Logistics cost analysis of rice straw pellets for feasible production capacity and spatial scale in heat utilization systems: A case study in Nanporo town, Hokkaido, Japan

Abstract

Rice straw is a promising renewable energy source because it is abundantly available in Asia. This study conducted a case study of logistics cost analysis for rice straw pellets by considering all stages in the supply chain to define the main factors affecting the selling price of rice straw pellets: collection (job-commission or employment of part-time workers), transportation, storage (vinyl greenhouses or storage buildings with larger capacity), pelletizing, and delivery to users with biomass boilers. The selling price was found to be strongly dependent on the production capacity because the investment cost for the pellet production facility had a significant effect of economies of scale. A production capacity of larger than 1500 t y−1 is required for rice straw pellets to compete with wood pellets and fossil fuels in the studied Japanese context if the subsidy rate for the investment is 50%, part-time workers conduct the collection, and rice straw is stored in the storage buildings. Our sensitivity analysis also showed an economically feasible spatial scale: for example, rice straw should be collected within a 20 km radius and the users should be within a 38 km radius when the production capacity is 1500 t y−1. In addition, other critical factors related to the collection of rice straw from the paddy fields and transportation of rice straw rolls to storage were identified as planning factors to further reduce the total logistics cost of rice straw pellets.