Abstract
In this study, an inter-continental agricultural pellet supply chain is modeled, and the production cost and price of agricultural pellets are estimated and compared against the recent cost and price of wood pellets in the global marketplace. The inter-continental supply chain is verified and validated using an integration of an interactive mapping application and a simulation platform. The integrated model is applied to a case study in which agricultural pellets are produced in six locations in Canada and shipped and discharged at the three major ports in Western Europe. The cost of agricultural pellets in the six locations is estimated to be in the range of EUR 92–95/tonne (CAD 138–142/tonne), which is comparable with the recent cost of wood pellets produced in small-scale pellet plants (EUR 99–109/tonne). The average agricultural pellet price shipped from the six plants to the three ports in Western Europe is estimated to be in a range of EUR 183–204 (CAD 274–305/tonne), 29–42% more expensive that the average recent price of wood pellets (EUR 143/tonne) at the same ports. There are several potential areas in the agricultural pellet supply chains that can reduce the pellet production and distribution costs in the mid and long terms, making them affordable supplement to the existing wood pellet markets. Potential economic activities generated by the production of pellets in farm communities can be significant. The generated annual revenue in the biomass logistics system in all six locations is estimated to be about CAD 21.80 million. In addition, the logistics equipment fleet needs 176 local operators with a potential annual income of CAD 2.18 million.
Highlights
Coal remains a major fossil fuel in global energy systems, accounting for almost 40%of electricity generation and more than 40% of energy-related CO2 emissions [1]
In the current wood pellet markets, most wood pellets are traded under long-term contract with cost, insurance, freight (CIF) price terms, meaning that the ag-pellet seller has to bring the ship cargo to the terminal agreed by the contract partners where the seller’s obligations are fulfilled and the discharging cost bears the buyer at the port of discharge ([10,42])
Integrated Biomass Supply Analysis and Logistics (IBSAL)-AgPellet was run for 500 replications and the average values of the biomass logistics costs are discussed below
Summary
Coal remains a major fossil fuel in global energy systems, accounting for almost 40%of electricity generation and more than 40% of energy-related CO2 emissions [1]. Various types of biomass, including woody biomass, agricultural biomass and municipal wastes, have been used to cofire with coal. Among these feedstock sources, woody biomass, in particular wood pellet, has been used in large scale power plants due to its similar physical and chemical properties with coal [4]. Grinding, drying and densifying woody biomass in the form of pellets provide more consistent size and shape particles with higher calorific value compared to unprocessed biomass such as wood chips. Wood pellets can be pulverized to form particles of a suitable size for combustion at the existing pulverized coal-fired power plants [5]
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