Economic assessment and optimization of forest biomass supply chain for heat generation in a district heating system

This research investigates the feasibility of exploiting local forest biomass for district heat generation in Williams Lake, BC. The objectives of this research are (1) to examine the economic viability of delivering forest biomass to the gate of a potential heating plant, and (2) to find a cost-optimized supply chain for delivering biomass to the plant. Considering the impact of biomass availability on the design of the supply chain and the required logistics in the system makes this study distinctive from the previous research. To achieve the first objective, the annual total delivery cost of biomass to the plant, namely the material, handling, processing, and transportation costs, was calculated for supply chain options with and without terminal storages. The results of the feasibility study showed that depending on the distance of source points to the plant, the delivery cost of woodchips to the plant ranged from $2.19 GJ⁻¹ to $2.87 GJ⁻¹. However, the gap between supply and demand in some months indicated that the direct flow of woodchips from source points to the plant would not be always possible. To meet the demand in months with biomass shortage, forest biomass should be stored in a terminal storage although this could increase the total annual cost to $6.59 GJ⁻¹. At the same time, transferring all the plant’s demand via terminal storage would not seem economical since in the months with more supply than demand and also with good accessibility to the collection areas, the direct flow is possible. Using a mix of direct and indirect flows might provide the opportunity to deliver forest biomass to the plant at a lower cost. A linear programming model was used to minimize the total annual cost and to determine the optimal flow of biomass to the heating plant. The optimization results revealed that the optimal flow of biomass would cost $2.62 GJ⁻¹, which is less expensive than the current delivery cost of natural gas to the plant ($6.39 GJ⁻¹). Therefore, the use of forest biomass for energy generation might be economical depending upon the capital and operating costs of the energy conversion facility.Forestry, Faculty ofGraduat