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The government has published its long-awaited renewable energy strategy and in it are plans to plant energy crops over an area the size of Essex.

The announcement today addresses - if not answers - questions on how the government intends to meet its strategy of supplying 6% of both heat and electricity by 2020 (the current figures are 0.5% and 3% respectively). It even suggests turning over nearly 880,000 acres of land to bio-energy crops.

Despite the potential for producing fuel from biomass, the levels of energy crop planting has fallen 60% in the last two years. The government is therefore assessing whether raising grants for new energy crop plantations to 50% of the cost would have any impact on take-up, and be justified in terms of carbon cost.

But what difference could a biomass fuel economy make to the way we heat our homes and what impact does all this have on the undermanaged, already planted English woodland?

The governor鈥檚 land bank

鈥淣ow this is what I am talking about!鈥� says John Leigh-Pemberton, gentleman farmer, slamming on the Land Rover brakes and causing his terrier, Dizzy to topple off my lap and slam into the glove box.

He points into a piece of gloomy woodland on his 700-acre estate. 鈥淚鈥檓 going to send a man with a machine in here and clear out all the thinnings. That ash tree there will grow really straight and be worth a lot of money in 40 years time.鈥�

It鈥檚 only been in the past couple of years that it has become worthwhile for Leigh-Pemberton to consider paying someone to keep his woodland tidy and sweat his timber assets. The ash tree would have grown bushy without management.

Why? Well, two years ago, following a trip to Austria, Leigh-Pemberton discovered the potential of wood as a fuel.

鈥淎s soon as I came over the border from Germany, there was wood piled by the side of the road, waiting for the chipper to come along,鈥� says the endlessly energetic, tall and handsomely weathered 50 year old in a faded pink shirt. 鈥淭he scales fell from my eyes!鈥�

So, as part of a renovation of deserted farm buildings for holiday lets in 2006, Pemberton fitted a 拢30,000 Austrian wood chip boiler in a disused grain store. It now provides heat and hot water for seven cottages (20 inhabitants), his converted tithe barn (sleeps 30) and a swimming pool.

The machine takes around a cubic metre of woodchip a day or 150 tonnes of a year. That works out at around three tonnes of wood per person annually. Leigh-Pemberton is even running his own utility. He sells heat to his neighbours at 3.5p a kw/h; they save marginally on current oil prices, he says.

Leigh-Pemberton is just one of many people up and down the country 鈥� landowners, middlemen, clients 鈥� energised by the potential of this secure, sustainable and cheap fuel resource. Using wood as fuel helps Leigh-Pemberton balance the books. 鈥淭he value of waste wood makes a difference,鈥� he says. It gives me an internal economy on the farm because I can give myself 拢50 a tonne. That means I can pay someone to clear up all the scruffy wind blow 鈥� the off cuts 鈥� the higgledy-piggledy stuff.鈥�

But these days, all around his estate, wood is piled up, drying and waiting for the chipper. Eventually it will all end up in a trailer and be taken to the storage point. Leigh-Pemberton, whose father, Baron Kingsdown, Robin Leigh-Pemberton, was chairman of Nat West Bank and governor of the Bank of England from 1983-1993, is blessed with a vast, empty grain store where he keeps his chip.

It makes a change. The traditional woodland industry, coppicing 鈥� planting and harvesting straight stems on a 14 to 16 year cycle, in the Leigh-Pemberton manner 鈥� is only barely profitable. His operation is a rarity. The market for the rest of the stuff which topped up his income, the 鈥榯hinnings鈥� and lumps of wood, has collapsed as the pulp industry has moved abroad. The hearth had become a thing of the past.

But following the introduction of an internal market for wood, differences to the Kingsdown estate are already noticeable. Leigh-Pemberton can afford to clear felled wood off the estate because it provides fuel. Like the beech trees that storms blow over and chipped and burned. It gives him hope for the future, he says, and encourages him to bring more woodland into use and employ more people.

Experts say in order to provide a net energy benefit and financial profit, wood for fuel should not travel more than 20 miles. Nonetheless, the rekindling of wood burning seems to provide an economic link between urban demand and rural production that might seem to have been a thing of the past and which maintained woodland at the state at which it best supports a blossoming ecosystem.

