Bo Hektor

Critical factors to bioenergy implementation

Abstract Barriers to bioenergy technology implementation have received increased attention in recent years. This paper contributes to the identification and analysis of barriers and drivers behind bioenergy market growth, here labelled “critical factors”. It presents a framework for the analysis of both existing and projected bioenergy market potential, using economic concepts and models from transaction cost theory and industrial organization. The framework can be used for assessments of the potential for market growth of different bioenergy systems by decision makers in administration and industry. The following critical factors are identified: Integration with other economic activity, Scale effects on bioenergy markets, Competition in bioenergy markets, Competition with other business, National policy, Local policy and local opinion. The framework is demonstrated with five cases of real bioenergy markets: Pellet residential heating in USA, bioenergy power in USA, pellet residential heating in Sweden, biomass district heating in Sweden, and biomass district heating in Austria. Different applications of the framework are discussed.

Willow growers in Sweden

Abstract The number of willow plantations on Swedish farmland increased considerably between 1991 and 1996. The main driving forces behind this development were: (1) The introduction in 1991 of a new agricultural policy in Sweden which, through deregulation, created lower grain prices and simultaneously introduced compensation for set-aside land as well as subsidies for willow plantations on surplus arable land; (2) higher taxes on fossil fuels; and (3) the existence of a biofuel market in Sweden based on forest fuels. This paper presents a statistical study of willow growers in southern and central–eastern Sweden. Data about willow growers and a stratified random sample of non willow growers were acquired from the 1995 Farm Register compiled by Statistics Sweden. Willow growers are described according to geographical distribution, willow parcel sizes, farm sizes, and farm types. Comparisons are also made with the population of farmers who are not growing willow. A high concentration of willow growers is recorded for central Sweden around Lake Malaren. Willow growers are more often in the age span 50–65 years, and as compared to non-willow growers, have larger farms. They are less often focused on animal and milk production, and more often on cereal and food crop production, when compared with other farmers. Implications of the Swedish experience for policy making in the fields of energy and agriculture are discussed.

Farm-related factors influencing the adoption of short-rotation willow coppice production among Swedish farmers.

The area of short-rotation willow coppice energy plantations on Swedish farmland increased quickly in the early 1990s because of subsidies for energy crop production, an increased CO2 tax on fossil fuel and an already existing biofuel market in the country. In this study farm-related determinants for the adoption of short-rotation willow coppice production among Swedish farmers are identified and estimated. A Tobit model is applied to cross-sectional data on Swedish farmers in 1995. The results show that the decision to plant willow and the areas planted depend positively on arable land area, forest land area, the area of other land types, leasing out of arable land and tractor ownership. Negative factors are pasture area, tenancy and animal production. Differences in willow growing between ownership types, age groups and geographical regions are also important. The policy implications of the results are discussed.

Cost effectiveness of measures for the reduction of net accumulation of carbon dioxide in the atmosphere

In this paper a method is presented for comparison of the cost effectiveness of mitigation of net emissions of greenhouse gases, mainly carbon dioxide (CO2), by measures carried out in different parts of the carbon cycle. The method is applied on forest production and wood fuels. Two roles are distinguished for forests in the carbon cycle: the role of biomass build-up, e.g. the process to fix carbon into biomass from CO2 in the atmosphere, and the role of a carbon store in wood and other biomass to be used as a sink or as a source for wood fuels. The two roles are interdependent and are related to the age of trees and other conditions of the forest stands, and can be influenced by forestry activities. The costs of reducing CO2 emissions by using wood fuels substituting fossil fuels are analysed and presented for a situation represented by the Swedish district heating system. It was found that the costs of replacing fossil fuels by biofuels generally are considerably lower than the corresponding level of the Swedish taxes on fossil fuels. In some cases wood fuels were found to be cheaper than fossil fuels irrespective of taxes. Comparisons between the costs of mitigation measures to reduce CO2 net emissions by wood fuel combustion and those aiming at increased storage of carbon in the forests strongly indicate that combustion measures are more cost effective, especially in a long perspective.

A Geographical Analysis of the Swedish Woodfuel Market

The geographical variation in Swedish woodfuel market characteristics for the district heating sector has been studied using Geographical Information Systems (GIS) and cross - sectional Tobit analysis. The results indicate that local availability and competition for woodfuels influence the woodfuel consumption at inland heating plants. The factors affecting the decision to use woodfuel at heating plants close to seaports, however, were not captured by the model, suggesting that coastal location reduces dependency on the local woodfuel market. The effects of changes in local woodfuel availability on woodfuel use by an inland heating plant are presented and discussed.

Planning models for bioenergy: Some general observations and comments

Planning takes place at different levels in society and for many reasons. Some planning models focus on values, e.g. resource planning models, others on costs which is especially relevant in project planning, and still others, e.g. models for business management planning work with money as the basis for the planning. Thus, the three concepts value, costs and money are fundamentally different in spite of the fact that they are expressed in the same units (

Woodfuel procurement strategies of district heating plants

, £, SEK, etc.) In this paper arguments are given that these concepts should be kept separate in planning models and, more generally, that different planning conditions call for different and often specific planning models. The particular characteristics of the field of bioenergy make these points even more relevant when applied to bioenergy activities rather than to more general planning.

Financing Bioenergy Trade: Making It Happen

Woodfuel use in the Swedish district heating sector increased significantly from 1985 to 1999. This study analysed strategies and considerations concerning woodfuel procurement in district heating plants. Priorities and concerns in the industry involved an increased woodfuel share, ambitions to create an environmental image, cost minimisation, awareness about the role of energy policies for fuel choice, improvement of woodfuel quality and the ambition to maintain a competitive woodfuel market with several suppliers. Factor analysis yielded five dimensions in the woodfuel procurement strategies among the district heating companies: (1) increased woodfuel use; (2) import; (3) spot market woodfuel purchases; (4) focus on refined woodfuels; and (5) using price only when deciding whether to use woodfuels or other fuels. Five clusters were defined along the three strategy dimensions (1)–(3). The clusters differed concerning size, experiences from the introduction of woodfuels, perceptions about woodfuels and strategies employed to date. This paper describes different strategies that the district heating companies apply on the woodfuel market. The conclusion is that policies should consider this diversity in procurement strategies, mitigate their negative side-effects and assist to make them cost-effective.

Developments in international bioenergy trade

The development of sustainable biomass supply chains for international biomass trade are a prerequisite to foster the growth of bioenergy applications worldwide. Setting up these supply chains is offering a broad array of interesting investment opportunities that could offer stable, long term and high returns. However, investment in the bioenergy supply chains is perceived by the finance sector to be risky and uncertain and therefore many projects do not materialize. At present, insufficient financing is an obvious obstacle for the development of efficient supply chains. In the chapter attempts are made to analyse and elucidate the causes for that perception in the finance sector and to suggest remedies. This chapter also highlights the different areas of investment that exist, the most important stakeholders along the investment process, the challenges that exist along certain bioenergy value chains and the need for far sighted and sound policy making to support and secure long term sustainable business models.