The case of co-firing: The market level effects of subsidizing biomass co-combustion

Lintunen, Jussi; Kangas, Hanna-Liisa

doi:10.1016/j.eneco.2009.11.004

Cited by 24 publications

(19 citation statements)

References 9 publications

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“…They evaluated the technological and economical feasibilities of existing pilot plants, and suggest that there is a need for additional governmental incentive schemes. The effect of subsidizing biomass co-firing is also discussed by Lintunen and Kangas (2010). Their numerical results show that subsidizing biomass combustion in a coal-fired power plant provides great results with minimum investments in renewable technology.…”

Section: Technological and Economical Feasibility Of Co-firingmentioning

confidence: 99%

Optimization models to integrate production and transportation planning for biomass co-firing in coal-fired power plants

2016

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Co-firing biomass is a strategy that leads to reduced greenhouse gas emissions in coal-fired power plants.Incentives such as production tax credit (PTC) are designed to help power plants overcome the financial challenges faced during the implementation phase. Decision makers at power plants face two big challenges.The first challenge is identifying whether the benefits from incentives such as PTC can overcome the costs associated with co-firing. The second challenge is identifying the extent to which a plant should co-fire in order to maximize profits. We present a novel mathematical model that integrates production and transportation decisions at power plants. Such a model enables decision makers evaluate the impacts of co-firing on the system performance and the cost of generating renewable electricity. The model presented is a nonlinear mixed integer program which captures the loss in process efficiencies due to using biomass, a product which has lower heating value as compared to coal; the additional investment costs necessary to support biomass co-firing; as well as savings due to PTC. In order to solve efficiently real-life instances of this problem we present a Lagrangean relaxation model which provide upper bounds and two linear approximations which provide lower bounds for the problem in hand. We use numerical analysis to evaluate the quality of these bounds. We develop a case study using data from nine states located in the southeast region of USA. Via numerical experiments we observe that: (a) Incentives such as PTC do facilitate renewable energy production.(b) The PTC should not be "one size fits all". Instead, tax credits could be a function of plant capacity, or the amount of renewable electricity produced. (c) There is a need for comprehensive tax credit schemes to encourage renewable electricity production and reduce GHG emissions.

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Section: Technological and Economical Feasibility Of Co-firingmentioning

confidence: 99%

Optimization models to integrate production and transportation planning for biomass co-firing in coal-fired power plants

2016

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“…For example, much lower investment is required per unit of installed capacity, because co-firing biomass can use much of the existing infrastructure in each plant (steam cycle, electrical systems, cooling system, and at least part of the boiler), which is reflected in a drastic reduction in the investment, despite the pre-treatment facilities being usually more complex than in a power plant that is used exclusively for biomass [5].…”

Section: Co-firing In Conventional Coal Power Plantsmentioning

confidence: 99%

Biomass waste co-firing with coal applied to the Sines Thermal Power Plant in Portugal

Nunes

Matias

Catalão

2014

Fuel

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Environmental issues raised by the use of fossil fuels lead to the search for alternatives that promote the reduction of emissions of greenhouse gases. CO 2 has been identified as being the most important and urgent to control. Co-firing is a technique that allows the simultaneous combustion of different types of fuels, for example coal and biomass, combining the advantages of both. This study characterizes the advantages of the system and the possibilities of using waste biomass as fuel in a coal-fired thermal power plant. For this, co-firing biomass waste, from forestry operations, with bituminous coal was simulated. Then reductions in CO 2 emissions into the atmosphere from Sines Thermal Power Plant in Portugal were calculated, showing a reduction of more than 1,000,000 tons/year of CO 2. Also it was verified that although environmentally advantageous, co-firing is still not economically viable due to the high cost of the residual biomass, combined with its low-energy density and high transportation costs.

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“…with coal in pulverized fuel power plants. The co-combustion of biomass with fossil fuels is seen as a cost-effective way to increase RES-E production (Baxter, 2005;Lintunen and Kangas, 2010). The main objective of this paper is to study what are the required incentive levels of different policy instruments in order to reach pellet targets in the sawmill industry with given pellet prices.…”

Section: Introductionmentioning

confidence: 99%

Pellet promotion in the Finnish sawmilling industry: The cost-effectiveness of different policy instruments

Mäkelä

Lintunen

Kangas

et al. 2011

JFE

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a b s t r a c tThe demand for wood fuels is increasing as several countries have targets for different types of wood-based energy, e.g. pellets. Sawmills are a source for wood fuels since they can refine their by-products into energy products. We present a model of a profitmaximizing sawmill, and analyze the production and investment decisions of thirty large-scale Finnish sawmills. The model allows the investigation of required policy incentives that enable sawmills to realize the production targets set for pellets. We analyze the policy costs of the investment, production and input subsidies. We found that the production subsidy is an efficient policy instrument.

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The case of co-firing: The market level effects of subsidizing biomass co-combustion

Cited by 24 publications

References 9 publications

Optimization models to integrate production and transportation planning for biomass co-firing in coal-fired power plants

Optimization models to integrate production and transportation planning for biomass co-firing in coal-fired power plants

Biomass waste co-firing with coal applied to the Sines Thermal Power Plant in Portugal

Pellet promotion in the Finnish sawmilling industry: The cost-effectiveness of different policy instruments

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