Regional economic impacts of biomass district heating in rural New York

Abstract

Although the economic benefits of biomass heating in rural regions have been widely asserted, few studies have conducted a thorough economic impact analysis within the United States. This study proposes biomass district heating (BDH) as a means to stimulate the rural economy of the Tug Hill region of New York State by establishing a local industry and providing lower cost heat compared to the local alternative, #2 fuel oil, and examines the associated economic impacts. Since there are no BDH networks endogenous to the region, an expenditure pattern approach to input–output analysis is employed. The $11.4 million spent annually over the 20 year project payment period on the construction, biomass procurement, and production of heat with BDH would generate $18.7 million in local economic activity and create 143 jobs throughout the three county model region; a significant impact if concentrated around the rural study villages. These impacts are comparable, but less than, those modeled by other studies in countries with more established BDH networks. However, the precision of the impacts generated by the model are tempered by the significant discrepancy between the study region and the three county model region which included several larger urban areas. Ultimately, the limitations associated with the model scale and the absence of established expenditure patterns inhibit major conclusions in regards to the discreet impacts of BDH to the study villages, although a significant portion of the annual impacts estimated can be expected to occur in the villages given the location of the BDH networks.