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Wood pellets production costs and energy consumption underdifferent framework conditions in Northeast Argentina

Augusto Uasuf*, Gero Becker

Institute of Forest Utilization and Work Science, Faculty of Forestry, University of Freiburg, Werthmannstraße 6, 79085 Freiburg, Germany

a r t i c l e i n f o

Article history:

Received 8 September 2009

Received in revised form

14 December 2010

Accepted 21 December 2010

Available online 14 January 2011

Keywords:

Renewable energy

Wood pellets

Energy consumption

Production costs

Sensitivity analysis

* Corresponding author. Tel.: þ49 761 203 37E-mail address: augusto.uasuf@fobawi.un

0961-9534/$ e see front matter ª 2010 Elsevdoi:10.1016/j.biombioe.2010.12.029

a b s t r a c t

The development of cleaner and renewable energy sources are needed in order to reduce

dependency and global warming. Wood pellets are a clean renewable fuel and has been

considered as one of the substitutes for fossil fuels. In Argentina, large quantities of

sawmill residues are still unused and wood pellets production could be seen as both, as an

environmental solution and an extra economical benefit. The general aim of this study was

to determine the wood pellets production costs and energy consumption under different

framework conditions in northeast Argentina. The specific costs of wood pellets for the

different scenarios showed relative lower costs comparing to the ones reported in other

studies, ranging from 35 to 47 €/Mgpellets. Raw material costs represented the main cost

factor in the calculation of the total pellets production costs. A lower specific production

cost was observed when 50% of the raw material input was wood shavings. The specific

electricity consumption per metric ton of pellet was lower in scenarios with higher

production rate. Lower heat energy consumption was observed in scenarios that have

a mixed raw material input. The most promising framework condition for Northeast

Argentina, in terms of costs effectiveness and energy consumption could be acquired with

production rates of 6 Mg/h with sawdust and wood shavings as raw material. However,

simultaneous increment of the electricity by 50% and raw material price by 100% may

increase the specific costs up to 50%.

ª 2010 Elsevier Ltd. All rights reserved.

1. Introduction couldbeseenaspartofa solutionto the fossil fuelsdependency

There is a continuous growth of the global energy consump-

tion and this raises urgent problems that should be solved in

the short term. During 2006, 79% of the global final energy

consumption belonged to fossil fuels sources [1]. The larger

part of mineral oil reserves is located within a few countries,

making a volatile energy supply. In addition, the use of fossil

fuels causes numerous environmental problems, such as local

air pollution and greenhouse gas emissions [2].

In 2006, about 18%of global final energy consumption came

from renewable energy sources [1]. The development of clea-

ner and renewable energy sources from biomass feedstock

54; fax: þ49 761 203 3763.i-freiburg.de (A. Uasuf).ier Ltd. All rights reserved

and global warming. One advantage is that biomass is world-

wide available and it may be produced and consumed on

a CO2-neutral basis [3e5].

Wood pellets are a clean renewable fuel, mostly produced

from highly compressed sawdust, planer shavings and bark.

This fuel has been considered as one of the substitutes for

fossil fuels like coal and oil for heating and cogeneration [6].

Large volumes of pellets are nowadays produced for the large-

scale generation of heat and power, in order to replace coal

with sustainable energy resources. However, wood pellets

may also be utilized in domestic furnaces and medium scale

boilers. In general trade flows are between neighboring

.

b i om a s s an d b i o e n e r g y 3 5 ( 2 0 1 1 ) 1 3 5 7e1 3 6 61358

countries, but long distance trade is also occurring. Common

international trade flows include export of wood pellets from

Canada, Eastern Europe and Brazil to Sweden, Belgium, the

Netherlands and the United Kingdom [7].

Some regions may have much larger biomass availability

for wood pellet production than others. In Latin America,

wood processing industries are not fully developed and large

amounts of mechanical wood processing industry by-prod-

ucts are still underused. At the moment, in Argentina,

mechanical wood processing by-products are to a very limited

extend utilized by the pulp and paper and by the particle board

industries. Large quantities of sawmill residues are still

unused and wood pellets production could be seen as both, as

an environmental solution and an extra economical benefit.

However, wood pellet production costs need to be assessed in

detail before to start a pellet production plant [8].

Wood pellets production costs are influenced by several

factors, such as biomass and electricity price. A better

economic and sustainable analysis of a wood pellet project

could be acquired if production costs and energy consumption

are assessed under different framework conditions. There-

fore, the general aim of this study was to determine the wood

pellets production costs and energy consumption under

different framework conditions in Northeast Argentina.

Fig. 1 e Map of Argentina the northeast region where the

main forest plantations are situated.

2. Methodology

2.1. Study site

According to the last forest inventory (1998), Argentina had

780.396 ha of forest plantations [9]. In 2006, the total amount of

harvestedbiomass fromplantationswas9.9millionMg1 (fresh)

and the total roundwood consumed was 7.6 million Mg [10].

