Examining the economic feasibility of miscanthus in Ontario: An application to the greenhouse industry

Recent policies, such as the Green Energy Act in the Canadian province of Ontario, have placed increasing emphasis on the development of renewable energy sources. One source that has received considerable attention in Europe, but very little in Canada, is the energy crop miscanthus. This study examines the economic feasibility of miscanthus from a Canadian perspective. A net present value approach is used to determine the breakeven price of miscanthus production in Ontario. Based on assumptions specific to Ontario regarding miscanthus production, input costs, and opportunity costs associated with alternative land use, the breakeven price is estimated to be $88.02/t. To account for uncertainty inherent in the imposed assumptions, sensitivity analysis is conducted on various life cycle factors, yield, and cost components. The results of this analysis indicate a range of breakeven prices from $77.79 to $105.08/t. These results are then applied to Ontario's greenhouse industry, where the cost of energy derived from miscanthus is found to be competitive with the costs of current non-renewable energy sources. (C) 2012 Elsevier Ltd. All rights reserved.