Community economic profile : Buncombe and Orange County examples

              NC Woody Biomass
“Nature’s renewable energy!”
http://www.ces.ncsu.edu/fore
stry/biomass.html
Extension Forestry
Campus Box 8008
NC State University
Raleigh, NC 27695-8008
Table 1. Population Data for Selected NC Counties
County
2000
Pop.
2006
Pop.
Population
Growth
(2000 – 2006)
Buncombe 206,330 222,174 7.7%
Orange 118,227 120,100 1.6%
Buncombe County is in the
western region of North Carolina
in the French Broad River valley,
nestled between the Blue Ridge
and the Smoky Mountains.
Buncombe County prides itself
on living in harmony with nature
and acting locally to positively
impact the global environment.
Asheville, the county seat, is a
growing city with large arts and
retirement communities and
several colleges and universities.
Another heavily forested region,
Orange County, is located in the
rolling hills of the Piedmont
region in the north central part of
the state. Although the county is
located in the Raleigh-Durham
metropolitan area, only 10
percent of the land base has been
developed. Hillsborough, the
county seat, is a small
town located on the
Eno River, and the
city of Chapel Hill is
home to the
University of North
Carolina.
Buncombe and Orange Counties
are 62% and 59% forested,
respectively, and the larger
communities, such as Asheville,
Carrboro, Chapel Hill, and
Weaverville are nationally
recognized as Tree City USA
communities. According to the U.
S. Census Bureau (2007), both
Buncombe and Orange counties
have grown in population over the
past six years. Buncombe County’s
population has grown by 7.7 %,
while Orange County has grown by
1.6 % (Table 1). Coal, natural gas,
and fuel oil are currently the major
sources of energy in both counties.
In fact, Progress Energy is
constructing a new facility in
Buncombe County that will supply
130 megawatts (MW) of energy
using an ultra low-sulfur fuel oil.
Community Economic Profile:
Buncombe and Orange County Examples
In the southern United States, communities with increasing populations
and nearby forests may be able to consider using woody biomass to
generate energy. A variety of other factors must also be considered,
such as the price of existing energy sources, competing markets for
wood, community acceptance, and the economic availability of wood
resources. Many counties in North Carolina have forests in close
proximity to growing populations. To gain a better understanding of
the range of possibilities for economic availability and the local
economic impacts of using wood for energy, Buncombe and Orange
counties were selected for analysis in this community economic profile.
This document is for forestry professionals and county planners to
understand the Community Economic Profile and Analysis Process.
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Woody biomass from urban wood waste,
logging residues, and forest thinnings, for
example, can be used to generate energy.
Using wood to generate electricity provides
potential benefits such as reduced
greenhouse gas emissions, healthier forests,
and local jobs and other economic impacts.
To estimate the amount of wood that could
be available in a community, we include
three sources: urban wood waste, logging
residues, and pulpwood. While other woody
biomass resources exist and could be added
to the resource assessments, we include only
these resources, for which cost and supply
data are available. Urban wood waste is
generated from tree and yard trimmings, the
commercial tree care industry, road and
utility corridor clearings, and green space
maintenance. Logging residue is composed
of the leftovers from forest harvesting, such
as tree tops and limbs, and poorly formed
trees. Pulpwood refers to small diameter
trees (3.6 to 6.5 inches diameter at breast
height) that are harvested for manufacturing
paper, purified cellulose products (including
absorbents, filters, rayon, and acetate), and
oleoresin products (including pine oils,
fragrances, cosmetics, and thinners).
This profile sheet excludes secondary woody
waste from sawmills and furniture makers,
which is available but may already be used
within the industry to produce energy.
Economic factors, including fuel costs and
the creation of local jobs, are major
determinants of the feasibility of bioenergy
projects. Assessing the economic
availability of biomass requires learning
about the delivered cost of wood, the
quantity of available wood, and its
geographic distribution. This information is
then used to create biomass resource supply
curves, which express price per unit of
biomass at various levels of consumption.