The main plantation forest region of Argentina is situated in

the northeast of the country (Fig. 1) and represents 70% of the

total forest plantations [9]. The region is represented by the

province of Misiones, Corrientes and Entre Rıos. Themain tree

species are Pinus elliotii, Pinus taeda and Eucalyptus sp.

In developed countries as well as in developing countries

there is a lack of data regarding annual residues production.

The reason could be that residues production is seen as

a peripheral activity and is not taken account in the whole

forest supply chain. However, preliminary calculations

made by the author and based on conversion factors sour-

ces from literature [11] showed a potential availability of

4 million Mg/year of wood mechanical processing industry

by-products.

2.2. Production costs assessment

In this study, the different types of cost present in a wood

pellet production process were divided into two groups:

capital costs and operating costs. The capital costs include

annual capital costs (annuity) and service and maintenance

costs.

The annual capital cost Cc (€/year) was calculated with the

following formula:

1 Mg refers to megagram that equals 1 ton.

Cc ¼ CRF Ic (1)

where CRF is the capital recovery factor and Ic is the invest-

ment costs. The investment costs were all the costs related to

general construction, purchase and installation of different

equipment parts needed for the wood pellet plant.

The capital recovery factor was calculated using the

following formula:

CRF ¼ ið1þ iÞnð1þ iÞn�1

(2)

where i is the interest rate (decimal) and n is the utilization

period in years.

In this study an interest rate of 7% was considered for the

CRF calculation.

Service andmaintenance costs for the different units of the

wood pellet plant were calculated as a percent of the invest-

ment costs. Thek and Obernberger [8] and Mani [12] suggested

average maintenance values, taken into consideration wear

and tear of machinery parts.

The operating costs were related to the manufacturing

process such as cost of the rawmaterial, heat costs for drying,

electricity consumption costs and personnel costs.

b i om a s s a n d b i o e n e r g y 3 5 ( 2 0 1 1 ) 1 3 5 7e1 3 6 6 1359

The different parameters taken into consideration in this

paper for the calculation of the different costs involved in the

wood pellet production are summarized in Table 1.

2.3. System boundaries

Generally, a typical wood pellets supply chain has three main

components: Raw material supply, Pellet operation and wood

Table 1eGeneral parameters for the calculation of capitaland operating costs.

Parameters Key factors

General data � Electricity costs

� Interest rate

� Utilization period of all

plant units

General investment � Land use, General construction

costs, Office building, Access

roads, Electric installation,

Engineering, Raw material

storage, Pellets storage

� Service and maintenance

costs (S&M)

Raw material � Type

� Water content

� Raw material cost

Wood pellets � Production rate

� Annual production

� Water content

� Bulk density

Plant operation � Plant capacity

� Annual utilization period

� Simultaneity factor

� Annual operating hours

Personnel � Monthly rates

� Number of plant staff

� Number of administration staff

� Number of management staff

Drying � Water evaporation rate

� Heat demand for drying

� Investment costs of dryer

and solid fuel burner

� S&M costs

Grinding � Type and Milling capacity

� Investment costs

� Electric power required

� S&M costs

Pellet mill þ conditioning � Type

� Mill capacity

� Investment costs

� Electric power required

� S&M costs

Cooling � Type

� Capacity

� Electric power required

� S&M costs

Miscellaneous equipment � Investment costs: Sieving

machine, Conveyor belts,

Screw conveyor, Bucket

conveyor, Cell fans, etc.

� S&M costs

� Electrical power required

Biomass handling � Fuel consumption

� Investment costs

� S&M costs

pellets logistics (Fig. 2). In this study, the cost assessment and

energy consumption was limited to the pelleting operation

phase. Therefore, the different costs and energy consumption

were computed from the feedstock handling operation until

the intermediate storage of wood pellets situated within the

pellet plant.

The energy input associated with raw material handling

in sawmills and the transport of raw material from sawmills

to the pellet plant were not taken into consideration for

calculation of energy consumption. The total energy used in

the pellet operation process was determined by the fuel

consumption of the wheel loader in the raw material

handling step and the different downstream energy inputs

along the pellet operation phase.

2.4. Energy consumption assessment

The total energy input of the pelleting operation phase was

classified according their primary energy source: electrical

energy, heat energy, and fuel energy. The total electrical

energy consumed corresponded to the electricity required by

the hammer mill, dryer motor, pellet mill, cooler and miscel-

laneous equipment. A simultaneity factor of 85%, which

considers the fact that not all electrical installations operate

on full load at the same timewas considered [8]. The total heat

energy input was determined by the total heat required to

evaporatewater (ev.w.) from the rawmaterial. The total diesel

fuel energy consumed was calculated by multiplying the high

heating value (HHV) of diesel fuel of 38.6 MJ/l [13] by the

annual consumption of diesel fuel (liters/year).

