Scenario analysis for sustainable woody biomass energy businesses: The case study of a Japanese rural community

Abstract

Woody biomass is widely used as a renewable energy source to produce electricity and heat, with the goal of reducing CO2 emissions, enhancing energy security, and rejuvenating rural economies. In Japan, the energy usage of woody biomass is currently incentivized by feed-in tariff (FIT) programs. However, a variety of unpredictable factors (e.g., a drastic change in national energy policy and feedstock supply) might undermine the sustainability of woody biomass energy businesses. In order to clarify conditions for designing sustainable woody biomass energy businesses from environmental and economic viewpoints, this paper proposes a method for undertaking scenario analyses where the influences of future uncertainties are analyzed. For quantitative assessment, a woody biomass energy business is modeled as a sequence of processes using a discrete event simulation technique. A case study is carried out with a particular focus on the energy business with a 10 MW woody biomass power generation plant in a Japanese rural community in the period of 2015–2034 (20 years). The results reveal that the business has potential to gain economic profit and halve CO2 emissions when compared with the worst case scenario. Critical factors for enhancing the sustainability of the business include collecting the amount of wood residue used for electricity generation and keeping the selling price of electricity from woody biomass at over 35% of the current price.