An economic assessment of the use of short-rotation coppice woody biomass to heat greenhouses in southern Canada

This study explores the economic feasibility of fossil fuel substitution with biomass from short-rotation willow plantations as an option for greenhouse heating in southern Ontario, Canada. We assess the net displacement value of fossil fuel biomass combustion systems with an integrated purpose-grown biomass production enterprise. Key project parameters include greenhouse size, heating requirements, boiler capital costs and biomass establishment and management costs. Several metrics have been used to examine feasibility including net present value, internal rate of return, payback period, and the minimum or break-even prices for natural gas and heating oil for which the biomass substitution operations become financially attractive. Depending on certain key assumptions, internal rates of return ranged from 11-14% for displacing heating oil to 0-4% for displacing natural gas with woody biomass. The biomass heating projects have payback periods of 10 to >22 years for substituting heating oil and 18 to >22 years for replacing a natural gas. Sensitivity analyses indicate that fossil fuel price and efficiency of the boiler heating system are critical elements in the analyses and research on methods to improve growth and yield and reduce silviculture costs could have a large beneficial impact on the feasibility of this type of bioenergy enterprise. (author)