Doctoral Dissertations

Date of Award

8-1997

Degree Type

Dissertation

Degree Name

Doctor of Philosophy

Major

Agricultural Economics

Major Professor

Burton C. English

Committee Members

Greg Pompelli, John Peters, Dan McLemore

Abstract

Renewable resources are a potentially important, but little developed, part of the national energy strategy in the United States. One type of renewable resource is bioenergy crops. Bioenergy crops are crops produced specifically for their energy content. Bioenergy crops have few emissions when burned. These crops also have potential to reduce soil erosion. Switchgrass is a bioenergy crop that can be produced and utilized in Tennessee. Currently, there is no market for switchgrass, and no commercial production.

This study examined the economic feasibility of switchgrass production and utilization for electric power production in Tennessee. Economic feasibility of switchgrass utilization as a feedstock for electric power generation is related to location of production area, electric facility location, production and transport costs, and harvesting method.

Break-even analysis was used to determine a production cost for switchgrass. A geographical information system, the Regional Integrated Biomass Assessment (RIBA) model, established a link between soil types, anticipated yields, political boundary data, natural boundary data, harvesting techniques, and costs of production of switchgrass as well as costs of production of other traditional crops. Five scenarios were developed to examine the economic feasibility of switchgrass utilization relative to coal as a fuel source for electric power generation in Tennessee. Three of these scenarios incorporated use of a subsidy to examine economic feasibility of using switchgrass as a feedstock to electric power production instead of coal. These three subsidies were based upon studies of abatement costs for sulfur dioxide and carbon dioxide emissions caused by burning coal. Another scenario incorporated use of the one and one-half cent per kilowatt hour rebate to electricity producers established by the 1992 National Energy Renewable Act. These scenarios analyzed two types of harvesting systems for three different size switchgrass electric generation plants.

Economic feasibility of switchgrass production and utilization as a feedstock for electric generation was examined at the state level, regional level and plant level. The state and plant levels showed considerable reductions in both production costs and transport costs of switchgrass by the utilization of the staggered harvest method instead of the base (traditional farming) method. The regional level analysis consisted of dividing Tennessee into three regions: east, middle, and west. The initial electric generation plant would be located in the lowest delivered cost region. East Tennessee. The West Tennessee Region has the highest delivered cost of three regions. A social cost analysis comparing the combined sulfur dioxide and carbon dioxide subsidy to the one and one-half cent per kilowatt hour rebate was performed. There was a greater gain to society in using the combined sulfur dioxide and carbon dioxide subsidy than by rebating electric producers the $0.015 per kwh subsidy for using switchgrass as a fuelsource in electric power plants.

Conclusions of this study are that switchgrass production, harvesting, and transport for end use in electric power generation is economically feasible in Tennessee if environmental impacts are included in the costs of competing fuels. The location of marginal land in East Tennessee allows the initial opportunity for switchgrass production in the state. However, for switchgrass usage in Tennessee to approach its full potential for producing large amounts of electric power, land in Middle and West Tennessee are needed for switchgrass production. Compared to traditional farming methods, the staggered harvest method provided an opportunity to greatly reduce costs and increase output of switchgrass.

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