Wood chips come in different shapes, sizes, levels of moisture and contamination and costs. Given the cost per BTU of wood chips as a feedstock (best guess is $2.50 per mmBTU), an efficient energy conversion process could transform them into useful heat or electricity at costs competitive with other distributed renewable energy systems. Technologies that require creating an enormous supply chain of wood chips in order to produce renewable fuel (e.g., cellulosic ethanol) or energy (e.g., large-scale biomass-fired power plants) aren't the highest or most efficient use. All efficiencies will likely be used in managing the supply chain.
On the other hand, fitting an energy conversion system into an existing wood supply chain is appealing. It reduces the delivered cost of feedstock to the plant, and the levelized cost of the heat or electricity produced.
Long Term Opportunities
Long-term trends and opportunities in the biomass industry point to protein production and global agriculture.
I have seen research that estimates it takes 24MJ of energy and 200,000 liters of water per kilogram of produced beef! Why do we grow tomatoes in Mexico and ship them to New York? Confined animal feeding operations are not practical in an energy conversion sense. The energy input requirements for 1 Kcal of beef is 40 Kcal. Yes, 40 times as much. For pork it is 14 times, for lamb it is 57 times, for chicken it is 4 times and for plant proteins it is 2 times as much. Back when we used to hunt for food and there were less people on the planet, this was not an issue. Is there a better way to grow our protein? Perhaps we can't all become vegetarians but, realistically, eating less meat is one of the best ways to make an impact on the environment.
There are other ways to make food supply chains more efficient. New hydroponic greenhouse technologies enable crop production in locations where you never thought you could. Energy, carbon dioxide and waste heat can be utilized right on site. More trucks could get off the road. I am a big fan of growing and buying local, using technology of course.
This is the greatest time in history for entrepreneurs in the biomass industry. Rising energy prices, public awareness, technology breakthroughs and carbon credits will make the next 10 years a great time to innovate. I believe that the waste industry is already starting a major transformation. Distributed biomass power technologies are available and should be deployed in the short-term. Over the long-term, we probably need to change the way we grow our food. These changes present opportunities for entrepreneurs willing to take the challenge to innovate and transform biomass in a more efficient way. I encourage everyone associated with these worthwhile pursuits, and hope you will give me a call when you have a great idea.
++++
Amol Deshpande is a Partner with Kleiner Perkins Caufield & Byers in Menlo Park, California. He will expand on the opportunities in his Opening Plenary address at BioCycle's 9th Annual Conference on Renewable Energy from Organics Recycling.
Reprinted from BioCycle, September 2009, a SustainableBusiness.com Content Partner
