Biomass - Energy Toolbox

Growing short rotation coppice for power or heat generation raises a number of financial and related issues for farmers. These include production and crop husbandry needs, markets and marketing, and likely costs and returns. From a national or government perspective, the economic costs and benefits to the economy as a whole and well as the social implications, including land-use, also need to be considered. An assessment of these factors is made, drawing on information and experiences largely from the UK and Sri Lanka, in the paper prepared by Claire Coote of NRI.
View Paper [PDF 67Kb]

In Sri Lanka, growing of short rotation coppice crops such as Gliricidia and Calliandra have been identified as a potentially viable activity for those farms and plantations with under-utilised land which is marginal for food crops. It also has particular relevance for those areas where rainfall is limiting and there are large areas of scrub or degraded land. In such areas, tree growth may be adequate for good returns, though obviously maximum growth rates are associated with the higher rainfall sites of western and central Sri Lanka.

Cost and returns of SRC

As part of the key outputs of the project we have looked at the costs and potential returns for smallholder and farmers growing short-rotation coppice (SRC). These are provided in a series of excel models which have considered a range of key parameters such as price per kilogram, wood yields, interest rates which affect net revenues. A summary of the main results are provided in a paper which makes comparisons with the growing of SRC in Sri Lanka versus the income to be expected from commonly grown agricultural crops.
View Paper [PDF 59Kb]

Socio-economic evaluation of SRC

The decision on whether a farmer will want to be actively involved in fuelwood production will also be determined from an assessment of the expected production levels, the distance to the power unit and the certainty of the market. For an entrepreneur establishing a power unit and dependent on material supplied by outgrowers there will be socio-economic issues that need to be considered in relation to the long-term interest and commitment of the farming community. In Sri Lanka, a 1 MW power unit has been established within the Walapane Division in the centre of the country. The unit provides power for the national grid and is fired from locally collected material from SRC (Gliricidia). As part of the project, an investigation was made of the socio-economic features of the development to identify lessons learnt in establishing a small grid-connected power unit. It was revealed that some of the assumptions made during the Feasibility studies were not entirely correct and that the price being paid for fuelwood was considered to be too low for many of the farmers. An analysis of the perceptions of the farmers in the area is presented in this paper, written by Dr Hemanthi Ranasinghe of the University of Sri Jayewardenepura.

A key finding of this, and earlier work (Wickramesinghe, 2005), is that there needs to be active involvement of, and transparent operations with, the communities that are invited to supply wood for a power plant. There must be a clear explanation of what is expected from the farmers in terms of how the wood is to be supplied; moisture levels, regularity of supply and the likely costs and benefits, based on worst as well as best-case scenarios regarding yields. The role of agents, and the costs and benefits that they occur, also needs to be spelt out to all participants.
View Case Study [PDF 434Kb]

The economics of dendropower is considered in further detail in the Technical Section (page3).