Costs of producing miscanthus and switchgrass for bioenergy in Illinois

There is growing interest in using perennial grasses as renewable fuels for generating electricity and for producing bio-ethanol. This paper examines the costs of producing two bioenergy crops, switchgrass and miscanthus, in Illinois for co-firing with coal to generate electricity. A crop-productivity model, MISCANMOD, is used together with a GIS to estimate yields of miscanthus across counties in Illinois. Spatially variable yields, together with county-specific opportunity costs of land, are used to determine the spatial variability in the breakeven farm-gate price of miscanthus. Costs of transporting bioenergy crops to the nearest existing power plant are incorporated to obtain delivered costs of bioenergy. The breakeven delivered cost of miscanthus for an average yield of 35.76 t ha(-1) in Illinois is found to be less than two-thirds of the breakeven price of switchgrass with an average yield of 9.4 t ha(-1). There is considerable spatial variability in the breakeven farm-gate price of miscanthus, which ranges between 41 and 58 $ t(-1) across the various counties in Illinois. This together with differences in the distances miscanthus has to be shipped to the nearest power plant causes variability in the costs of using bioenergy to produce electricity. The breakeven cost of bioenergy for electricity generation ranges from 44 to 80 $ t(-1) DM and is considerably higher than the coal energy-equivalent biomass price of 20.22 $ t(-1) DM that power plants in Illinois might be willing to pay. These findings imply a need for policies that will provide incentives for producing and using bioenergy crops based on their environmental benefits in addition to their energy content. (C) 2007 Elsevier Ltd. All rights reserved.