Erik Trømborg

Bioenergy from the forest sector: Economic potential and interactions with timber and forest products markets in Norway

Abstract A partial equilibrium forest sector model which is augmented to include bioenergy was applied to project the use of bioenergy based on forest fuels and forest industry by-products in Norway for three different scenarios of the future prices of electricity and oil. The impacts on forestry and forest industries of the different energy price scenarios were also studied. The advantage of the suggested methodology is that it allows for assessments of the economic potential of bioenergy, taking into account the competition for raw materials, the specific heat demand of various regions, and interregional and international trade. Bioenergy will, according to this study, be fairly competitive in some market segments with the current price levels of electricity and oil, and only a minor increase (decrease) in energy (roundwood) prices would release substantially increased bioenergy production levels. Pulpwood prices of pine and non-coniferous species are projected to increase substantially when assuming increasing energy prices. Except for particleboard mills, production levels of forest industries appeared relatively insensitive to the energy price changes.

The global timber market: implications of changes in economic growth, timber supply, and technological trends

Abstract A partial equilibrium model was applied to the global forest sector in order to assess regional and global impacts of changes in economic growth, timber supply potentials, and technical trends. The model uses recursive price-endogenous linear programming and deals with eight geographical regions and 16 products. The base line projections of the model gave an average annual increase in global supply of industrial roundwood of 1.2% until the year 2010. The real price of sawlogs and sawnwood was found to remain approximately constant, whereas the prices of pulpwood and particles increased significantly during the first years, and then declined after the year 2000. The real prices of pulp and paper increased less than those of pulpwood and particles. The assumed variations in GDP growth rates had limited influence on quantities supplied and traded due to restricted timber supply potentials, but affected the real prices, especially of pulpwood and particles. Changes in the assumed timber supply potentials and technical change affected the real prices of pulpwood and particles significantly. Introduction of a price responsive timber supply also dampened the price peaks of pulpwood. Possible improvements of the methodology include empirical estimation of timber supply and of key parameters that determine capacity expansion, trade inertia, and technical changes.

Economic and environmental impacts of transport cost changes on timber and forest product markets in Norway

Abstract Forestry and forest industries are transport-intensive sectors. In Norway, the forest sector (forestry and forest industries) represents less than 1% of gross domestic product, but 14% of the total road transport work. Road transport represents 19% of the greenhouse gas (GHG) emissions in Norway. This article is an analysis of the economic and GHG emission impacts of the following three transport policy scenarios targeting the forest sector in Norway: (1) increased fuel prices, (2) increased allowable total weight for log trucks, and (3) accelerated infrastructure development. Three different models were combined in the analyses: a national full equilibrium model, a national transport logistics model and a regionalized partial equilibrium forest sector model. The results showed that increased maximum total weight had a greater economic impact on transport costs for roundwood than for forest industry products. Elimination of bottlenecks, such as bridges with limited allowable weight, is needed if the full potential of increased total weight is to be utilized. General infrastructure measures in the main road network had greater economic impacts on forest industries than on forestry. The short-run regional effects of changes in transport costs on production and trade-flows were, however limited, mostly in the range of 1–2%. Increased total weight brought increased emissions of GHGs, owing to transfer from rail to road, whereas accelerated infrastructure investment and increased fuel prices yielded reduced emissions, although the effects were relatively small, in the range of 0.5–1%.

An assessment of forest sector modeling approaches: conceptual differences and quantitative comparison

Forest sector models are widely used for policy and economic analyses. Basic assumptions vary considerably between models, but little attention has been paid to the impacts these differences may have on model results. Norway provides a great opportunity to fill this void as it has two forest sector models currently in use based on different modeling assumptions, but sharing the same data source. In one model, agents are assumed to be myopic in the meaning that they rely only on the current market conditions. Harvest behavior is in this model based on econometric relations and exogenous forest growth rates. The second model approach employs extensive forest data and assumes that agents have perfect information over the model time horizon. We discuss the differences between the two modeling approaches and compare quantitatively the model results of two case studies. However, both types of models are rather sensitive to changes in assumptions and data. The strengths and weaknesses of the two model approaches and their appropriateness for responding to the study questions should be considered when choosing modeling methodology. Using both models in parallel removes the uncertainty caused by the foresight assumption/optimization routine and thus provides in total more information.

Optimization of Biomass Transport and Logistics

Global demand for lignocellulosic biomass is growing, driven by a desire to increase the contribution of renewable energy to the world energy mix. A barrier to the expansion of this industry is that biomass is not always geographically where it needs to be, nor does it have the characteristics required for efficient handling, storage, and conversion, due to low energy density compared to fossil fuels. Technologies exist that can create a more standardized feedstock for conversion processes and decrease handling and transport costs; however, the cost associated with those operations often results in a feedstock that is too expensive. The disconnect between quantity of feedstock needed to meet bioenergy production goals, the quality required by the conversion processes, and the cost bioenergy producers are able to pay creates a need for new and improved technologies that potentially remove barriers associated with biomass use.

