If the U.S. wants to start using wood pellets to produce energy, either the government or power customers will have to pay an extra cost, a new University of Georgia study has found.
Right now, “it’s just not economically feasible to use wood pellets in energy production,” said Bin Mei, associate professor of forest resource finance and economics in UGA’s Warnell School of Forestry and Natural Resources.
Wood pellets are used heavily in European power plants because of a mandate to cut fossil fuel emissions, Mei said, but that energy production is heavily supported by government subsidies.
Should U.S. energy providers switch to a “co-firing” method—where a power plant burns both coal and wood pellets, switching between the two—they’d pass on the costs to not only convert to co-firing plants, but also to buy the pricier wood pellets. If a government subsidy won’t pay for the extra costs, Mei said, then consumers would have to pick up the tab.
Mei and co-author Michael Wetzstein with Purdue University recently published their findings in Energy Economics.