Bioenery Combines in District Heating Systems: Prospects for a Future Growth Industry?
affiliation not provided to SSRN
Göteborg University - School of Business, Economics and Law
Göteborg University - Department of Business Administration
September 5, 2010
District heating offers opportunities for integration of bioenergy production (e.g. of biofuel). The aim of this paper is to assess the environmental benefit and the economic value of such integration, in order to evaluate the prospect for bioenergy combines in district heating systems. Since the detailed characteristics of the district heating system are crucial for the feasibility for integration of bioenergy production, the assessment is based on four real district heating systems. The environmental evaluation shows that the decrease in green house gas emissions from a combine are in proportion to the increase in output of CO2 neutral energy products. However, the CO2 reduction per used quantity of biomass is higher in conventional combined heat and power production as long as marginal electricity is related to high CO2 emissions. Also the economic evaluation show ambiguous results: two cases had negative net present value even for low discount rates, while the two other cases showed to be more economically robust. In addition to this, a more detailed analysis of the industrial conditions for the integration shows a need for achieving a fit regarding several operational, strategic and economic circumstances for this type of business ventures. Two important conclusions that can be drawn from this is that: 1) not all district heating systems are suitable for bioenergy combines 2) there are many barriers for a wide spread adoption of bioenergy combines.
Number of Pages in PDF File: 9
Keywords: bioenergy, combines, district heating, investment
JEL Classification: M10, M20, O22, O33, Q20, Q42, R32, R53working papers series
Date posted: February 14, 2011
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