Medium and Long-Term Perspectives of International Bioenergy Trade

In the coming decades, huge challenges in the global energy system are expected. Scenarios indicate that bioenergy will play a substantial role in this process. However, up to now there is very limited insight regarding the implication this may have on bioenergy trade in the long term. The objectives of this chapter are: (1) to assess how bioenergy trade is included in different energy sector models and (2) to discuss the implications and perspectives of bioenergy trade in different energy scenarios. We grouped scenarios from the models IMAGE/TIMER, POLES and GFPM according to their policy targets and increase of bioenergy use in “ambitious” and “moderate” bioenergy scenarios and compared results regarding bioenergy trade for solid and liquid biomass. Trade balances for various world regions vary significantly in the different models and scenarios. Nevertheless, a few robust trends and results can be derived up to the year 2050: Russia and former USSR countries could turn into strong biomass exporting countries. Moreover, Canada, South-America, Central and Rest-Africa as well as Oceania could cover another substantial part of the bioenergy supply. As importing countries, India, Western Europe and China might play a key role. The results show (1) the high relevance of the topic, (2) the high uncertainties, (3) the need to better integrate social, ecological, economic and logistical barriers and restrictions into the models and (4) the need to better understand the potential role of bioenergy trade for a sustainable, low-carbon future energy system.

Second-generation biofuels: impacts on bioheat production and forest products markets.

Purpose – Second-generation biofuel is regarded as a sustainable alternatives to fossil energy in transportation where electricity is not feasible. The main purpose of this study is to analyze how large-scale second-generation biofuel based on wood may affect the competitiveness of more mature bioenergy technologies such as bioheat through competition in the biomass market. The impacts on forest industries are also included. Design/methodology/approach – An economic model for the energy and forest sectors based on partial equilibrium modeling is used to quantify the impacts of four different locations of biofuel production in Norway. Findings – The results show that there are regional variations in biomass price effects depending on local raw material availability and costs of transport and import. Technologies allowing for a larger variety of wood biomass qualities will face lower biomass prices than technologies using only one species as raw material, causing less reduction in the production of bioheat ...

Impacts of combining partial and general equilibrium modelling in freight transport analyses ― a forest sector case study from Norway

Abstract The forest sector in Norway is very transport intensive, accounting for approximately 14% of total domestic freight transport traffic on Norwegian roads. This paper presents an analysis linking a general equilibrium freight transport modelling tool with a partial equilibrium model of the forest sector. The freight transport model predicts transport costs, modal split and transport patterns, and the results are treated as inputs to the forest sector model. The objective of the paper is to analyse the modelling effect of taking forest sector model effects back into the freight transport model and treated as new demand. Compared to a base scenario for the year 2020, we compare analyses with and without this new demand from the forest sector model back into the freight transport modelling tool.

Commodity-Scale Biomass Trade and Integration with Other Supply Chains

A global bioeconomy requires adequate logistical infrastructure to support trade of biomass feedstock and intermediates. An integration of biomass trade streams with existing supply chain infrastructure, originally constructed for other goods, presents an opportunity to efficiently enable such growth. This chapter examines to what extent existing logistical infrastructure can be used and/or shared with biomass trade streams via specific case studies. It identifies how biomass trade is already or could be integrated into existing supply chains handling infrastructure, and for what kind of biomass specifications a dedicated infrastructure is needed. It finds that the existing solids handling infrastructure is well suited to integrate biomass intermediates such as conventional or torrefied pellets. Liquids with a higher energy density than solids, for example, pyrolysis oil, could potentially realize many opportunities to leverage infrastructure designed for the petroleum industry, and may even enable leveraging home heating infrastructure, for example, in the US northeast, preventing costly modifications. However, high oxygen levels render pyrolysis oil corrosive, requiring investments in stainless steel or other more durable handling equipment. Biomethane injection into natural gas grids is already a common technology in most of Europe, but major hurdles remain, including high production costs, pipeline access, and the lack of quality standards.

Power market impacts of increased use of electricity in the heating sector

An electrification of the heating sector through increased use of electricity in district heating plants may add valuable flexibility to the future renewable energy system while at the same time improve integration of fluctuating renewable energy sources and reduce emissions. This study quantifies how the energy system and the electricity market may be affected by an increased electrification of the district heating sector. A comprehensive energy system model covering the power and heat sector is applied for the analysis of the 2030 energy system in Northern Europe. According to the model results the heat generation from electricity in district heating varies from 2 TWh/year to 75 TWh/year in the analyzed scenarios, representing 0.5% to 19% of annual electricity consumption in the region. The results show that the level of electricity taxes and grid rents are decisive factors for the use of electricity in district heating. Total wind power generation from existing and new installations range from 70 TWh/year to 90 TWh/year, depending on the magnitude of power to heat use in district heating. Sensitivity studies confirm that the biomass price are highly decisive to the use of power to heat in district heating, since new heat pumps mainly replaces wood-based biomass. As expected, carbon prices influence the share of wind power versus natural gas power, but the carbon price does not affect investment levels in power to heat significantly.