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From exogenous to endogenous development in Scottish forestry: the feasibility of small-scale wood energy enterprise

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  • Lasse Okkonen

Abstract

This paper presents a change in the Scottish forestry policy from the exogenous to the endogenous development approach, and feasibility of heat entrepreneurship based on locally produced woodfuels in the Highlands of Scotland. The cost structure and heat pricing in the case of an 800 kW solid fuel boiler is presented, and the profitability of local heat entrepreneurship is analysed with scenarios of different investment costs and fuel prices. The results indicate that a district heating (DH) system, using locally produced woodchips, could produce heat at a lower price than single-house heating systems using light fuel oil. The profitability of replacing existing heating units by investing in a new district heating (DH) scheme is very dependent on the available investment support, price level of woodchips and substituted light fuel oil, and the amount of sold energy. In the case of an 800 kW DH scheme, and woodchip prices of 14 and 22 €/MWh, investments should remain under break-even points of 280 and 420 €/kW of heating power (230,000-335,000€).

Suggested Citation

  • Lasse Okkonen, 2008. "From exogenous to endogenous development in Scottish forestry: the feasibility of small-scale wood energy enterprise," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 51(2), pages 221-232.
    • Handle: RePEc:taf:jenpmg:v:51:y:2008:i:2:p:221-232
    DOI: 10.1080/09640560701864852
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    Cited by:

    1. Okkonen, Lasse & Lehtonen, Olli, 2017. "Local, regional and national level of the socioeconomic impacts of a bio-oil production system – A case in Lieksa, Finland," Renewable and Sustainable Energy Reviews, Elsevier, vol. 71(C), pages 103-111.
    2. Olli Lehtonen & Lasse Okkonen, 2013. "Regional socio-economic impacts of decentralised bioeconomy: a case of Suutela wooden village, Finland," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 15(1), pages 245-256, February.
    3. Okkonen, Lasse & Lehtonen, Olli, 2016. "Socio-economic impacts of community wind power projects in Northern Scotland," Renewable Energy, Elsevier, vol. 85(C), pages 826-833.
    4. Okkonen, Lasse & Suhonen, Niko, 2010. "Business models of heat entrepreneurship in Finland," Energy Policy, Elsevier, vol. 38(7), pages 3443-3452, July.
    5. Juha Laitila & Robert Prinz & Lauri Sikanen, 2019. "Selection of a chipper technology for small-scale operations - a Finnish case," Journal of Forest Science, Czech Academy of Agricultural Sciences, vol. 65(4), pages 121-133.
    6. Nourelfath, Mustapha & Lababidi, Haitham M.S. & Aldowaisan, Tariq, 2022. "Socio-economic impacts of strategic oil and gas megaprojects: A case study in Kuwait," International Journal of Production Economics, Elsevier, vol. 246(C).
    7. Lehtonen, Olli & Okkonen, Lasse, 2016. "Socio-economic impacts of a local bioenergy-based development strategy – The case of Pielinen Karelia, Finland," Renewable Energy, Elsevier, vol. 85(C), pages 610-619.

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