580 / 2018-11-10 14:10:45

A Techno-Economic Evaluation of Supply Chains for Torrefied Wood Pellets from British Columbia: Impacts of Plant Configuration and Distance to Market

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Improving economic competitiveness is key for sustainable development of the wood pellet industry. To this aim, we have carried out comprehensive process modeling and simulation of five possible energy-integrated process configurations for production of conventional (CWP) and torrefied (TWP) wood pellets in the Canadian province of British Columbia (BC), with multi-scale models involved as illustrated in the graphical abstract. The simulation results are used for a techno-economic analysis to estimate the capital, operating and total production costs of the different plant configurations/pathways. The analysis is combined with models for transportation costs to generate estimates of the Free On Board (FOB) and Cost Insurance and Freight (CIF) costs of supply chains from Prince George (BC) to different market destinations including Drax in UK, Kochi in Japan, CPG Genessee in Alberta, and OPG Atikokan in Ontario. Monte Carlo sensitivity analysis is performed to confirm the robustness of the conclusions.
The results indicate that over the supply chains, TWPs can help reduce about 20% of costs in comparison with the CWP to both domestic and overseas markets. The production stage contributes over 57% of the total delivery costs, the rests are the transportation costs. In producing TWPs, it is preferable to carry out torrefaction before densification. It is crucial to ensure that the torrefied pellet plant is located in a region with abundant and low-cost feedstocks, low electricity price, low labor cost, and efficient distribution logistics. Due to the low capital cost contribution (10%), torrefaction could be implemented by either building a new plant or upgrading an existing conventional pellet plant.
Costs for delivering wood pellets from BC to Japan by marine transport are comparable to delivery by rail to the neighbouring province (Alberta) in Canada, while delivery to the UK by sea is cheaper than transport to eastern Canada (Ontario) by rail. Thus, the developing market for wood pellets from BC is expected lie outside Canada, in Asia and Europe.