Investigating the future supply distribution of industrial grade wood pellets in the global bioenergy market

Roni, Mohammad S.; Lamers, Patrick; Hoefnagels, Ric

doi:10.1080/17597269.2018.1432268

Title: Investigating the future supply distribution of industrial grade wood pellets in the global bioenergy market

Journal Article · 08 February 2018 · Biofuels

DOI: https://doi.org/10.1080/17597269.2018.1432268 · OSTI ID:1473707

^[1];

^[2]

Idaho National Lab. (INL), Idaho Falls, ID (United States)
Utrecht Univ., Utrecht (The Netherlands)

This study analyzes the potential resource distribution in global competitive feedstock markets for industrial grade wood pellets. Based on historic trade patterns and expected future production and demand structures, a set of potential buyers and sellers of industrial grade wood pellets are simulated for 2022, 2030, and 2040. In contrast to previous trade modeling efforts, this study assumes a fully competitive market, i.e., excluding long-term contract arrangements, to show resource distributions under a potential future commodity market. This is done via a non-cooperative bi-level Stackelberg leader-follower game model. Of particular interest is the potential impact of international feedstock competition on the availability of US feedstock resources. The model results show that the main destinations for US wood pellet exports typically pay 10-20% more per tonne than the domestic market. The results show that domestic wood pellets are available to US industry at prices higher than the expected $88 per tonne delivered.

View Accepted Manuscript (DOE)

Cite

Export

Save

Research Organization:: Idaho National Laboratory (INL), Idaho Falls, ID (United States)

Sponsoring Organization:: USDOE Office of Energy Efficiency and Renewable Energy (EERE), Office of Sustainable Transportation and Fuels. Bioenergy Technologies Office (BETO)

Grant/Contract Number:: AC07-05ID14517

OSTI ID:: 1473707

Report Number(s):: INL/JOU-16-38378-Rev000

Journal Information:: Biofuels, Journal Name: Biofuels; ISSN 1759-7269

Publisher:: Taylor & FrancisCopyright Statement

Country of Publication:: United States

Language:: English

References (43)

