Energy - Environment

Energy Biomass Competitiveness – Three Different Views on Biomass Price

Biomass plays an increasingly important role in both the EU and the Czech Republic energy strategies and is expected to play the decisive role in fulfilling EU 2030 goals in renewable energy sources (RES) in the Czech Republic. However, an overview article recently published in WIREs Energy and Environment argues a systemic approach to evaluation of biomass potential has been missing in the academic debate. There are basically three ways the biomass has been evaluated so far: 1) looking at the biomass production cycle, 2) comparing the economic viability (competitiveness) of energy biomass with conventional crops, and 3) analysing the market demand, where energy biomass substitutes fossil fuels. The paper combines the three approaches in one general model – a “decision making triangle”.

Figure: Scheme of the decision-making triangle

First,  the cost of growing energy biomass on arable land (cmin) and the price of biomass, which ensures the same net economic effect for the farmer as conventional crops (calt), are compared. The higher of these two values defines the bottom limit for price of energy biomass intentionally grown on agriculture land, i.e. the lowest price the farmers are ready to accept in the given economic setting (cbot_lim). This is then compared to the demand side – the price accepted by consumers, i.e. the price of energy biomass as a substitute for fossil fuels (csubs). If the price csubs is higher than cbot_lim, the planting of energy biomass is economically viable.

In the overview, a case study for the Czech Republic is presented. It has been shown that currently, for households, the cbot_lim is actually at least twice higher than the csubs. It means that unless changes in the system occur (e.g. new system of subsidies, changes in prices, changes in yields, etc.), it is not economically rational to use energy biomass in households. In case of large power plants, the energy biomass seems more viable.

 

Kindly contributed by Michaela Valentová.

 

 

 

 

 

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