The effects of variations in supply accessibility and amount on the economics of using regional forest biomass for generating district heat

Abstract

The delivery cost of forest biomass to energy plants is one of the determining factors in feasibility of using forest biomass for heat and power generation. The variability in available forest biomass during the year is another important factor that should be considered in feasibility studies since it affects the design of the supply chain and impacts the total delivery cost of biomass. In this paper, we investigate the feasibility of exploiting regional forest biomass to fulfill the fuel demand of a district heating system in Williams Lake, BC considering the effect of biomass availability throughout the year on the delivery cost of forest biomass, which is often overlooked in previous economic feasibility studies. The monthly availability of forest biomass, namely logging residues and sawmill wastes, is forecasted taking into account the historical harvesting data in the region and also considering the accessibility of supply areas due to weather conditions. Although the annual forest biomass supply exceeded the annual demand, there was a significant gap between supply and demand in some months. Therefore, during the months with supply shortage, it would not be possible to meet the district heating system's demand using direct transport of forest biomass. Meanwhile, excess forest biomass in months with extra supply than demand could be stored for further use in month with supply shortage. This would affect the design of the supply chain, its required logistics and consequently the delivery cost of biomass. We identified three potential designs for the supply chain and the required logistics, and then we calculated the delivery cost of forest biomass for each option in our case study. The results showed significant difference in the delivery cost of forest biomass among the supply chain options. Depending on the supply chain design and the supplier locations, delivering forest biomass to the gate of the heating plant could cost as low as $42.75 Odt−1 ($2.19 GJ−1) for direct flow and as high as $128.47 Odt−1 ($6.59 GJ−1) for flow via storage. This illustrates the importance of considering variations in supply amount and its effect on the supply chain design to be able to provide accurate estimates of the biomass delivery cost. Irrespective of the supply chain design, transportation cost had the highest contribution in the total delivery cost of forest biomass to the plant, followed by loading, chipping, and material cost. For the supply chains with storage option, the contribution of the storage cost was higher than the material cost. The provision cost of natural gas to this district heating system was calculated at $6.93 GJ−1. This indicates that using local forest biomass for generating heat in the district heating system in Williams Lake may be economical depending upon the capital and operating costs of the system.