The following summary assesses the
economic availability of wood resources for
Buncombe and Orange counties in North
Carolina.
Cost Calculations
The delivered cost of woody biomass to a
facility is the sum of the amount paid to buy
the wood from the original owner
(procurement), the harvest cost, and the
transportation cost. Although rail
transportation is common on facilities
located on major rail lines, woody biomass
is typically transported by truck (and that is
the convention used in this analysis). The
cost of transportation depends on the time it
takes a truck to travel from the harvest site
to the facility. A simpler analysis could
calculate transportation cost as a function of
distance rather than transportation time.
However, transportation costs per mile tend
to decrease as road infrastructure improves.
Haul times to the central delivery point in
each county are calculated using a software
program called ArcGIS Network Analyst
Extension (Figure 1).
Assuming that haulers drive the speed limit
on the quickest route available to them, we
calculate total transportation times for the
forested areas around the delivery point, and
then increase haul times (and thus costs) by
25% to account for delays, such as traffic
and stops. These haul-time procurement
zones delineate potential “woodsheds” or
areas that can provide wood for a specific
community or biomass user. If demand is
established in more than one area in
proximity, woodsheds can overlap, causing
competing demand for biomass.
The total delivered cost is derived from the
sum of the procurement, harvest, and
transportation costs for urban wood waste,
logging residues, and pulpwood. This is
calculated at 15-minute increments up to one
hour from each delivery point. Delivered
costs allow us to see the progression of the
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Figure 1. Wood harvested within each colored band can be transported to the center of
each county in 15-minute increments.
Moisture content refers to the amount of moisture remaining in wood and is an important consideration in the
quality of biomass resources. Moisture content is 0% in oven-dried biomass, about 20% for air-dried biomass, and
about 50% for fresh or “green” biomass. As the moisture content of wood increases, the energy content per unit
mass of wood will decreases. Thus, wood with low moisture content will combust more efficiently than wood with
high moisture content. Moisture content referred to in this document is reported on a green-weight basis.
most- to least-expensive woody biomass
resources. For example, if urban waste wood
were delivered within the one-hour limit, the
total delivered cost would be $19.46 per dry
ton, or $1.25 per million British thermal
units (MMBtu). However, if pulpwood were
delivered from the same distance, the
delivered cost would increase to $49.14 per
dry ton, or $3.04 per MMBtu, primarily
because pulpwood is more expensive than
urban wood waste.
Physical Availability
In addition to the delivered cost of wood,
knowing how much of each type of woody
biomass is available is necessary to
construct supply curves. Annually harvested
pulpwood and annually available urban
wood waste and logging residues within the
two NC counties are shown in Table 2.
For urban wood waste, it is assumed that
0.203 green tons (40% moisture content) of
urban wood waste is generated per person
per year (Wiltsee 1998). Urban wood waste
includes municipal solid waste wood from
yard
waste and tree trimming but excludes
industrial wood (e.g., cabinet and pallet
production) and construction and demolition
debris. This average yield was multiplied by
county population estimates and reduced by
40% to estimate total annual county yield of
urban wood waste. For example, in
Buncombe County, this results in 26,700
green tons of urban wood waste per year.
The amount of logging residue and
pulpwood for all counties in North Carolina
was obtained from the USDA Forest Service
(2003) Timber Product Output Reports.
This database provides forest inventory and
harvest information, including annual yields
of forest residues and pulpwood. We
reduced the figure for logging residues by
30% to exclude stumps. For example, in
Orange County, there are 22,700 green tons
(37% moisture) of logging residues
available annually from existing forestry
operations. There are also 6,400 green tons
(50% moisture) of pulpwood harvested
annually.
