Sustainable biomass portfolio sourcing plan using multi-stage stochastic programming

Motahareh Kashanian, Mir Saman Pishvaee and Hadi Sahebi

Energy, 2020, vol. 204, issue C

Abstract: Selecting the most sustainable biomass sources for biofuel production can overcome sever obstacles in the reliable supply of biomass feedstock, such as its seasonal availability. Developing a biomass portfolio can generally improve the sustainability of future biofuel systems. Bioethanol is an attractive biofuel having the potential for enhancing energy security and environmental safety over fossil fuels. The decisions to be made comprise the optimum amount of bioethanol feedstocks, and the investments to make in alternative activities. Uncertainty is assumed for biomass conversion rate to bioethanol, which is described by a set of scenarios. Therefore, for the entire planning horizon, a tree of scenarios is organized. The problem is formulated as a multi-stage stochastic linear programming problem. The goal is to maximize the total financial benefit. The risk associated with biomass availability affects the viability of biomass utilization and, therefore, should be taken into account when evaluating and analyzing biomass portfolio. In addition, the conditional value at risk (CVaR) is adopted to consider the risk hedge. Using a real case study, computational experiments are presented, showing that the stochastic approach is worth considering in these types of problems. Case study results demonstrate the validity of the proposed model.

Keywords: Biomass portfolio optimization; Biofuel; Stochastic programming; Biomass sourcing plan; Conditional value at risk (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:energy:v:204:y:2020:i:c:s0360544220310306

DOI: 10.1016/j.energy.2020.117923

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