A penalty function approach for solving bi-level linear programs White, D. J.; Anandalingam, G. Journal of Global Optimization, Vol. 3, Issue 4 https://doi.org/10.1007/BF01096412	journal	January 1993
Techno-economic assessment of pellets produced from steam pretreated biomass feedstock Shahrukh, Hassan; Oyedun, Adetoyese Olajire; Kumar, Amit Biomass and Bioenergy, Vol. 87 https://doi.org/10.1016/j.biombioe.2016.03.001	journal	April 2016
Economic impact of wood pellet co-firing in South and West Alabama Kebede, Ellene; Ojumu, Gbenga; Adozssi, Edinam Energy for Sustainable Development, Vol. 17, Issue 3 https://doi.org/10.1016/j.esd.2013.01.004	journal	June 2013
Restricted generalized Nash equilibria and controlled penalty algorithm Fukushima, Masao Computational Management Science, Vol. 8, Issue 3 https://doi.org/10.1007/s10287-009-0097-4	journal	May 2009
Elasticity of import demand for wood pellets by the European Union Sun, Lili; Niquidet, Kurt Forest Policy and Economics, Vol. 81 https://doi.org/10.1016/j.forpol.2017.02.001	journal	August 2017
A game theory approach in seller–buyer supply chain Esmaeili, M.; Aryanezhad, Mir-Bahador; Zeephongsekul, P. European Journal of Operational Research, Vol. 195, Issue 2 https://doi.org/10.1016/j.ejor.2008.02.026	journal	June 2009
Numerical solutions to coupled-constraint (or generalised Nash) equilibrium problems Krawczyk, Jacek Computational Management Science, Vol. 4, Issue 2 https://doi.org/10.1007/s10287-006-0033-9	journal	November 2006
Production and quality analysis of pellets manufactured from five potential energy crops in the Northern Region of Costa Rica Aragón-Garita, Stephanie; Moya, Roger; Bond, Brian Biomass and Bioenergy, Vol. 87 https://doi.org/10.1016/j.biombioe.2016.02.006	journal	April 2016
A bilevel mixed-integer program for critical infrastructure protection planning Scaparra, Maria P.; Church, Richard L. Computers & Operations Research, Vol. 35, Issue 6 https://doi.org/10.1016/j.cor.2006.09.019	journal	June 2008
Global solid biomass trade for energy by 2020: an assessment of potential import streams and supply costs to North-West Europe under different sustainability constraints Lamers, Patrick; Hoefnagels, Ric; Junginger, Martin GCB Bioenergy, Vol. 7, Issue 4 https://doi.org/10.1111/gcbb.12162	journal	February 2014
A linear two-level programming problem Candler, Wilfred; Townsley, Robert Computers & Operations Research, Vol. 9, Issue 1 https://doi.org/10.1016/0305-0548(82)90006-5	journal	January 1982
An Efficient Point Algorithm for a Linear Two-Stage Optimization Problem Bard, Jonathan F. Operations Research, Vol. 31, Issue 4 https://doi.org/10.1287/opre.31.4.670	journal	August 1983
Two-Level Linear Programming Bialas, Wayne F.; Karwan, Mark H. Management Science, Vol. 30, Issue 8 https://doi.org/10.1287/mnsc.30.8.1004	journal	August 1984
Heating values of wood pellets from different species Telmo, C.; Lousada, J. Biomass and Bioenergy, Vol. 35, Issue 7 https://doi.org/10.1016/j.biombioe.2011.02.043	journal	July 2011
An overview of bilevel optimization Colson, Benoît; Marcotte, Patrice; Savard, Gilles Annals of Operations Research, Vol. 153, Issue 1 https://doi.org/10.1007/s10479-007-0176-2	journal	April 2007
Long-term operation of biomass-to-liquid systems coupled to gasification and Fischer–Tropsch processes for biofuel production Kim, Kwangsu; Kim, Youngdoo; Yang, Changwon Bioresource Technology, Vol. 127 https://doi.org/10.1016/j.biortech.2012.09.126	journal	January 2013
Biofuel supply chain design under competitive agricultural land use and feedstock market equilibrium Bai, Yun; Ouyang, Yanfeng; Pang, Jong-Shi Energy Economics, Vol. 34, Issue 5 https://doi.org/10.1016/j.eneco.2012.01.003	journal	September 2012
The suitability of wood pellet heating for domestic households: A review of literature Thomson, Harriet; Liddell, Christine Renewable and Sustainable Energy Reviews, Vol. 42 https://doi.org/10.1016/j.rser.2014.11.009	journal	February 2015
A general bilevel linear programming formulation of the network design problem Ben-Ayed, Omar; Boyce, David E.; Blair, Charles E. Transportation Research Part B: Methodological, Vol. 22, Issue 4 https://doi.org/10.1016/0191-2615(88)90006-9	journal	August 1988
Lignocellulosic feedstock supply systems with intermodal and overseas transportation Hoefnagels, Ric; Searcy, Erin; Cafferty, Kara Biofuels, Bioproducts and Biorefining, Vol. 8, Issue 6 https://doi.org/10.1002/bbb.1497	journal	May 2014
A supply chain network design model for biomass co-firing in coal-fired power plants Roni, Md. S.; Eksioglu, Sandra D.; Searcy, Erin Transportation Research Part E: Logistics and Transportation Review, Vol. 61 https://doi.org/10.1016/j.tre.2013.10.007	journal	January 2014
Modeling price-driven interactions between wood bioenergy and global wood product markets Zhang, Sijia; Gilless, J. Keith; Stewart, William Biomass and Bioenergy, Vol. 60 https://doi.org/10.1016/j.biombioe.2013.10.027	journal	January 2014
