Fossil fuel prices are subject to dramatic market fluctuations.
Global fossil fuel price indexes for the last 30 years indicate coal has the greatest volatility, rising to four times the 2000 price in 2008, and more than trebling in 2011. Oil has similarly shown volatility - varying by two to three-fold over this period, with significant spikes and shocks, most often tightly linked to distinct political and socio-economic events. Reports have shown that recent increases in the cost of European carbon trading have driven up fossil fuel prices there, with coal-generated electricity costs leaping 72%.
Biomass from plantation-grown trees is New Zealand’s most significant renewable energy resource. The Bioenergy Association estimates that there is enough recoverable woody biomass available throughout New Zealand that could replace 60% of current coal use in heat plant today at modest recoverability levels.
This abundance of supply lends itself to proven price stability. Using locally-produced fuel provides greater security of energy supply and reduces New Zealand’s reliance on coal and oil imports. This collaterally improves our balance of trade figures.
The technology applied to the raw biomass product, which transforms it into a transportable, high-energy fuel source for industry, schools and hospitals is mature, proven intellectual property. The processes are replicable country-wide to provide scalable supply.