Techno-economic assessment of an industrial prosumer with biomass investment and time varying tariffs: An Australian case study

Abstract

This paper investigates the potential for a value chain framework to deliver impact through innovation across the timber manufacturing process. A new and efficient combustion technology that converts timber waste to energy is considered for this study. The framework to estimate the new energy costs and savings derived from the new technology, compared with current supply and demand scenarios, as well as the value generated by waste streams. The opportunity of selling excess energy to the grid or local area has been investigated. Two alternatives of time-varying tariffs and time-varying tariffs with biomass, are used for assessing the costs. According to the numerical results, tariff 3, with 25,000 tonnes of biomass feedstock per year, is the best option for the mill. The price efficiency index is reduced by approximately 40% compared to this option’s usual business. In addition, the investor can save the whole energy bill compared to the current business as usual. The investor could make a profit of $460,401 per year by selling energy to the grid. The annual saving is around six times higher than the savings gained using a time-varying tariff alone. However, this option requires $1,811,635 as annual life cycle cost, with a payback period of ten years. The lowest levelised cost of energy of 0.14 c/kWh is also obtained for this option.