Biomass in Alberta: opportunities for additional bioenergy capacity
January 16, 2014
Bioenergy is a key component of forest industry transformation. However, according to Roberts (2013)1 there are three leading impediments to bioenergy investment in North America: policy uncertainty, the low price of natural gas, and feedstock price risk. The lack of sufficient low-cost feedstock supply to challenge the price of natural gas is discouraging for investment; however, it motivates assessment of wood residuals associated with primary wood manufacturing (particularly sawmilling). After all, sawmilling residues are the lowest cost fibre since they have already been transported from the forest. Nonetheless, the supply of these residuals can be highly volatile as they are heavily dependent on economic conditions in the lumber sector.
To forecast the potential sawmilling residual biomass supply in Alberta, we ran several scenarios of lumber prices in our regional transportation model of the Alberta forest sector. The model divides Alberta into 8 regions and models the production of 10 final products. It is based on 2009 capacity data. The profit-maximizing objective function “sources” logs, transports them to primary production facilities, and then transfers co-products—for example pulp chips—to other facilities to model the way fibre flows through the sector.
Lumber price and surplus wood residuals
Not surprisingly, we find that as higher prices increase sawmill activity, larger volumes of sawmill residual biomass are produced. The results suggest the majority of surplus wood residuals will be concentrated in the Peace River and Rocky Mountain House regions, respectively. These regions are the two largest exporters of wood residuals and together transfer to Grande Prairie, Slake Lake, Whitecourt and Drayton Valley. The Whitecourt and Drayton Valley regions are always importing wood residuals to meet production regardless of the lumber price and do not generate a surplus of wood residuals. At a lumber price of $475/MBF there are over 320,000 bone dry metric tons (BDMT) of surplus wood residuals available in Alberta, which could generate 447,360 MWh of electricity. Alberta Energy estimates the average household in Alberta uses 7.2 MWh of electricity annually and therefore the fibre surplus for the entire province at a lumber price of $475/MBF has the potential to supply electricity to roughly 62,000 households annually.