The effect of bringing an old industry to life, both on woodlands and their inhabitants 鈥� human and otherwise 鈥� could be dramatic. If a value can be found for 鈥榚arly thinnings鈥� the harvesting of which allows light onto the forest floor, could it make a difference for the health of the countryside?

A seductive experience

To visit Leigh-Pemberton鈥檚 estate is a deeply seductive experience As well as cows and sheep, he also farms cherries, which he sells to Waitrose. It is a return to an old way of doing things when people picked fruit in the summer and coppicing in the winter.

鈥淧lenty of local people once made a living from the woods,鈥� Leigh Pemberton says. 鈥淲e are just beginning to bring into management woods which have been neglected for 50 or 60 years. A whole industry is springing to life again. It offers a plan of investment 鈥� a future 鈥� to large tracts of woodland that have been untouched for years.鈥�

Some of those people are like Eric, in his early sixties, whom I see coppicing on my visit and who learnt the craft when he was thirteen. (To lay some stereotypes to rest, Eric, while having a thick Kent accent, was also listening to Virgin Radio at full blast.)

But others are very much a new, entrepreneurial, breed, such as Mark Lebus, managing director of Surrey-based LC Energy, an energy services company.

A debonair young project manager with specialist plant hire firm, Land and Water Group, Lebus is setting up one of the first renewable energy 鈥榟ubs鈥� that he hopes to see spring up across the country. LC Energy provides customers to latent foresters, such as the Albury Estate, a Surrey fishery. It hires woodsmen, chippers and other equipment. To customers he can provide wood and the all-important energy security. His firm also fits the boilers.

He explains the attraction of the idea. 鈥淚t鈥檚 a great story in so many ways and not just for green reasons. We can allow a big organisation to provide its own fuel from woodland. We can provide the security for fuel if there is a problem. As a side benefit they can invest in land.鈥�

鈥淩enewable wood energy is very local,鈥� he continues. 鈥淔or reasons of sustainability 鈥� fuel miles, type of road transport 鈥� you can鈥檛 move wood fuel more than 20 miles. 鈥淲e have developed a micro example and we are ready to translate it onto a bigger scale.鈥�

So far, his clients include a primary school, a housing development and a care home. Surrey is 鈥� literally, it turns out - leafy. At 22% tree cover, it鈥檚 the woodiest place in the country. But only half of Surrey鈥檚 wood is actively managed. Lomas calculates that his local area 鈥� with 40% tree cover 鈥� could support 1,000 large schools or 2,500 care homes. There are only about 500 of each nearby.

He hopes to be able to roll this model out to more parts of the 5% of the country that he thinks is suitable for a biomass solution. He also envisages working with developers and tenants to enable them to provide their own energy.

鈥淲e could set it up and they could buy it, or we could run it with them or we could run it on our own. Or it could be done on a franchise basis.鈥�

The right price

There is uncertainty whether wood is cheaper or more expensive than oil. But Julian Morgan-Jones, who runs not-for-profit South-East Wood Fuels, with 75 members across the region, keeps pricing 鈥榓ttractive鈥� for his end-users. Like Lebus he is relying on the market to become competitive once the supply chain is developed.

鈥淲ood is difficult to price,鈥� he says on the phone. 鈥淥n the one hand we have an excess of wood, on the other the cost of production is quite high. We keep the margins low to make it attractive to enter the industry. We price it at about 80% of the price of gas.鈥�

He says the demand and the price are rising. 鈥淟ast year we were getting orders for 100 or 200 tonnes. This year, we have had an order for 10,000 tonnes. It could be a hockey stick in terms of demand.鈥�

Prices have gone up accordingly, he says, from 拢65 at the beginning of last year to 拢75-85 tonnes now. He said he has heard of 拢110 a tonne being charged in tree-bald Norfolk.

But Lomas says that stacking it up is still tricky: 鈥淭he challenge is building the supply chain without the demand,鈥� he says. With only 拢4m available in capital grants from Defra and those only covering the cost of a wood chip boiler over and above a fossil fuel-powered device, this does not provide a massive incentive.

