The potential to use the thousands of hectares of wilding forests in the region for heating was part of a study just completed by Lloyd McGinty and Rhys Millar, of Ahika Consulting, Dunedin.
Their report, called ''Developing a wood energy industry in Central Otago'' and released to the Otago Daily Times yesterday, says of wilding conifer forests: ''it became apparent that it is not commercially viable to harvest these forest sites solely for wood energy''.
The problem, the report says, is that the cost of harvesting, particularly small trees, is ''disproportionate to the amount of income'' generated from the sale of logs for energy.
Trees for wood energy would be worth about $2-$3 per tonne, net, to forest owners, while trees used for sawlogs were worth $18 per tonne.
The report says the low return might be viable if the object was to create a cleared site for replanting in natives or grass.
However, once wilding forests were cleared, preventing conifer regrowth was, in itself, a ''significant monetary cost'' and required ''tremendous amounts of effort''.
As well, the ''highly fluctuating'' age and class of wilding conifer forests affected their reliability as an energy source, and a ''dramatic decrease'' in wilding conifers was expected after 2048.
However, the ''expected rotation'' could be extended, the report says.
''Better understanding the age class of the wilding forest resource is an important next stage in the development of a wood energy industry in Central Otago.''
The report - called for by the Queenstown Lakes District Council, Central Otago District Council, Energy Efficiency Conservation Authority and Department of Conservation - is being presented to a meeting in Queenstown this afternoon.
The Queenstown Lakes District Council, which has one production forest and one forest that is predominantly wilding, had hoped wilding conifers, along with biowaste from commercial forests, could be turned into woodchips or pellets locally for use by large-scale industries.
However, the study concluded it would not be economically viable to operate a new wood-energy processing business in the Queenstown region for log residue from forestry operations.
''There is insufficient log residue available to specifically enable the development of a full wood-energy supply chain that is specific to this locality.''
The study identified one existing opportunity - the woodchip residue from the Luggate sawmill.
Woodchips from the mill are used on dairy farms and for landscaping, but the study found there was potential to use the material for heating, if it could be dried.
The report says sawdust from the sawmill could be turned into pellets but would also need to be dried.
It notes cartage costs are a ''reasonable component'' of the current retail price of wood pellets sold in Queenstown.
