Long-term design and analysis of renewable fuel supply chains – An integrated approach considering seasonal resource availability

Abstract

Replacing fossil fuels by renewable liquid fuels produced from electricity, biomass, and carbon dioxide can substantially reduce emissions in the transport sector. A multitude of planning tasks arise as the widespread use of renewable fuels requires extensive investments in renewable electricity generation, fuel production plants, storage facilities, and pipeline-based transport infrastructures. Hence, we develop a mathematical model determining the optimal design and operation of renewable fuel supply chains to support policy decisions for the transport sector. Strategic decisions include multi-period locational decisions on installing wind and solar generation capacities and investment in fuel production plants, storage capacities, and pipeline-based transport infrastructure. Tactical decisions include production, transport, and storage quantities along with the annual seasonal utilization of resources. Our mathematical formulation is able to consider various resource origins as well as production, transport, and storage processes. To reduce the number of consecutive time periods, we divide the planning horizon into strategic and tactical decision levels connected by a cyclic storage formulation. We apply the model to a European case study to support policy makers with insights into advantageous designs of transnational fuel supply chains to enable a climate-neutral European transport sector. Furthermore, we provide additional scenario analyses regarding the maximum installable capacity for renewable electricity generation as well as biomass and carbon dioxide availability, and fuel demand development.