He points out that the UK鈥檚 largest heat and power plant in Slough, which provides 80mW of energy, was just bought by Scottish and Southern Energy for 拢50m.

He explains: 鈥溌�4m divided in a complicated lottery which you can only get by filling out a 30 page form isn鈥檛 going to help much.鈥� Most boilers cost between 拢4,000 and 30,000 although feeding mechanisms are extra.

But there is may be another beneficiary of the wood fuel market: the woods themselves.

No such thing as natural woodland

Contrary to popular belief, woodlands need constant management to sustain a broad range of life within them. Trees need to be selectively felled to let the light in.

There is nothing 鈥榥atural鈥� about any of the woodland in England, 鈥榓ncient鈥� or otherwise. It was all planted and maintained by man over the millennia for coppicing, ship building, to provide handles for implements, to burn as charcoal for iron making and for any number of other purposes for which it is seldom used in our petrochemical society.

According to a Natural England report 鈥楽tate of the Natural Environment,鈥� published earlier this month, ground-level flora in woods has declined 36% over the last 30 years. Of 34 bird species recorded in a repeat bird survey eight decreased significantly. Butterfly numbers in woods have slumped, halving since the 1990s.

The problem, according to the report, seems to be darkness. Untended woodland lacks light, ground flora can鈥檛 make headway, there鈥檚 nothing for the insects to eat and so the birds go hungry, too.

鈥淚t鈥檚 a common misconception that well-managed woodland has to leave a lot of dead material for habitat and wildlife purposes,鈥� says Dr. Geoff Hogan of the Forestry Commission鈥檚 advisory arm, the Biomass Energy Centre. 鈥淚n fact, good management makes the woodland much better for wildlife.鈥�

He says the Forestry Commission which owns 205ha manages 100% of its woodland. However it鈥檚 another story for private owners. According to English Nature nearly 50% of the 1.1m ha of the country鈥檚 woodland is in crisis.

Sticks with the plan

The government has big plans for wood fuel and other biomass resources. It wants to source 6% of both heat and electricity from biomass energy. The figures currently stand at 0.5% and 3% respectively. Today鈥檚 report shows they are serious 鈥� or at least talking big 鈥� about energy crops. But it is questionable whether the area the size of Essex needs to be planted.

There are already four million tonnes of unharvested wood in English woodlands, according to the Forestry Commission (FC), enough to supply 500,000 homes with energy and save 800,000 tonnes of CO虏. Woodland sequesters carbon in its growth.

鈥淥utside the forestry, a lot of forest is owned by the Ministry of Defence, prisons, or other government departments,鈥� says Hogan. 鈥淭hey don鈥檛 have forestry as a remit and there is justification to spend money on management.鈥�

In truth, there is a world of complication in the way of a flourishing wood fuel industry that could reinvigorate English woodlands. The supply chain is non-existent, only 5% of the country is within range of a secure wood supply, the capital expenditure for woodchip boilers is high, the industry is very local, awareness is low and woodchip (as opposed to wood pellet) needs space for storage and, in any case, isn鈥檛 economical for private homes. It鈥檚 a classic chicken and egg problem.

On the other hand, there鈥檚 a lot of potential for the UK to increase its use of wood for fuel. The FC is aiming to harvest another two million tonnes of wood per year for wood fuels, or 50% of unharvested wood. This would give wood a 16% (from 10%) share of the countries biomass energy. This, in turn, supplies 3% of the country鈥檚 power.

But, the further oil prices rise, the more widespread Merton-type rules become. And an investment increase in building the supply chain, the more likely it is that Leigh-Pemberton鈥檚 鈥榟iggledy piggledy鈥� wood will find a market.

The stakes for woodland are high. 鈥淭he warm sheltered glades are being lost,鈥� says Rebecca Isted who works in conservation for the FC. 鈥淭he species we value, like bluebells and butterflies are disappearing.鈥�

For once, the answer to reversing species decline does not seem to be idealistic or expensive. 鈥淲e are hopeful that biofuel, if done correctly, can address a lot of these issues,鈥� she says.

It would be a shame if the government took the easy route of planting new crops at the expense of managing the woodland we do have, helping hard-pressed landowners and native species with one sustainable swoop.