Economic Modeling of Energy Supply from Burning Wood Wastes at British Columbia Pulp and Paper Mills

Abstract

This paper analyzes the use of wood wastes to replace the extensive fossil-fuel consumption at nineteen pulp and paper mills in British Columbia, and the further use of wood wastes to produce electricity at these mills. The evaluation, which is based on simulation models of energy consumption at each of the mills, is done from the points of view of both the firms involved and of the economy as a whole. The latter evaluation is carried out using world prices for fossil fuels and the cost of electricity from new British Columbia Hydro projects. The private returns are found to depend primarily on the price paid for fossil fuel and electricity. Some predictions can be made as to the amount that the mill managers would be willing to pay for hauling wood waste (to overcome apparent shortages in some locations) and still earn a positive return on the investment in wood waste-burning facilities.

This paper is condensed from Cox, A. J., and Helliwell, J. F., “Economic Modeling of Energy Supply from Burning Wood Waste at B.C. Pulp and Paper Mills,” Resources Paper No. 21, Programme in Natural Resource Economics, University of British Columbia, 1978. This work has been supported by U.B.C’s Programme in Natural Resource Economics which is financed by the Social Sciences and Humanities Research Council of Canada.