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close this bookCERES No. 096 - November - December 1983 (FAO Ceres, 1983, 50 p.)
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Fast-growing trees new energy source for the Philippines

Last June, just three years after the first trees had been planted, the new power plant at Bolinao, in a remote area of the Philippines' Luzon Island, began generation of electricity from wood fuel. One of two recently commissioned dendro-thermal power plants in the Philippines, the Bolinao project-has brought to the operational stage an unusual and previously untested concept in the energy field. What is probably most interesting about the Philippines' dendro-thermal programme is that it has multiple objectives: apart from developing wood as a renewable domestic source of energy, it is also intended to foster reforestation, to provide a new agricultural crop for waste land, and to offer new income opportunities in the rural sector.

Eleven other power plants are under construction and should begin operating within the next year. Tree planting is continuing at 36 farm sites where about 10 000 hectares of trees are already growing. Some 3 500 families, previously landless laborers, have been given 50-year leases to their plots and are engaged in the cultivation of fast-growing energy trees.

To cover the costs of wood lot development, estimated at about US$ 400 per hectare, farmers can obtain 12 per cent interest loans, repayable in eight years with four years grace. With a tree density of about 15 000 per hectare, it appears that yields will exceed 35 wet tons per hectare in the first harvest cycle and perhaps 10 per cent higher in the second cycle. It is expected that there will be about five harvests during the 20 year life span of the trees.

Farmers are guaranteed a farm gate price of US $7.50 for their wood. Production costs have been calculated at $4.70 per ton. This includes an allowance of $2.50 per ton for capital costs, $1.20 per ton for other expenses, and $1.00 per ton for the farmer's own lab our. The labour allowance is on the basis of $1.60 per day, and it is estimated that it takes five man hours to harvest, cut to length, and transport one ton of wood to the farm gate. On the basis of labour earnings from an estimated 200 days' work per year, plus the margin of $2.80 per ton, a farm family can be assured of $1 200 to $1 400 a year income, a very attractive income in the Philippine context for farmers who previously had no land. This figure would nearly double after the loan has been repaid.

On the basis of a farm gate price of $7.50 per ton for wood, it has been calculated that electricity can be sold from the plants at about $0.06 per kilowatt hour, a rate considered competitive with alternative sources of electricity in the Philippines. While no other site has yet duplicated the success achieved at Bolinao, Philippine authorities believe that at least a million hectares of land could be developed for energy tree production. This would mean producing the energy equivalent to 25 million barrels of oil, or about one-third of the nation's current oil consumption. Such a development would mean woodcut units for about 100 000 families and the creation of 150 000 new jobs, it is estimated that rural income would increase by $250 million annually. As a bonus, major strides would be made in reforesting the rapidly eroding Philippine hill" sides.