Ten years ago, I was told the world had too much wood and prices were inexorably heading south. Now every man and his dog wants wood, especially the renewable energy sector.
In the UK, a recent rash of proposals for electricity-from-wood plants estimate demand at 30-40 million tonnes a year. UK wood production hovers around 10 million tonnes.
ConFor, the UK Forest Products Association and Wood Panel Industries Federation, have funded a wood supply and demand study, undertaken by John Clegg Consulting. This will show that even if only 10% of the potential demand from these generators were focused on the UK, it would have a major impact on the existing wood-using sector.
And given growing demand globally for energy wood (the US government alone has allocated over US$500m in 2010 to subsidise biomass collection), how secure are imports?
Most major biomass investments want 7-10 year supply contracts to underpin initial investment. However, the lifetime of any plant will be longer, potentially leaving hungry businesses scratching for supply.
To assess the impact, we must understand energy companies’ ‘ability to pay’ for wood: are they able to outbid existing wood users?
ConFor is commissioning more work, with Scottish Enterprise and Forestry Commission Scotland, to understand what the Renewables Obligation Order and new mechanisms (Feed-in Tariffs and Renewable Heat Incentive) could mean for wood energy prices.
There is wood that can be usefully used for energy generation. There is also, however, a lack of understanding in public policy circles of the potential impact of renewable incentives on the forestry and wood sector. If the challenge is to make the transition to a low-carbon economy, then the greatest jobs and carbon benefits are in solid wood, with other available material going to produce heat on a local scale.
In November, I challenged ministers to put the same value on solid wood for carbon that they do on planting forests and on burning wood. I was asked for, and gave, more information, but have received no reply. With a general election looming, it is a question that any new government needs to answer.