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Table 2. Three Sources of Available Wood (values in green tons)
County
Available
urban
wood waste
Available
logging
residues
Harvested
pulpwood
Buncombe 26,700 20,100 900
Orange 14,400 22,700 6,400
Table 3. Delivered Cost of Available Wood
Trillion Btu available per year
within a one-hour haul radius
Delivered cost
($/MMBtu)
Resource/Haul time category
(in minutes) Buncombe County Orange County
$0.65 Urban wood: 0-15 0.04 0.04
$0.85 Urban wood: 15-30 0.13 0.27
$1.05 Urban wood: 30-45 0.15 0.46
$1.25 Urban wood: 45-60 0.17 0.67
$2.03 Logging residues: 0-15 0.03 0.07
$2.21 Logging residues: 15-30 0.15 0.38
$2.39 Logging residues: 30-45 0.48 0.79
$2.56 Pulpwood: 0-15 0.00 0.02
$2.57 Logging residues: 45-60 0.83 1.17
$2.72 Pulpwood: 15-30 0.07 0.18
$2.88 Pulpwood: 30-45 0.58 0.50
$3.04 Pulpwood: 45-60 1.05 0.82
Because the
pulpwood
harvest is
currently used
to produce pulp
and paper
products, not all
of this resource
is economically available for bioenergy.
However, additional biomass is available
from forest thinning, particularly those
conducted for ecosystem restoration, which
is not included in this assessment (Condon
and Putz 2007).
Supply Curve Construction
Given information regarding cost, quantity,
and distribution of all three types of woody
biomass, supply curves can be generated for
Buncombe and Orange counties.
Figure 2 shows the price of wood at
different quantities needed. The y-axis
represents price per MMBtu of energy and
the x-axis represents the total amount of
wood available in 15-minute increments.
Several scales are provided to translate the
quantity of wood into tons, energy content,
and houses electrified. Biomass sources
include urban wood waste, logging residues,
and pulpwood within a one-hour haul radius
of both county centers.
Supply
Analysis
Results
Energy
resources
and costs for
each
resource-haul time category for the two
counties are shown in Table 3 (resources are
ranked from cheapest to most expensive
based on delivered cost of energy). These
values were used to construct the supply
curves shown in Figure 2. The supply curves
suggest that 2.0 and 3.9 trillion Btu, or 17
and 33 MW of electricity, which is enough
to power 6,800 and 13,300 households
(Bellemar 2003), are available for less than
$2.60 per MMBtu in the Buncombe and
Orange County woodsheds, respectively.
Energy at this cost is competitive with
current costs of coal.
Within a one-hour haul radius, up to 0.5 and
1.4 trillion Btu can be provided from urban
wood waste alone in Buncombe and Orange
County woodsheds, respectively. With the
addition of logging residues, 2.0 and 3.9
trillion Btu can be produced in the
Buncombe and Orange County woodsheds,
respectively. Other types of wood may be
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Figure 2. Supply curves for woody biomass indicate the cost and quantity of wood
at 15-minute hauling intervals.
available from thinnings to improve forest
health, although this resource was not
quantified for this analysis. As the cost of oil
increases, all price estimates increase (with
petroleum inputs for harvesting and
transportation), but so do the costs of coal
and natural gas. In other words, as fossil
fuels become more expensive, the delivered
cost of wood will increase but will become
increasingly competitive with nonrenewable
fuels.
Economic Impact Analysis
The potential economic impacts of
developing a wood-fueled power plant are
an important consideration for both public
and private interests in a community. In this
economic analysis, two sizes of power plant
were considered: 20 or 40 MW. The
construction of the plant would be a one-time
impact event that is assumed to occur
within a year, while the impacts of plant
operations continue annually over the life of
the plant, for 20 years or more. Wood fuel
costs were calculated from the regional
supply curves discussed previously in this
report. Economic impacts were estimated
using IMPLAN software and databases for
each county. These estimates included not
only the direct impacts of plant construction
and operation but also the indirect impacts
from local purchases and local spending by
employee households. Economic impacts
were evaluated for Buncombe and Orange
counties in North Carolina. Fuel typically
represented the largest operating cost for a
wood-fired power plant. Fuel costs averaged
$3.3 and $8.4 million annually for the 20 or
40 MW plants, respectively, however, costs
ranged from $7.4 to $9.4 million for the 40
MW plant, due to differences in availability
of forest and wood waste resources, as well
as transportation infrastructure in these
counties (Table 4). Fuel costs were lower in
Orange County than in Buncombe County.
