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Economic analysis and supply chain optimization of biomass gasification at a kraft pulp mill Khadivi, Maziyar

Abstract

Gasification is one of the processing technologies to convert biomass into syngas and renewable natural gas (RNG). The economic feasibility and amount of emission reduction are important factors affecting the investment decisions related to biomass gasification. Uncertainty and variability in parameters impact the economics and emissions of biomass gasification; however, they were not considered in evaluating gasification options in previous studies. The first objective of this research is to evaluate three biomass gasification alternatives with different capacities for syngas/RNG production at a Canadian Kraft pulp mill. The alternatives are evaluated based on the mean value and the risk associated with the net present value and emission reduction. After identifying the best gasification alternative for investment, it is important to minimize the costs and emissions of the biomass supply chain since the supply chain costs can be as high as 50% of the total gasification cost and emissions resulted from the supply chain activities can offset the emissions avoided by replacing fossil fuels with biofuels. Therefore, the second objective of this thesis is to develop a bi-objective optimization model for tactical planning of the forest-based biomass supply chains in order to analyze the trade-offs between the costs and emissions. To evaluate the best investment alternative under uncertainty, Monte-Carlo simulation is first performed to derive the mean value and Value-at-Risk associated with the NPV and emission reduction of each capacity alternative. Next, using the outputs of the Monte-Carlo simulation as the evaluation criteria, the alternatives are ranked based on the multi-criteria decision-making method. According to the weights identified by the pulp mill for the criteria, the small-scale biomass gasification with 38 MW syngas production capacity is the most appropriate alternative for investment. The developed optimization model determines the optimal monthly biomass quantities to be transported, stored, and preprocessed. The case of a 38 MW biomass gasification for the same Kraft pulp mill was considered to apply the supply chain optimization model. The results indicate a maximum of 24% (217 t of CO₂eq.) emissions reduction is possible if the supply chain cost is allowed to increase by 1.3% ($32,734).

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Attribution-NonCommercial-NoDerivatives 4.0 International