Strategic role and risks of energy crops in utility power

Biomass supply is perhaps the most critical economic aspect of industrial biomass-based operations. The issues involve biomass cost, constancy of cost, assurance of supply, the right quality of biomass, and the environmental effects of growing and utilizing biomass. This has certainly been the view of the pulp and paper industry (Scott Paper, James River Corporation, Boise Cascade, Potlach, Union Camp, Aracruz, and Westvaco, personal communication). Biomass energy operations share the same concern. Since the early-to-mid 1980s, the rate of installation of new biomass energy facilities has declined (USDOE 1992). The forces causing this are: (a) falling prices of conventional fuels, (b) expiration of favorable by-back electricity, (c) more competitive biomass bidding, (d) elimination of federal tax credits, (e) increased competition for low- and zero-cost biomass, and (f) confounding local, state, and federal regulations. From the standpoint of biomass supply, competition for limited wastes and residues is beginning to change biomass procurement plans of established biomass energy facilities (Biomass Processors Association, personal communication). Pre-collected inventories must now be complemented with the active production and collection of dispersed biomass. This collection brings with it the responsibility of managing biomass on a sustainable and economic basis within environmental constraints. These developments highlight the critical role of biomass supply to the energy industry and the need for sophisticated supply planning. This paper addresses the strategic role of energy crops in developing assured feedstock supplies