Abstract
In order to limit global warming to around 1.5–2.0 °C by the end of the 21st century, there is the need to drastically limit the emissions of CO2. This goal can be pursued by promoting the diffusion of advanced technologies for power generation from renewable energy sources. In this field, biomass can play a very important role since, differently from solar and wind, it can be considered a programmable source. This paper reports a techno-economic analysis on the possible commercial application of gasification technologies for small-scale (2 MWe) power generation from biomass. The analysis is based on the preliminary experimental performance of a 500 kWth pilot-scale air-blown bubbling fluidized-bed (BFB) gasification plant, recently installed at the Sotacarbo Research Centre (Italy) and commissioned in December 2017. The analysis confirms that air-blown BFB biomass gasification can be profitable for the applications with low-cost biomass, such as agricultural waste, with a net present value up to about 6 M€ as long as the biomass is provided for free; on the contrary, the technology is not competitive for high-quality biomass (wood chips, as those used for the preliminary experimental tests). In parallel, an analysis of the financial risk was carried out, in order to estimate the probability of a profitable investment if a variation of the key financial parameters occurs. In particular, the analysis shows a probability of 90% of a NPV at 15 years between 1.4 and 5.1 M€ and an IRR between 11.6% and 23.7%.
Highlights
Fossil fuels are still the major energy sources for power generation in the world but represent the main contributor to greenhouse gas emission [1,2,3]
Biomass gasification can be profitable for the applications with low-cost biomass, such as agricultural waste, with a net present value up to about 6 M€ as long as the biomass is provided for free; on the contrary, the technology is not competitive for high-quality biomass
Biomass gasification is one of the most promising approaches, which can be used for combined heat and power generation and for the production of various products such as fuels and chemicals [6,7,8,9]
Summary
Fossil fuels (coal, oil, and natural gas) are still the major energy sources for power generation in the world but represent the main contributor to greenhouse gas emission [1,2,3]. Biomass gasification is one of the most promising approaches, which can be used for combined heat and power generation and for the production of various products such as fuels (for example hydrogen or methanol) and chemicals [6,7,8,9] In this context, bubbling fluidized-bed (BFB) gasification is one of the most interesting technologies, mainly for the high quality of gas–solid contact and the very efficient mass and heat transfers, and for its good process flexibility, which accommodates variation in fuel quality and allows to utilize different fluidizing agents, reactor temperatures and gas residence times, to add reagents along the reactor height and to operate with or without a specific catalyst [10,11,12]. Due to the uncertainties in the cost estimation, a sensitivity analysis and a statistical analysis on the financial risk—based on the Monte Carlo method—were included in the study, in order to evaluate in what conditions the investment can be profitable
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