Comparative cost evaluation of heating oil and small-scale wood chips produced from Euro-Mediterranean forests

Abstract

This work performs a cost evaluation of small-scale produced wood chips from forests in the Euro-Mediterranean region to be used for heating purposes. The study is focused on forests located in the Argençola municipality (Catalonia, northeastern Spain). The use of such easy-to-produce biofuel is appealing since it may be used as a valid substitute of heating oil to produce thermal energy in the same area where it is produced, thus minimizing transportation requirements and reducing dependence on the rising prices of heating oil. Additionally, it allows facing environmental and social concerns related to the current lack of management in the forests under analysis, which has led to an important increase in the biomass stock and wildfires risk. As wildfires in the Euro-Mediterranean region generate important impacts, an average economic cost of wildfires has been evaluated in this paper. The economic assessment of small-scale production and consumption of wood chips as proposed in this study has shown interesting economic benefits when compared with current heating oil prices. Results indicate that it is a realistic option since production costs range from 12.2 €/GJ to 18.5 €/GJ depending on the applied forestry practices, whereas current cost of heating oil is about 23.9 €/GJ. A sensitivity analysis has also been conducted to assess the impact of the data with higher uncertainty on the final results. It has been shown that the key factors that determine the viability of the proposed model are heating oil price, biomass stock growth rate, transportation requirements and applied forest management practices. Results presented prove that wood chips cost is quite independent of fossil fuel prices, thus higher fossil fuel prices greatly favors the use of wood chips when produced and consumed in the same area, thus minimizing transportation requirements. In addition, higher biomass growth rates than those considered in this work may reduce the final cost of small-scale produced wood chips.