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Title:Biomass energy crop production and residential pellet consumption in the midwestern U.S.
Author(s):Freeh, Emily D.
Advisor(s):Khanna, Madhu
Department / Program:Agr & Consumer Economics
Discipline:Agricultural & Applied Econ
Degree Granting Institution:University of Illinois at Urbana-Champaign
pellet fuel
renewable fuel
corn stover
Biomass Crop Assistance Program (BCAP)
Abstract:Concerns about national energy security and climate change have recently increased interest in renewable bioenergy. Specifically, the market for perennial grasses and agricultural residue for combustion for heat and electricity in the form of biomass pellets is explored. We present a cost-benefit analysis of consuming pellets for residential home heating, using previously published data, that is applied to the Midwestern U.S., in order to find out if biomass pellet fuel is competitive with non-renewable fuel. We then compare the costs to the actual production and consumption cost data from the Dudley Smith Farm production in Illinois and show the effects of current and potential policies. Using the data from Dudley Smith we investigate the current production cost in Illinois and compare it to estimated production costs in the literature. Finally, we present the results of a survey of current members and non-members of a biomass feedstock production cooperative in Missouri. We show that the policies in place do substantially lower the cost of biomass pellets, making them competitive with natural gas, under our assumptions. Without the policies, natural gas is substantially less expensive than biomass pellets. Biomass fuel would be competitive without the policies only to consumers without access to natural gas, i.e. rural consumers. Carbon pricing has the effect of increasing the cost of non-renewable fuel at a much higher rate than non-renewable fuels, making biomass fuel increasingly competitive. Sensitivity analysis shows that substantial increases in production costs or decreases in yield will have noteworthy effects on the annual home heating cost. Our survey results show that almost half of the consumers switched from propane to biomass pellets, which allows us to propose that they did not have access to cheaper fuels such as natural gas and wood. Thus, biomass pellets may be more competitive in rural markets where choice is limited.
Issue Date:2011-01-21
Rights Information:Copyright 2010 Emily Freeh
Date Available in IDEALS:2011-01-21
Date Deposited:2010-12

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