Business Development within the Renewable Energy Sources: British Columbia and Woody Biomass
British Columbia is a major producer of renewable woody biomass. This biomass is produced for domestic consumption and export. British Columbia is now a key biomass pallet exporter to both the US and the EU, with business opportunities for biomass development and export increasing.
As per the BC Energy Plan, British Columbia should achieve Provincial energy self-sufficiency by 2016 and obtain a clean and renewable energy standard which exceeds 90%.
Supporting this plan, the 2008 BC Bioenergy Strategy, identifies several action items for the Province. These items include $25 million in funding for a bioenergy network, $10 million to support development of Provincial biodiesel production and the establishment of a comprehensive biomass inventory so as to identify and create waste to energy business opportunities.
What is Woody Biomass?
Woody biomass products are the trees, woody parts, needles and limbs that constitute the by-products of forest management. Such products are wide ranging and are usually comparatively easy to obtain. They can be harvested and sold for the production of bio-energy.
Woody Biomass bio-energy is usually produced using a Biomass Boiler. Biomass boilers work by burning logs, wood pellets or woodchips in order to generate heat energy. Recently, they have improved in efficiency due to significant technological advancement. They are comparatively easy to maintain, and are automatic, modulating, self-lighting and self-cleaning. Most can also extract ash, which can be re-laid or sold as fertiliser.
Opportunities for Business Growth within the Woody Biomass Industries
There are three key business investment areas within the BC Biomass industry; investment in harvesting and energy generation technologies, investment in ‘manpower’ businesses, and investment in land and associated properties within biomass production areas.
Biomass technologies
Biomass technologies include equipment used to harvest biomass products and systems used for the conversion of biomass into other energy products, such as biofuel. For the harvesting of biomass, bulk feedstock supply handling systems are often needed. Such handling systems collect and transport raw biomass to storage properties or processing plants. Bulk handling systems are supported by pre-processing equipment. This equipment grinds raw biomass to reduce its size for efficient energy conversion.
Once biomass is harvested and prepared for energy conversion, a biomass boiler system is then needed to convert the prepared products into biofuel. Canada has seen extensive growth within this business sector. Key product developments have focused on gasification, where biomass products are gasified within an oxygen starved vessel in order to make synthetic gas. This gas can then be transported using a pipeline or can be oxygenized in an additional vessel. It can then be used as heat or converted into steam through a heat exchanger.
‘Man Power’ businesses
The expansion of woody biomass as a fuel product has precipitated increased demand for skilled and unskilled labourers. Thus, particularly due to the seasonal nature of harvesting, the need for firms supplying labourers has increased. Companies that can supply labourers trained in woody biomass harvesting and in the operation of woody biomass machinery are particularly appealing to biomass producers.
Thus, firms which focus their operational strategies, together with targeted marketing, meticulous selection processes and developed training programs, towards biomass vocations, may be able to expand in line with increased demand.
Land and Property for Biomass
Conducting an accurate assessment of the extent to which agricultural, arboricultural, development or scrub land could generate income through the harvesting of surplus or subsidiary woody biomass, is now a consideration when determining both the capital value of particular land and the value of that land as an income source.
Such assessments should include the size of the land and the existence of any buildings (and their condition) which could be used for housing either bulk or condensed biomass and any associated equipment. Consideration should also be given to the likely extent of biomass product income generation when set against labour and overhead costs used within the biomass harvesting, conversion and transportation processes.
Further, consideration should be given to any funding, preferential loan or tax credits which could be derived from biomass harvesting. Potentially, such funding could assist in the financing of the developer’s primary business venture.
Financing Biomass Businesses
The main sources of financing for commercial biomass projects are banks. As securing bank loans for the development of new technologies can be difficult and is often restricted to 50% investment, such funding is likely to be supplemented with either a grant or a private investor outlay. Bank loans usually carry fairly low interest rates; however, most banks operate risk adverse lending policies. Thus, loans must often be secured against purchased land or equipment and loan or mortgage payment protection is often recommended.
Additionally, biomass business start-ups may be eligible for funding through various commercial and public sector initiatives. For example, investment bodies such as Creststreet, have investors who wish to generate income from renewable energy sources, and may contribute to start-up funding. Further, renewable energy development companies or technology investors may provide funding opportunities.
Certain government grants and Farm Credit Canada loans are also available. Examples include the Energy Loan, the Green Infrastructure fund, the Gas Tax Fund and the Infrastructure Stimulus Fund.