Optimal locations for second generation Fischer Tropsch biodiesel production in Finland

Abstract

A country level spatially explicit mixed integer linear programming model has been applied to identify the optimal Fischer Tropsch biodiesel production plants locations in Finland. The optimal plant locations with least cost options are identified by minimizing the complete costs of the supply chain with respect to feedstock supply (energywood, pulpwood, sawmill residuals, wood imports), industrial competition (pulp mill, sawmill, combined heat and power plants, pellet industries) and energy demand (biodiesel, heat, biofuel import). Model results show that five biodiesel production plants of 390 MWfeedstock are needed to be built to meet the 2020 renewable energy target in transport (25.2 PJ). Given current market conditions, the Fischer Tropsch biodiesel can be produced at a cost around 18 €/GJ including by-products income. Furthermore, the parameter sensitivity analysis shows that the production plant parameters such as investment costs and conversion efficiency are found to have profound influence on the biodiesel cost, and then followed by feedstock cost and plant size. In addition, the variations in feedstock costs and industrial competition determine the proportion of feedstock resource allocation to the production plants. The results of this study could help decision makers to strategically locate the FT-biodiesel production plants in Finland.