with harvesting biomass residues for heat generation at farm level in the UK, and (3) comparison of a wood fired and oil fired heating system at farm level in the UK. Generic data from other studies have been used for the valuation of environmental externalities.
Direct and indirect economic effects are also taken into account. The economic benefits of biomass compared to coal are shown which can assist in overcoming a significant difference in production costs between the two. Comparing residue use for small scale heat production with advanced bio-energy systems (BIG/CC) shows that the external costs of both systems are similar. Under particular conditions, however, small-scale heat production may result in greater direct employment benefits. In addition, advanced bio-energy systems will generally result in higher environmental costs because of the influence of agrochemical and fertilizer use. Wood heating systems could become more competitive with respect to oil fired systems if external costs and damages from COz emissions in particular are taken into account. The quantitative outcomes shown here should not be considered as the external costs of the fuel cycles considered.
Many impacts have not been valued and large uncertainties persist e.g. with respect to the costs of climate change and numerous dose-response relations. Hence, present state-of-the-art knowledge on external costs is far from allowing optimal resource allocation through market forces. However, a rationale for greater support for bioenergy is provided by the present insights already obtained.