Bioenergy analysts Heather Youngs and Caroline Taylor, who work at the Energy
Bioscience Institute, University of California, Berkeley, write that the Farms of the Future will include a role for energy crops. They discuss the development of production networks that will need to be developed and and also talk about the technical barriers of biomass production that could threaten the establishment of the supply networks.
It’s difficult to reflect on the farm of the future without including a role for energy crops. Recent policy shifts toward renewable energy are opening up new opportunities for farmers to diversify their crops and bring idle land back into production. As a result, farm practices will have an enormous impact on the economic viability and commercial development of next-generation bioenergy.
The development of new bioenergy feedstocks, whether dedicated crops or harvest residues, requires a concomitant development of production networks and market demand. In the bioenergy sector, two main organizational structures link the biomass supply to the energy producer: vertical integration (which occurs when the bioenergy producer supplies the feedstock in-house) and procurement systems (in which feedstocks are supplied from biomass producers to bioenergy producers by means of spot markets or contracts). The relative balance of these two strategies reflects their technical difficulties, perceived risks, and marginal economies.
Forward vertical integration is by far the most common strategy in bioelectricity production. When the technical expertise required for competitive biomass production is a barrier but the conversion technology is well established, biomass producers may move into energy production (for example, electricity production by forest products companies, addition of ethanol refining to sugar mills, and installation of anaerobic digesters at dairy farms to produce biogas). This internalizes the cost savings but also confines the supply risk entirely to the energy producer.
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