THE EFFECT OF LOCATION AND FACILITY DEMAND ON THE MARGINAL COST OF DELIVERED WOOD CHIPS FROM ENERGY CROPS - A CASE-STUDY OF THE STATE OF TENNESSEE

Cost-supply curves for delivered wood chips from short rotation woody crops were calculated for 21 regularly spaced locations spanning the s tate of Tennessee. These curves were used to systematically evaluate t he combined effects of location and facility demand on wood chip feeds tock costs in Tennessee. The cost-supply curves were developed using B RAVO, a GIS-based decision support system which calculates marginal co st of delivering wood chips to a specific location given road network maps and maps of farm-gate prices and supplies of wood chips from shor t, relation energy crops. Marginal costs of delivered chips varied by both facility location in the state and facility demand. Marginal cost s were lowest in central Tennessee, unless the facility demand was gre ater than 2 700 000 dry Mg/y (3 000 000 dry t/y) in which case west Te nnessee was the lowest cost region. Marginal costs rose rapidly with i ncreasing facility demand in the mountainous eastern portion of the st ate. Transportation costs accounted for 18-29% of the delivered cost a nd ranged between $8 and 18/dry Mg ($7 and 16/dry I). Reducing the exp ected farmer participation rate from 100 to 50 or 25% dramatically rai sed the marginal costs of feedstock supply in the east and central reg ions of the state. The analysis demonstrates the need to use geographi cally-specific information when projecting the potential costs and sup plies of biomass feedstock. Published by Elsevier Science Ltd.