Evaluating the economic feasibility of replacing propane with solid biofuels for grain drying – a scenario analysis

Abstract

AbstractThis study investigates the economic feasibility of replacing propane with biomass (solid biofuels) for grain drying under four scenarios. Two scenarios are based on the recently increased price of propane and the possible future changes in prices for propane and biomass. The other scenarios assess the impact of two policies on the cost of energy when carbon pricing is included and a financial incentive program is designed to share the purchase and installation cost of clean technologies such as biomass burners. A farm business in Canada is used as the case study to compare and contrast the energy cost of drying wheat grain over the range of 160 000–400 000 bushels (4355–10 890 t) using wood chip or wood pellet burners instead of propane. The results indicate that, under all scenarios, biomass burners are a more economic option than propane burners for drying grain. In the baseline scenario (no carbon pricing/financial support), cost reductions of 34–62% can be achieved by using a wood chip burner instead of a propane burner. This reduction is estimated to be 52–58% for wood pellet burners versus the propane burner. Every $10tCO2e‐1 increase in the carbon pricing adds about 1.7% to the total drying cost for the propane burner. This further increases the cost saving of switching from propane to biomass, as no carbon pricing is applied to biomass as a renewable energy source. A 50% cost sharing arrangement as a financial support to purchase and install biomass burners can provide a further 2–7% cost saving.