Tactical techno-economic analysis of electricity generation from forest, fossil, and wood waste fuels in a heating plant

Abstract

The Finnish energy industry is subject to policy decisions regarding renewable energy production and energy efficiency regulation. Conventional electricity generation has environmental side-effects that may cause global warming. Renewable fuels are superior because they offer near-zero net emissions. In this study, we investigated a heating mill's ability to generate electricity from forest fuels in southern Finland on a 1-year strategic decision-making horizon. The electricity-generation, -purchase, and -sales decisions are made using three different energy efficiency and forest technology rates. Then the decision environment was complicated by the sequence-dependent procurement chains for forest fuels (below-ground) on a tactical decision-making horizon. With this aim, fuel data of three forest fuel procurement teams were collected for 3 months. The strategic fuel procurement decisions were adjusted to the changed decision environment based on a tactical techno-economic analysis using forest technology rates. The optimal energy product and fuel mixtures were solved by minimizing procurement costs, maximizing production revenues, and minimizing energy losses