Potential supply and cost of biomass from energy crops in the TVA region

Abstract

The economic and supply structures of energy crop markets have not been established. Establishing the likely price and supply of energy crop biomass in a region is a complex task because biomass is not an established commodity as are oil, natural gas, and coal. In this study, the cost and supply of short-rotation woody crop (SRWC) and switchgrass biomass for the Tennessee Valley Authority (TVA) region-a 276-county area that includes portions of 11 states in the southeastern United States - are projected. Projected prices and quantities of biomass are assumed to be a function of the amount and quality of crop and pasture land available in a region, expected energy crop yields and production costs on differing soils and land types, and the profit that could be obtained from current conventional crop production on these same lands. Results include the supply curves of SRWC and switchgrass biomass that are projected to be available from the entire region, the amount and location of crop and pasture land that would be used, and the conventional agricultural crops that would be displaced as a function of energy crop production. Finally, the results of sensitivity analysis on the projected cost and supply of energymore » crop biomass are shown. In particular, the separate impacts of varying energy crop production costs and yields, and interest rates are examined.« less