Economic consequences of increased bioenergy demand
2014
Johnston, Craig M. T. | Van Kooten, G Cornelis
Although wind, hydro and solar are the most discussed sources of renewable energy, countries will need to rely much more on biomass if they are to meet renewable energy targets. In this study, a global forest trade model is used to examine the global effects of expanded demand for wood pellets fired with coal in power plants. Positive mathematical programming is used to calibrate the model to 2011 bilateral trade flows. To assess the impact of increased demand for wood pellets on global forest products, we consider a scenario where demand for wood pellets doubles. Findings indicate that production of lumber and plywood is likely to increase in most of the 20 model regions, but outputs of fibreboard, particleboard and pulp will decline as these products must compete with wood pellets for residual fibre. Ultimately, policies promoting aggressive renewable energy targets cause wood pellet prices to more than double in our scenarios, which could increase the cost of generating electricity to such an extent that, in some regions, electricity producers will continue to use fossil fuels as their primary fuel, while some others might find it worthwhile to rely more on nuclear energy for base load power.
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