“Two years ago the U.S. Endowment for Forestry and Communities (the Endowment) and the USDA Forest Service announced a $4 million joint venture to advance promising community-scale wood-to-energy technologies and wood procurement systems. We had hoped the recession was sputtering to an end and that the then still-high price of petroleum would provide a floor that would make alternative energy investments possible,” says Endowment President Carlton Owen. “No one could predict that the recession would linger on and we would see the emergence of very cheap natural gas at the same time.”
The Endowment-led joint venture today announced the first work under the second wave of investments in a $2 million extension of the woody biomass joint venture program. “We’ve provided a grant to Dovetail Partners of Minneapolis, MN, to lead a study designed to provide additional information that will aid us in targeting the bulk of these additional funds at establishing new financial models to aid in appropriate conversion to wood-to-energy systems,” Owen continued. The Dovetail work seeks two primary outcomes: 1) to learn from the successful conversions of schools, hospitals, and other institutional users and to determine the role that non-grant funds (e.g. loans) could play in replicating those successes in the future; and 2) to look at the range of benefits that accrue from potential removal of small diameter and dead and dying trees in public lands settings and to determine ways to monetize some of those values so as to enhance economic viability of infrastructure investments.
“It is important to learn from the existing track record of wood-to-energy systems and to fully value the benefits of healthy forests and responsible management,” says Kathryn Fernholz, Executive Director for Dovetail Partners.
Work in the first phase of the joint venture focused on technologies both in fuels generation/energy production and procurement areas. Several of these investments are showing significant promise.
Among the greatest lessons from the first wave of work and numerous contacts across the nation relates to the scarcity of private capital available in rural areas to aid in conversion to domestic, renewable energy.
“The opportunity to significantly expand wood energy use requires the development of appropriate financial models to attract private investors,” according to Dave Atkins the U.S. Forest Service’s national wood energy program manager. Thus, the role and potential of capital will serve as the focus of round two of the joint venture.