New Energy Farms (NEF) of Leamington, Ontario is leading the development of dedicated biomass feedstocks for a portfolio of products. “NEF is a spinoff company from an opportunity that started as a goal of our farm to find long-term feedstocks for heating our greenhouses,” explains Dean Tiessen, NEF President and owner of Pyramid Farms. “With high energy and input costs, our family farm needed to look for a long-term energy supply that was cost effective and environmentally friendly. NEF was created to take a look at and exploit some of those opportunities we were investigating.”
NEF began looking at miscanthus and has branched out into other biomass species, such as energy cane, Arundo Donax, napier, switchgrass and prairie grasses. “We continue to have a strong investment and breeding program for the commercial production of miscanthus and have one of the largest germplasm collections in the world,” says Tiessen. “NEF has breeders in Germany, Canada and most recently in the US working on miscanthus development. We are using this model to work with other third parties and companies in developing their genetics and taking them to the marketplace.”
Although NEF is involved in the entire value chain from developing genetics to conversion technologies, their priority is to help primary producers get these vegetative and seeded varieties into the field. “Investors have invested in the genetics side and the exciting conversion technologies at the other end, but we saw the biggest gap was the middle of the value chain, which is the farming side,” says Tiessen. “Our first priority is to develop new technologies and systems to establish these crops more cost effectively and at scale. The second is to help navigate this very new business of dedicated biomass feedstocks and develop a biomass procurement management system.”
Launch of New Management Software in 2012
NEF established a joint venture with software company ‘Muddy Boots’ to customize a management system for biomass feedstocks. “Muddy Boots started out developing software to assist farmers and consultants manage day to day activities in modern day agriculture, and have branched out into developing procurement software, environmental validation systems and others,” explains Tiessen. “We are working with them to launch a new software in 2012 that will help the value chain manage biomass procurement.”
NEF wants to provide tools to assist the entire value chain of producers, aggregators and end-users. The goal is to assist farmers and landowners produce and trade energy crop feedstocks to endusers. The software system covers the entire value chain, including crop agronomy, yield prediction, collection and logistics, direct feedstock trading, sustainability audits and royalty collection.
“Our main priority on the primary producer side is to develop strong methods through data collection to improve these crops and productivity to supply end users,” says Tiessen. “Dedicated biomass crops are in their infancy, just as traditional crops were years ago, with massive swings in local production. Today, corn grown in a local area of a 50-mile radius for example would likely have a yield range of less than 10%, unless some disaster hits. However, with these new dedicated biomass crops like miscanthus and switchgrass, we are seeing massive swings of as much as 40 to 50% yield differences in local areas.”
NEF has developed this software management platform to allow for data collection and communication, and early trials have resulted in an increase of production on an aggregated whole by as much as 20% just through simple agronomy opportunities. These biomass crops are grown on marginal or surplus land, so the differences can be much greater. Being marginal lands, they don’t influence food production.
Realizing the Opportunities
Tiessen is optimistic that opportunities for dedicated biomass crops are opening up and will be more economical than solar or wind over the long-term. “We have seen more activity in the biomass feedstock market in the last 6 months than in the past many years,” says Tiessen. “Although biofuels is a big opportunity, there is a range of products in this unique portfolio, from fiber, building materials, chemicals and plastics to new technologies and environmental credits.”
For farmers, using miscanthus as an example, the establishment cost is about $500/acre if a farmer does it themselves, or about $800 to $1000 per acre if they use a service provider. “This is a one time cost for a stand that should produce for at least 30 years or more,” explains Tiessen. “Today, we are receiving about $130/tonne for biomass and with yields on average of 10 tonnes/acre, that’s $1300/acre less $200/acre of work or $1100/acre net income. Nothing else in the market in Ontario can compete on a net dollar right now. Overall, renewable dedicated biomass crops have been economical for my farm.”
For investors and endusers looking to locate facilities, the priorities are geographic areas that have government policies and environmental credits, infrastructure, land available for production and producers interested in growing the crops. This puts places like western Canada in a unique situation, with both suitable land available and underutilized residues that can act as a bridge as dedicated crops are established.
“The future will be a combination of dedicated biomass and annual crops and crop residues that will develop these long term feedstock procurement processes,” says Tiessen. “And ultimately establishing the processing of biomass in Canada to increase jobs and expand finished products for sale and export. As production, technology and industry advances, we believe there is an enormous opportunity for long-term dedicated biomass feedstock production, conversion and viable end markets.”