Economic Aspects of Bioenergy Production from Perennial Grasses in Marginal Lands of South Europe
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Economic Aspects of Bioenergy Production from Perennial Grasses in Marginal Lands of South Europe Peter Soldatos 1
# Springer Science+Business Media New York 2015
Abstract The pressure for environmental protection and reduction of energy dependence combined with strong economic motivation for lowering fossil fuel consumption and energy prices has driven Europe and other countries toward the exploitation of biomass for energy. More recently, after a good number of very ambitious national programmes for the promotion of energy from dedicated crops, we are facing the problem of food shortages and food price pressures worldwide, due to changes in the use of land. This article examines the economics of cultivation of giant reed (Arundo donax L.), miscanthus (Miscanthus × giganteus) and switchgrass (Panicum virgatum L.), in marginal lands of South Europe, and investigates the conditions under which such cultivations would be justified on economic grounds. By using life cycle costing analysis (LCCA) and discounted cash flow (DCF) methodology, the annual equivalent costs estimated are expressing in the most comprehensive way lifetime costs. It has been found that under current economic and climatic conditions in South Europe, perennial grass production cost in marginal lands is significantly affected by the degree of Bland marginality^. We estimate an average yield loss of approximately 40 % due to land marginality. In northern regions of Mediterranean Europe with high precipitation levels, irrigation costs are lower and yields are higher. In the south, the cost of irrigation can be as high as 20 % of total cost. The cost of producing and delivering biomass to the market ranges between 60 and 80 €/dry tonne. Giant reed has been found to be the most cost-effective of the three crops, mainly because
* Peter Soldatos [email protected] 1
Agricultural University of Athens, Iera Odos 75, 118 55 Athens, Greece
of its relatively high yields in comparison to the other two crops. Considerable data variability, indicative of regional distinctiveness, does not allow definitive conclusions. Keywords Miscanthus . Giant reed . Switchgrass . Marginal land . Economic . Cost
Introduction Europe is in the process of gradually reducing the contribution fossil fuels in its energy balance, especially in power generation, by substituting fossil fuels with increasing quantities of biomass. Today, significant quantities of imported biomass are used, e.g. in the form of wood pellets from America, at prices higher than potential production cost within the EU, due to generous incentives of various environmental protection programmes and the need to maintain uninterrupted power supply without jeopardising compliance with EU directives. Regional distribution and the size of European forests cannot support the exponentially increasing EU needs for biomass, and this offers a chance for wider use of cellulosic energy crops, such as perennial grasses. Perennial grasses have an opportunity to gain market share in the European energy sector, in power g
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