Economic modeling of woody biomass utilization for bioenergy and its application in central Appalachia, USA

Abstract

A mixed integer programming model was developed to estimate the delivered cost of woody biomass, including the costs associated with stumpage, bundling (if any), extraction, storage, loading and hauling, and chipping–grinding under different woody biomass handling systems. The model was designed to optimize a woody biomass based biofuel facility’s location with the objective of minimizing the total annual delivered cost of woody biomass under resource and operational constraints. The model was applied in the central Appalachian region within the state of West Virginia. Results showed that the optimal plant location would be at Addison or Grantsville in West Virginia, depending on the system used when daily demand is 900 tonnes of dry woody biomass. For that base-case scenario, the average delivered cost ranged from $2.30·GJ–1to $3.02·GJ–1across the systems. Extensive sensitivity analysis was performed under different scenarios, including biomass availability and purchase–stumpage price, demand, extraction distance, and fuel pricing. The delivered cost was mostly affected by woody biomass demand. Skidding distance had the least impact on the delivered cost. The results would be useful in facilitating the research and economic development of woody biomass utilization for bioenergy in the region.