Optimal Locations for Methanol and CHP Production in Eastern Finland

Finland considers energy production from woody biomass as an efficient energy planning strategy to increase the domestic renewable energy production in order to substitute fossil fuel consumption and reduce greenhouse gas emissions. Consequently, a number of developmental activities are implemented in the country, and one of them is the installation of second generation liquid biofuel demonstration plants. In this study, two gasification-based biomass conversion technologies, methanol and combined heat and power (CHP) production, are assessed for commercialization. Spatial information on forest resources, sawmill residues, existing biomass-based industries, energy demand regions, possible plant locations, and a transport network of Eastern Finland is fed into a geographically explicit Mixed Integer Programming model to minimize the costs of the entire supply chain which includes the biomass supply, biomass and biofuel transportation, biomass conversion, energy distribution, and emissions. The model generates a solution by determining the optimal number, locations, and technology mix of bioenergy production plants. Scenarios were created with a focus on biomass and energy demand, plant characteristics, and cost variations. The model results state that the biomass supply and high energy demand are found to have a profound influence on the potential bioenergy production plant locations. The results show that methanol can be produced in Eastern Finland under current market conditions at an average cost of 0.22 <euro>/l with heat sales (0.34 <euro>/l without heat sales). The introduction of energy policy tools, like cost for carbon, showed a significant influence on the choice of technology and CO2 emission reductions. The results revealed that the methanol technology was preferred over the CHP technology at higher carbon dioxide cost (>145 <euro>/tCO2). The results indicate that two methanol plants (360 MWbiomass) are needed to be built to meet the transport fuel demand of Eastern Finland.