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Large-scale introduction of forest-based biorefineries: Actor perspectives and the impacts of a dynamic biomass market
Luleå University of Technology, Department of Engineering Sciences and Mathematics, Energy Science.ORCID iD: 0000-0002-5662-570x
Department of Space, Earth and Environment, Division of Energy Technology, Chalmers University of Technology, Gothenburg, Sweden.
Luleå University of Technology, Department of Business Administration, Technology and Social Sciences, Social Sciences.ORCID iD: 0000-0001-9606-5981
2020 (English)In: Biomass and Bioenergy, ISSN 0961-9534, E-ISSN 1873-2909, Vol. 142, article id 105782Article in journal (Refereed) Published
Abstract [en]

Large-scale implementation of forest-based biofuel production will have an impact on biomass prices, something which in turn will affect biofuel production costs. The profitability of emerging biofuel production technologies is usually assessed using techno-economic or market approaches. While techno-economic approaches have a detailed description of technologies within plant-level or supply chain system boundaries, they build on exogenously given static biomass prices. Conversely, market approaches have a consistent description of the economic system including market interactions for prices within local or national boundaries, but they generally lack technological depth. This paper combines these two approaches using an iterative framework for a case study optimising the production cost of liquefied biomethane (LBG) using different configurations of sawmill-integrated biomass gasification.

Cost estimates are developed using system boundaries surrounding a LBG production plant, and the Swedish national borders, reflecting the plant-owner and policymaker perspectives, respectively. The results show that different plant configurations are favoured depending on the choice between minimising the biofuel production cost for the plant-owner or for the policymaker. Market dynamics simulated by the iterative procedure show that a direct policy support of 36–56 EUR/MWh would be needed to sustain large-scale LBG production, which is 12–31% higher than the necessary policy support estimated based on static biomass prices.

Place, publisher, year, edition, pages
Elsevier, 2020. Vol. 142, article id 105782
Keywords [en]
Price formation, Supply chain, Policymaker, Plant-owner, Biofuel, Large-scale
National Category
Energy Engineering Economics
Research subject
Energy Engineering; Economics
Identifiers
URN: urn:nbn:se:ltu:diva-80974DOI: 10.1016/j.biombioe.2020.105782ISI: 000588425700043Scopus ID: 2-s2.0-85091668557OAI: oai:DiVA.org:ltu-80974DiVA, id: diva2:1471492
Note

Validerad;2020;Nivå 2;2020-09-29 (alebob)

Available from: 2020-09-29 Created: 2020-09-29 Last updated: 2021-05-21Bibliographically approved
In thesis
1. Evaluation of emerging forest-industry integrated biorefineries: Exploring strategies for robust performance in face of future uncertainties
Open this publication in new window or tab >>Evaluation of emerging forest-industry integrated biorefineries: Exploring strategies for robust performance in face of future uncertainties
2021 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

Biorefineries have been promoted to reduce dependency on fossil resources, increase self-sufficiency, and revitalise rural areas. Commercial deployment of forest-based biorefineries has been slow, although academic research has identified several technology options as promising in terms of both costs and resource usage. The low deployment of forest-based biorefinery technologies can be attributed to technology-specific (such as capital cost, process immaturities, and scale-up challenges) or market related (such as biomass and fuel prices, and lack of long-term stable legislation) barriers. The economic and greenhouse gas (GHG) performance of emerging forest-based biorefineries will be highly affected by the assumed characteristics of the surrounding system, such as the assumed energy prices and reference GHG emissions. Future energy prices and policy landscapes are highly uncertain, and, additionally, a successful commercialisation of biorefineries can be expected to have a substantial impact on biomass prices. To fully assess the future performance of emerging biorefinery concepts, these future uncertainties need to be incorporated in the evaluation to identify robust biorefinery concepts that have a high performance for a large set of future market developments. The performance of biorefinery concepts is often assessed using techno-economic approaches, typically using the system boundaries either around the plant, or using a larger geographical area, depending on the scope of the study. The choice of system boundary affects the appropriate methodological choices for the assessment and will depend on the perspective of the evaluation.

This thesis examines the performance of emerging forest industry integrated biorefinery concepts in terms of economy, GHG mitigation potential, and policy support requirement. The aim is to explore strategies to help identify biorefinery concepts with a robust performance considering plant-level design choices and surrounding economic uncertainties. Two perspectives are adopted and compared; i) the performance as seen by a plant-owner, related to the economic performance required for investments to occur, and ii) the performance as seen by a policymaker, related to the cost and impact of implementing the technology on a national level. Biorefinery concepts based on thermochemical conversion technologies are investigated, as they are well suited to a wide variety of residual feedstocks from the forest.

The results show that the production capacity of the biorefinery has a major impact on the economic performance due to economy-of-scale effects. Very large facilities can, from a policymaker perspective, constitute a way to enable a cost-efficient large-scale deployment of biorefineries, while they are not necessary favoured from a plant-owner perspective. This is due to the cost structure of the large-scale deployment of biorefineries, and the division of costs between the plant-owner and other actors in the system.

Traditional techno-economic approaches can be insufficient to identify promising technology configurations considering the wide array of future economic conditions and uncertainties faced by both plant-owners and policymakers. To make any conclusive judgement of the future performance of emerging technologies and investments that can be in operation for more than 20 years, future market developments must be considered. In this thesis, traditional techno-economic analysis is complemented with additional approaches to gain further understanding regarding the future performance of biorefineries. The combined approaches provide complementary insights regarding likely ranges of the future performance depending on future policy ambition levels, as well as impacts of changed biomass prices resulting from the large-scale introduction of biorefineries.

The combined approaches also highlight that, from an economic rationale perspective, policy uncertainty is, in fact, not a major contributor to postponed investments in emerging forest industry-integrated biorefineries. Despite this, the overall results show that most of the examined forest-industry integrated biorefinery concepts would require substantial policy support to become financially viable. A complicating factor is that increased policy support premiering the use of renewable fuels will likely decrease the future prices for the fossil alternatives due to the reduced demand.

This thesis demonstrates that in order to identify robust biorefinery concepts, a multifaceted approach is required to be able to fully capture the interplay between biorefinery configurations and economic performance in face of future uncertainties. Firstly, the plant-owner needs a high probability of a profitable investment; otherwise, investments will not occur. Secondly, for the policymaker, high GHG performance is required, while the cost for large-scale deployment of biorefineries for the entire energy system needs to be kept low. These different objectives can sometimes be at odds with each other, and the policymaker must thus create market incentives that simultaneously premier investments in biorefinery configurations, and benefits the entire energy system.

Place, publisher, year, edition, pages
Luleå: Luleå University of Technology, 2021
Series
Doctoral thesis / Luleå University of Technology 1 jan 1997 → …, ISSN 1402-1544
Keywords
Biorefinery, Biomass, Forest industry, Biofuels, Investment, Gasification, Fast pyrolysis
National Category
Energy Systems
Research subject
Energy Engineering
Identifiers
urn:nbn:se:ltu:diva-84585 (URN)978-91-7790-864-7 (ISBN)978-91-7790-865-4 (ISBN)
Public defence
2021-10-01, E632, Luleå, 10:00 (English)
Opponent
Supervisors
Funder
Swedish Energy Agency, Forskarskolan energisystem
Available from: 2021-05-24 Created: 2021-05-21 Last updated: 2024-04-11Bibliographically approved

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Zetterholm, JonasBryngemark, Elina

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