The economic impacts of plant construction
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Table 4. Economic Impacts of 20 and 40 MW Power Plants
Annual Operations Impacts (first
year) Plant Construction Impact
North
Carolina
County
Wood
Fuel
Cost
($Million)
Output
($Millions)
Employment
(Jobs)
Value
Added
($Millions)
Output
($Millions)
Employment
(Jobs)
Value
Added
($millions)
20 MW
Buncombe 3.74 12.84 242 7.59 7.89 74 3.90
Orange 2.88 10.81 177 6.91 45.27 379 25.95
Average 3.31 11.82 210 7.25 26.58 227 14.92
40 MW
Buncombe 9.37 26.65 546 15.77 10.72 98 5.06
Orange 7.35 22.08 393 14.07 78.73 653 44.88
Average 8.37 24.36 470 14.92 44.73 376 24.97
and operations varied widely between these
counties due to differences in the specific
makeup of the local economy. The total
annual operating impacts (first year) for a 20
MW plant ranged from $10.8 to $12.8
million in output (revenue), 177 to 242 jobs,
and $6.9 to $7.6 million in value added
(income). Total operating impacts for a 40
MW plant ranged from $22.1 to $26.7
million in output, 393 to 546 jobs, and $14.1
to $15.8 million in value added. The first
year impacts for plant operations are
representative of the ongoing annual
impacts; however, future impacts could
change due to prices of inputs such as fuel,
unexpected maintenance activities, and
general economic inflation.
Total construction costs were valued at
$48.7 million for the 20 MW plant and
$86.8 million for the 40 MW plant,
including land, site work, construction, plant
equipment, and engineering fees. Local
construction impacts differed dramatically
for these two counties. Construction impacts
for a 20 MW plant ranged from $7.9 to
$45.3 million in output, 74 to 379 jobs, and
$3.9 to $26.0 million in value added.
Construction impacts for the 40 MW plant
ranged from $10.7 to $78.7 million in
output, 98 to 653 jobs, and $5.1 to $44.9
million in value added. The significantly
higher construction impacts in Orange
County reflect the presence of manu-facturing
industries for boilers and turbines,
key components for power plants. This
results in greater impacts as more money
would be retained in the local economy.
Prediction of the distribution of economic
impacts across various sectors of the local
economy is possible. More than 60% of all
jobs would occur in the agriculture and
forestry sector, which supplies wood fuel to
these facilities. There would also be
significant employment impacts in the
sectors for professional services, retail trade,
and government sectors, reflecting the
indirect effects on the local economy
associated with purchased supplies and
employee household spending.
Conclusions
Economic concerns are important to
discussions of using wood for energy in the
South. For many communities, the
conversation begins with the recognition
that there is enough wood at an affordable
cost. Our supply analysis suggests that,
indeed, enough wood at a reasonable cost is
available in Buncombe and Orange counties
to make a continued conversation possible.
2.0 and 3.9 trillion Btu (i.e., 17 and 33 MW
or energy to power 6,800 and 13,300 homes
annually) of woody biomass are available at
less than $2.60 per MMBtu in Buncombe
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and Orange counties, respectively. These
general estimates could be improved with
more site-specific analysis and information.
Additional assessments of local conditions,
population density, distribution of wood,
competition from pulp mills, restoration
activities, and other factors would improve
the accuracy of these biomass resource
assessments. The following caveats should
be considered when interpreting the results
presented in this profile:
• The supply considered in this profile
includes only urban wood waste, logging
residues, and pulpwood. It excludes stumps
and waste from wood industries.
• Because only county-level data were
available, homogeneous distribution of
resources within counties is assumed.
