with offices in Maine and New Hampshire. INRS specializes in forest policy, renewable energy, environmental auditing, land conservation and wildlife management.

Kingsley works with developers of biomass energy systems to procure their fuel supply and, as such, is well-acquainted with the supply base. "The people successful at making biomass work are also successful with sawlog harvest and pulpwood," he says. They're experienced operators who have figured out economical ways to make every aspect of their harvesting operations work.

And that's the key. "Biomass harvesting is not a stand-alone business," Kingsley stresses. "I've known some who tried. In most cases the projects never got off the ground and I don't know anybody who has made it work." But for someone already in logging or sawmilling it could be a worthwhile secondary operation. "Bioenergy is not a fad that's going to fade away," he says. "It's here to stay. And as a carbon tax comes in, the sector will grow."

 

Although the market price for biomass is still low, it has been creeping up slowly. "Wood biomass prices in the northeast have doubled since 2000, from under $20 a delivered ton to the $40 range," says Kingsley. But he stresses that during the same time, oil prices have quadrupled.

Which brings up issue number two: at today's fuel prices how far can you afford to deliver the product? "Biomass doesn't travel as far as other products," says Kingsley. "Not more than a hundred miles. Markets are all local."

Another vital question is what kind of production system to use. According to Kingsley, there is no ideal biomass system. "The pursuit of the ideal system doesn't make sense until biomass prices are higher," he notes. "In the northeast, one of the systems that's most effective is the shear grapple skidder with a slasher/delimber and chipper at the landing. Some use forwarders with limited success. Some also use whole trees or parts of whole trees. Whatever is left after separation of the lower portion of the tree  - everything but the sawlog - goes to the chipper."

Equipment setups vary depending on what loggers already have and what they can afford. "The buy-in to add biomass production to a conventional logging operation can be as much as $300,00, for a chipper and two box trucks,"  Kingsley estimates. 

And although equipment choice matters, he says it often comes down to operator ingenuity and experience, the classic story of knowing how to get the most out of your equipment and your wood.

 

Kingsley describes his job of securing biomass for his power plant clients as "looking at spots at the edge of procurement radiuses of pulpwood production." Although biomass prices are low, the demand is steady, and other industry sectors like pulp and panel mills compete for fiber supply.

"The priorities for power plants are assurance of supply, price stability and then price," Kingsley explains. "Every facility has its own specifications for fuel - pellets, construction debris, even certain species, like maple. Some small community thermal systems can only use pulpwood-type chips." Reliable supply from the logging community is the key to continued operation.

Kingsley sees standardization in the area of supply as essential for further growth of the industry. "The logging community functions on the basis of relational buying, without contracts, sealing deals with handshakes that can last for decades. That works well for established industries like lumber and pulp, but it's hard to go to a bank and get $200 million to start up a power plant based on procurement handshakes with a dozen loggers. If wood is going to reach its potential as an energy source there will have to be more formalized relationships between sellers and buyers."