Economic Issues of Biomass Energy Conversion - Biomass Gasification, Pyrolysis and Torrefaction - page 33

potential, which is calculated from the delivered cost and the heating value
of the fuel.

5

$
GJ

Cost of biomass ð $ = dry ton Þ

Projected cost of biomass (2.1)

HHV ð GJ = dry ton Þ

5

Þ
Efficiency of energy conversion technology
(2.2)
The cost of energy derived considers only the fuel cost. So, it is lower
than the actual cost of energy delivered by the plant that includes investment
carrying charge and operation and maintenance expenses.
The cost of biomass could be greatly influenced by two other factors—
disposal and environmental. For example, waste biomass could become an
energy source with a negative price, if municipality was paid a tipping fee
for picking up the waste from the producer. The other factor is environmen-
tal regulations like carbon tax or biomass utilization incentives. For marginal
projects, these incentives could make a biomass economically viable.

ð =

$
GJ

Cost of biomass $ GJ

Cost of energy derived

2.2.2 Product Revenue from Biomass Conversion
To some extent, the economic analysis for biomass plant would depend on
the end use of the product produced. The price paid or the revenue earned
could be different for different products from biomass. Three main revenue
sources of gasification products are as follows:

1. Energy revenue
2. Revenue from chemical production
3. Revenue from transport fuels.

2.2.2.1 Energy Revenue
This may be subdivided into (i) electricity production and (ii) thermal energy
production. Electricity may be produced by operating an integrated gasifica-
tion combined cycle plant (IGCC) or by operating an internal combustion
engine. IGCC plants are used only for large capacity plants (

100 MWe).
In the other means of electricity generation, the produced gas, after clean-
ing, is fired in a reciprocating engine (e.g., diesel engine). This engine in
turn drives an electric generator. This option is attractive for small capacity
units and is suitable for distributed power generation.
Besides electricity, thermal energy (heat) is another commercial product
of biomass. To generate heat, direct combustion is the most cost-effective
method unless there are local restrictions in the use of combustion.
Combined heat, power and gas production that combines several products
together, is gaining popularity. Here, the plant earns revenue from the sale of

.