Resource distribution within counties and
location of bioenergy generating facilities
will influence the actual economic
availability of woody biomass suitable for
energy generation. More detailed local
analysis might consider the distribution of
biomass resources within counties,
especially for site selection of bioenergy
facilities.
• The inclusion of other resources such as
mill wastes or thinnings from forest
management and habitat restoration would
increase available resources.
• This analysis is not intended to be a
definitive resource assessment but is rather
meant to provide a starting point for
discussions about the feasibility of using
wood for energy. Resources can be excluded
or added as more information becomes
available, and prices can be modified to
reflect local conditions.
• A rise in the price of petroleum would
increase the cost of the resources shown here,
as well as costs of conventional energy
sources like coal.
• Some assumptions made in this analysis
are subject to change. For example, large-scale
bioenergy development in the area
could increase competing demand for wood
resources.
• Rail transportation, which could
substantially reduce transportation costs and
increase the procurement area for biomass
resources, was not considered in this
analysis.
• Construction and operation of wood-fueled
power plants may have significant local
economic impacts. These impacts vary
widely among selected counties, depending
upon the makeup of the local economy.
• Wood fuel represents one of the largest
expenditures for a power plant and gives rise
to large impacts in the local forestry and
forestry services sectors. Other sectors of the
local economy are also impacted through the
indirect effects associated with purchased
supplies and employee household spending.
• Economic impacts of a 40 MW power plant
are greater than for a 20 MW plant, although
not in proportion to the power output, due to
economies of scale. For more information
about using wood to produce energy, visit
http://www.interfacesouth.org/woodybiomass
and read other fact sheets, community
economic profiles, and case studies from this
program, or http://www.forestbioenergy.net/
to access a number of other resources.
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References
Bellemar, D. 2003. What Is a Megawatt?
http://www.utilipoint.com/issuealert/article.asp?id=1728 (accessed July 13, 2006).
Condon, B. and F. E. Putz. 2007. Countering the Broadleaf Invasion: Financial and Carbon
Consequences of Removing Hardwoods During Longleaf Pine Savanna Restoration.
Restoration Ecology 5:2. In press.
North Carolina Forestry Association. 2007. Forest products industry emerges as North Carolina’s
largest manufacturing industry. Press Release.
http://www.ncforestry.org/docs/Latest%20News/releases/releasesindex.htm (accessed April
9, 2007).
U.S. Census Bureau. 2007. http://www.census.gov/ (accessed March 29, 2007).
USDA Forest Service. 2006. Forest Inventory and Analysis Factsheet North Carolina 2002.
Asheville NC: USDA Forest Service, Southern Research Station. http://srsfi
a2.fs.fed.us/states/nc/NCFACT%7E1.PDF (accessed April 9, 2007).
USDA Forest Service. 2003. Forest Inventory and Analysis. Timber Product Output (TPO)
Reports. Asheville, NC: USDA Forest Service, Southern Research Station. http://srsfi
a2.fs.fed.us/php/tpo2/tpo.php (accessed November 15, 2006).
Wiltsee, G. 1998.Urban wood waste resource assessment. National Renewable Energy
Laboratory, Golden, CO
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copies of this public document were printed at a cost of or per copy.
www.ces.ncsu.edu/forestry/biomass.html
Published by North Carolina Cooperative Extension
Authors
Matthew Langholtz, Postdoctoral Research Associate [1]
Douglas R. Carter, Associate Professor [1]
Alan W. Hodges, Associate-In [2]
Annie Oxarart, Outreach Research Associate [1]
Richard Schroeder, President [3]
[1] School of Forest Resources and Conservation, University of Florida, Gainesville FL
[2] Food and Resource Economics, University of Florida, Gainesville FL
[3] BioResource Management, Inc., Gainesville FL.
Prepared by
James Jeuck, Extension Associate, Forestry & Environmental Resources, NC State University
*Created in 1988, The North Carolina Solar Center is part of the N.C. State University College of Engineering
that works with state government and the renewable energy industry. It serves as a clearinghouse for
information, provides technical assistance, education, outreach, and training.
WB-0004/2008