Economic Evaluation of Large-Scale Biorefinery Deployment: A Framework Integrating Dynamic Biomass Market and Techno-Economic Models

Jonas Zetterholm, Elina Bryngemark, Johan Ahlström, Patrik Söderholm, Simon Harvey and Elisabeth Wetterlund
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Jonas Zetterholm: Department of Energy Engineering, Division of Energy Science, Luleå University of Technology, SE-971 87 Luleå, Sweden
Johan Ahlström: Department of Space, Earth and Environment, Division of Energy Technology, Chalmers University of Technology, SE-412 96 Gothenburg, Sweden
Simon Harvey: Department of Space, Earth and Environment, Division of Energy Technology, Chalmers University of Technology, SE-412 96 Gothenburg, Sweden
Elisabeth Wetterlund: Department of Energy Engineering, Division of Energy Science, Luleå University of Technology, SE-971 87 Luleå, Sweden

Sustainability, 2020, vol. 12, issue 17, 1-28

Abstract: Biofuels and biochemicals play significant roles in the transition towards a fossil-free society. However, large-scale biorefineries are not yet cost-competitive with their fossil-fuel counterparts, and it is important to identify biorefinery concepts with high economic performance. For evaluating early-stage biorefinery concepts, one needs to consider not only the technical performance and process costs but also the economic performance of the full supply chain and the impacts on feedstock and product markets. This article presents and demonstrates a conceptual interdisciplinary framework that can constitute the basis for evaluations of the full supply-chain performance of biorefinery concepts. This framework considers the competition for biomass across sectors, assumes exogenous end-use product demand, and incorporates various geographical and technical constraints. The framework is demonstrated empirically through a case study of a sawmill-integrated biorefinery producing liquefied biomethane from forestry and forest industry residues. The case study results illustrate that acknowledging biomass market effects in the supply chain evaluation implies changes in both biomass prices and the allocation of biomass across sectors. The proposed framework should facilitate the identification of biorefinery concepts with a high economic performance which are robust to feedstock price changes caused by the increase in biomass demand.

Keywords: supply chain; partial equilibrium; biofuel; soft-linking; price formation (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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