Mathematical Programs with Optimization Problems in the Constraints Bracken, Jerome; McGill, James T. Operations Research, Vol. 21, Issue 1 https://doi.org/10.1287/opre.21.1.37	journal	February 1973
Assessment of different feedstocks in South Tyrol (Northern Italy): Energy potential and suitability for domestic pellet boilers Prando, Dario; Boschiero, Martina; Campana, Daniela Biomass and Bioenergy, Vol. 90 https://doi.org/10.1016/j.biombioe.2016.03.039	journal	July 2016
Strategic supply system design - a holistic evaluation of operational and production cost for a biorefinery supply chain: Strategic biorefinery feedstock supply system design Lamers, Patrick; Tan, Eric C. D.; Searcy, Erin M. Biofuels, Bioproducts and Biorefining, Vol. 9, Issue 6 https://doi.org/10.1002/bbb.1575	journal	August 2015
Leadership and Competition in Network Supply Chains Majumder, Pranab; Srinivasan, Ashok Management Science, Vol. 54, Issue 6 https://doi.org/10.1287/mnsc.1070.0752	journal	June 2008
The Linear-Quadratic Bilevel Programming Problem Júdice, J. J.; Faustino, A. INFOR: Information Systems and Operational Research, Vol. 32, Issue 2 https://doi.org/10.1080/03155986.1994.11732240	journal	May 1994
An exploratory game-theoretic analysis of biomass electricity generation supply chain Nasiri, Fuzhan; Zaccour, Georges Energy Policy, Vol. 37, Issue 11 https://doi.org/10.1016/j.enpol.2009.06.008	journal	November 2009
A Two-Sided Optimization for Theater Ballistic Missile Defense Brown, Gerald; Carlyle, Matthew; Diehl, Douglas Operations Research, Vol. 53, Issue 5 https://doi.org/10.1287/opre.1050.0231	journal	October 2005
A Bilevel Model for Toll Optimization on a Multicommodity Transportation Network Brotcorne, Luce; Labbé, Martine; Marcotte, Patrice Transportation Science, Vol. 35, Issue 4 https://doi.org/10.1287/trsc.35.4.345.10433	journal	November 2001
A Representation and Economic Interpretation of a Two-Level Programming Problem Fortuny-Amat, José; McCarl, Bruce Journal of the Operational Research Society, Vol. 32, Issue 9 https://doi.org/10.1057/jors.1981.156	journal	September 1981
Game-theoretic modeling and optimization of multi-echelon supply chain design and operation under Stackelberg game and market equilibrium Yue, Dajun; You, Fengqi Computers & Chemical Engineering, Vol. 71 https://doi.org/10.1016/j.compchemeng.2014.08.010	journal	December 2014
Evaluation of wood pellet application for residential heating in British Columbia based on a streamlined life cycle analysis Pa, Ann; Bi, X. T.; Sokhansanj, Shahab Biomass and Bioenergy, Vol. 49 https://doi.org/10.1016/j.biombioe.2012.11.009	journal	February 2013
Solving discretely-constrained MPEC problems with applications in electric power markets Gabriel, Steven A.; Leuthold, Florian U. Energy Economics, Vol. 32, Issue 1 https://doi.org/10.1016/j.eneco.2009.03.008	journal	January 2010
Qualitative insights into the commercialization of wood pellets: The case of Andalusia, Spain García-Maroto, Inmaculada; Muñoz-Leiva, Francisco; Rey-Pino, Juan Miguel Biomass and Bioenergy, Vol. 64 https://doi.org/10.1016/j.biombioe.2014.02.013	journal	May 2014
Bilevel approach to wind-CSP day-ahead scheduling with spinning reserve under controllable degree of trust Pousinho, H. M. I.; Esteves, J.; Mendes, V. M. F. Renewable Energy, Vol. 85 https://doi.org/10.1016/j.renene.2015.07.022	journal	January 2016
Analysis of the global wood‐chip trade's response to renewable energy policies using a spatial price equilibrium model Jiang, Wei; Searle, Stephanie; Siddiqui, Sauleh Biofuels, Bioproducts and Biorefining, Vol. 11, Issue 3 https://doi.org/10.1002/bbb.1761	journal	February 2017
Effect of process parameters and raw material characteristics on physical and mechanical properties of wood pellets made from sugar maple particles Nguyen, Quy Nam; Cloutier, Alain; Achim, Alexis Biomass and Bioenergy, Vol. 80 https://doi.org/10.1016/j.biombioe.2015.06.010	journal	September 2015
Techno-economic analysis of decentralized biomass processing depots Lamers, Patrick; Roni, Mohammad S.; Tumuluru, Jaya S. Bioresource Technology, Vol. 194 https://doi.org/10.1016/j.biortech.2015.07.009	journal	October 2015
European wood pellet market integration – A study of the residential sector Olsson, Olle; Hillring, Bengt; Vinterbäck, Johan Biomass and Bioenergy, Vol. 35, Issue 1 https://doi.org/10.1016/j.biombioe.2010.08.020	journal	January 2011
International and domestic uses of solid biofuels under different renewable energy support scenarios in the European Union Hoefnagels, Ric; Resch, Gustav; Junginger, Martin Applied Energy, Vol. 131 https://doi.org/10.1016/j.apenergy.2014.05.065	journal	October 2014
Wood pellets production costs and energy consumption under different framework conditions in Northeast Argentina Uasuf, Augusto; Becker, Gero Biomass and Bioenergy, Vol. 35, Issue 3 https://doi.org/10.1016/j.biombioe.2010.12.029	journal	March 2011
A Representation and Economic Interpretation of a Two-Level Programming Problem Fortuny-Amat, Jose; McCarl, Bruce The Journal of the Operational Research Society, Vol. 32, Issue 9 https://doi.org/10.2307/2581394	journal	September 1981