Terms of Reference - Business Case Working Group of the Steering Committee for the Project to Commercialize Agricultural Biomass for Combustion Energy

Table of Contents

  1. Background
  2. Purpose
  3. Tasks
  4. Deliverables
  5. Business Case Analysis
  6. Members of the Business Case Working Group
  7. Decision-Making

Background

The Business Case Working Group was formed by the Steering Committee for the Project to Commercialize Agricultural Biomass for Combustion Energy to coordinate analysis of business considerations associated with the use of agricultural biomass for combustion energy in Ontario.

While replacement of coal with agricultural biomass in Ontario Power Generation's (OPG) units is the main focus of this project, the business case analysis will also address other potential users of agricultural biomass including the cement industry, agricultural operations (e.g. greenhouses, livestock operations) and others seeking an alternative fuel source.

Purpose

The purpose of the Business Case Working Group is to analyze whether there is a business case for agricultural biomass for combustion to justify commercialization in Ontario. Business considerations will be central to the Steering Committee's overall assessment of whether commercialization of agricultural biomass should be pursued.

Tasks

  1. Assemble the necessary expertise to enable the working group to develop an objective, transparent and flexible analysis of business considerations at each step in the agricultural biomass value chain.
  2. Draw on the expertise of the Technical Working Group, Environmental Sustainability Working Group, and other research underway to analyze whether there is a business case for agricultural biomass.
  3. Analyze the working group's ability to deliver on these Terms of Reference and the need for additional resources.
  4. Develop a draft framework for the business case analysis that includes both quantifiable and unquantifiable inputs. The framework will include a workplan with timelines for all of the required inputs, using the draft Steering Committee Work Plan (June 14, 2010) as a starting point for scoping the working group's work. This framework will be presented to the Steering Committee at its fall 2010 meeting.
  5. Provide advice to the Steering Committee and its other working groups on research gaps that need to be filled to analyze the business case.

Deliverables

  1. Quarterly status updates to the Steering Committee on progress in analyzing the business case. The updates will include a synthesis of what is known and still needs to be known to complete the analysis.
  2. By the end of 2011, the business case analysis will be completed for Steering Committee consideration. The business case will be a key factor in the Steering Committee's overall assessment of agricultural biomass feasibility.

Business Case Analysis

The framework for the business case needs to account for different supply, demand and processing scenarios and be flexible to making adjustments over time as information is revealed. The business case analysis will consider different pathways that businesses could chose to take in pursuing the opportunity.

The following are some of the key components to be considered:

  • Economics
    • Financial analysis at each step in the agricultural biomass value chain
    • Business risk management
    • Impact on competing uses for agricultural biomass
    • Competitiveness with forestry biomass, US-sourced biomass and other sources of energy
  • Risks of proceeding/not proceeding
  • Deliverable schedule
  • Environmental and societal considerations
  • Other items identified in the Steering Committee's Draft Work Plan (June 14, 2010)

Members of the Business Case Working Group

The composition of the Working Group may vary over time based on the issues being examined. Experts may be invited to participate on an on-going basis as members of the working group or contribute on an ad hoc basis.

The core members include:

  • John Kelly, Erie Innovations & Commercialization (Chair)
  • Gord Surgeoner, Ontario Agri-Food Technologies
  • Barry Hill, Ontario Soil and Crop Improvement Association
  • John Clement, Christian Farmers Federation of Ontario
  • Dean Tiessen, Pyramid Farms (Miscanthus grower & business owner, greenhouse owner/operator)
  • Scott Abercrombie, Gildale Farms (aggregator)
  • Kurt Vanclief, Willowlee Sod Farms Ltd. (switchgrass producer)
  • Aung Oo, Sarnia-Lambton Research Park, University of Western Ontario
  • Al Ker, University of Guelph, Institutional Economics, Trade, Risk Management
  • Lovleen Bassan, Ontario Power Generation
  • Stephen Duff, OMAFRA (Senior Economist)
  • Saif Sumbal, OMAFRA (Economist)
  • Helma Geerts, OMAFRA (Policy)

Decision-Making

The Business Case Working Group will provide advice to the Steering Committee.

While private business may consider the information collected for the business case analysis when making business decisions, this project is not intended to be prescriptive about different business models, technologies or opportunities to be pursued.

Steering Committee for the Project to Commercialize Agricultural Biomass for Combustion Energy

Figure 1. Steering Committee for the Project to Commercialize Agricultural Biomass for Combustion Energy

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For more information:
Toll Free: 1-877-424-1300
E-mail: ag.info.omafra@ontario.ca
Author: OMAFRA Staff
Creation Date: 01 December 2010
Last Reviewed: 01 December 2010