Biofuels, Biomass and Alternative Crops

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Bio-fuels, Biomass and Alternative Crops

• Douglas Jackson
• Laurence Gould PartnershipFresh Start Meeting
  23rd November 2006

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Introduction

• Renewable Energies
• Biomass
• Bio-diesel
• Bio-ethanol
• Opportunities Procurement
• Alternative Crops

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Renewable Energies

• What is..
• Bio-diesel?
• Vegetable oil (OSR, palm, soya, waste oil,
  Jatropha) heated and reacted with an alcohol
  using an acid to produce a Methyl Ester diesel
  replacement
• Bio-ethanol?
• Petrol extender derived from fermentation and
  distillation of sugars from starch wheat,
  maize, sugar beet etc.

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Renewable Energies (cont)

• What is..
• Bio-butanol?
• Petrol extender derived from fermentation and
  distillation of sugars from starch wheat,
  maize, sugar beet etc. different process to
  ethanol, higher inclusion rates
• Biomass?
• Green energy source usually woody type plants
  with relatively high density used to power CHP
  units or heat units

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Biomass

• Grown on marginal land (not ideal for cereal
  production)
• Establishment Costs
• SRC - 600 per acre
• Miscanthus - 715 per acre
• Establishment Grants (372 - 405 per acre)
• Write off over 15 years

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Gross Margins
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Biomass Options

• Establishment grants require local project and
  contracts
• Heat and power farm buildings, offices, houses
• Group to heat local schools, offices
• Sell to public bodies to heat public buildings

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Biomass Value as a Fuel

• 10 ODT Miscanthus (2 acres)
• 6 tonnes coal
• 4,000 litres oil (kerosine)
• 2kg miscanthus per litre of oil used
• Miscanthus about 1.0p per kWh cheaper than oil or
  gas
• If pellet SRC equivalent cost

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Biomass Value as a Fuel (Cont)

• Boiler costs
• Domestic circa 6,000 (11 15 kW)
• Office/ large buildings up to 250k
• One off 1,500 grants available for boiler
  instillations
• Lower running costs versus capital expense

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Bio-fuels

• Farm Scale needs synergy within business
  (bio-diesel only)
• Medium scale work with local farmers or grain
  co-op (bio-diesel/ bio-ethanol(?))
• Large scale external investment (bio-diesel/
  bio-ethanol/bio-butanol)

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Bio-diesel (Farm Scale)

• Less than 1 million litres per annum
• Use within business or other local businesses
  scale not appropriate to sell to distributor
• Investment circa 150k
• Return 1.0 pence per litre
• Circa 5 return
• (watch the fuel price!)

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Bio-diesel (Medium Scale)

• Up to 5 million litres per annum
• Need fixed customer and feedstock supply
• Investment circa 1.6 million
• Return 2.3 pence per litre
• Circa 7 return
• (watch the fuel price!)

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Bio-diesel (Large Scale)

• Over 5 million litres per annum
• External source of finance
• Major multinationals investing
• Investment over 10 million
• Problems with quality and feedstock especially
  when using imported oils

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Bio-ethanol Bio-butanol

• Medium scale - significant investment and
  relatively low returns
• Large scale - better returns
• Investment in excess of 10 million
• Output over 5 million litres per annum
• For farmers investment and supply

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Drivers

• We must fossil fuels are running out!
• Government/ EU pressure
• Add value or invest for farmers

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Opportunities

• Grow your own fuel vehicle, office or home
• Offer fuel security to SE farmers considered
  important
• Generate further margins on your crop
• Save the World!?
• Long term sustainability

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Opportunities

• Sell to public bodies
• As a group sell to fuel companies
• Serve communities
• Be proactive!

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Alternative Crops

• Freedom of SPS allows more crops to be considered
• Changing climate will allow more crops to be
  considered
• Some examples grain maize, hemp, soya, turf,
  vines, sunflowers

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Alternative Crops (Cont)

• Key to success for alternative crops is establish
  your market before production (you should with
  mainstream crops!)
• If you have feed wheat to sell you will find a
  buyerbut you dont know what price
• Alternative crops you may not be able to sell

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Alternative Crops (Cont)

• Grain Maize
• Light soils ideal as late harvest
• Spring crop overwintered stubbles
• Premium (pet food markets available)
• Price likely to improve in future as US uses
  maize for bio-ethanol
• Gross margin - 230 per ha

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Alternative Crops (Cont)

• Hemp
• Licence needed from Home Office
• Grown for fibres
• Harvest with disk mower, rot for several weeks
  then bale
• Gross margin - 215 per ha

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Alternative Crops (Cont)

• Soya
• Variable yields, climate not ideal
• Good protein source
• Harvest in autumn potential problems
• Must achieve over 2.0 tonnes per ha
• Gross margin - 100 per ha

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Alternative Crops (Cont)

• Turf
• Specialist equipment needed/ labour required
• Good quality pasture required
• Must move turf quick after cutting
• Gross margin up to 3,000 per ha or rent at 700
  per ha or sell to harvest at 1,000 per ha

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Alternative Crops (Cont)

• Vines
• Growing market
• Best margins from direct sales need to create a
  brand
• Wine making is a skill
• Margins can be over 3,000 per ha
• Yields and quality highly variable

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Alternative Crops (Cont)

• Sunflowers
• Small area in UK
• Potential human consumption markets
• Climate may cause problems hot summer required
• Low spray use environmental benefits
• Gross margin - 130 per ha

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• Douglas Jackson
• Laurence Gould Partnership Ltd
• 28 Church Road
• Burgess Hill
• West Sussex
• RH15 9AE
• douglas_at_laurencegould.com
• 01444 232822