The total energy consumptionwas calculated as the sumof

the different energy inputs into the pelleting operation and

calculated in GJ/year. The specific energy consumption was

determined in MJ/Mgpellets.

2.5. Scenarios

Wood pellet production costs and energy consumption were

calculated for different scenarios. The main differences

between the different scenarios are described in Table 2.

2.6. Data collection

A close assessment of the different processes involved in the

wood pellet production was investigated. In order to calculate

the different costs and energy consumption, generic data

sourced from literature as well as collected data, during 2009,

from written and verbal communications with different

manufacturers in Europe and in Argentina were used.

2.6.1. Data input assumptions

2.6.1.1. General investment. The general investment included

all the costs related to the plant construction buildings, land

acquisition, office buildings, road access, electricity connec-

tions, control systems, engineering, dry biomass storage,

montage of different plant components and intermediate

pellet storage. For scenarios 1 and 2 general investment costs

accounted for 1,554,300 € and for scenarios 3 and 4 were

1,924,000 €. For all scenarios, service and maintenance costs

Raw materialsupply

Sawmill residuesForest harvest residues;Roundwood of low quality Energy forests: Eucalyptus, SRC

Pelleting operation

Comminution

Screening

Drying

Grinding

Conditioning and Pelletizing

Cooling

Intermediate Storage

End user Power plants (Electricity and Heat)

Feedstock handling and storage

Harbor storage and operations in

exporting country

Local inland transport Train Barges

Harbor unloading facility

Harbor bulk storage

Vessel loading

International shipmentInternational transport

Harbor operations and local transport in

importing country

Pel

let

logi

stic

s

Truck

Harbor unloading facility

Train Barges Truck

Fuel

Electricity

Electricity

Electricity + Heat

Electricity

Electricity

Electricity

TransportTransport

Transport

Fig. 2 e Flow chart of a typical international wood pellet supply chain showing the study boundaries for the wood pellet

production costs and energy consumption assessment.

b i om a s s an d b i o e n e r g y 3 5 ( 2 0 1 1 ) 1 3 5 7e1 3 6 61360

were 2% of the investment costs and utilization period was

25 years [12,14].

2.6.1.2. Plant operation. For scenarios 1 and 2 thewood pellets

production rate considered was 3 Mg/h, while for scenarios

3 and 4 the production rate was 6 Mg/h. The final moisture

content (MC) of the wood pellets was assumed to be 10%. The

annual utilization period, which considers scheduled and

unscheduled shutdowns, was assumed to be 85%. This means

that the plant operates 24 h/day for 328 days. The annual

production capacity for scenarios 1e2 was 22.338 Mg and for

scenarios 3e4was 44.676Mg. The price for electricity assumed

was 27 €/MWh [15].

2.6.1.3. Personnel. Personnel costs were divided into different

type of labor within the pellet plant and based on monthly

salaries. The different labor types were plant staff (700 €/

month), administration staff (800 €/month) and management

staff (2000 €/month). For scenarios 1 and 2 the total personnel

was assumed to be 8, 2 and 1 for plant staff, administration

Table 2 e Main differences in framework conditions for the different scenarios.

Parameter Scenario 1 Scenario 2 Scenario 3 Scenario 4

Proportion of raw material input (%) 100% wet

sawdust

50% wet sawdust;

50% wood shavings

100% wet

sawdust

50% wet sawdust;

50% wood shavings

Pellets production rate t/h a 3 3 6 6

Annual operating hours 7884 7884 7884 7884

Annual pellet production t/p.a.b 23652 23652 47304 47304

a Refers to metric tons per hour.

b Refers to metric tons per annum.

b i om a s s a n d b i o e n e r g y 3 5 ( 2 0 1 1 ) 1 3 5 7e1 3 6 6 1361

andmanagement, respectively. For scenarios 3 and 4 the total

personnel assumed was 11, 2 and 1 for plant staff, adminis-

tration and management, respectively.

2.6.1.4. Raw material. The raw material assumed for pellets

production was coniferous (P. elliotii and P. taeda) sawdust and

shavings. Regarding the raw material bulk density, Bois [16]

reported a sawdust density of approximately 260 kg/m3 for

southern states pines at an average MC of 50%. Similarly, [8]

based their economical calculation for wood pellet produc-

tion with a sawdust density of 267 kg/m3 and 55% MC and

wood shavings density of 78 kg/m3 (MC 10%). In this study,

a sawdust bulk density of 260 kg/m3 with a MC of 55% and

wood shavings density of 80 kg/m3 at 10% MC was assumed.

The average raw material price were based on loco pellet

plant yard and included an average transport distance of

30 km from sawmills to the pellet plant. The raw material

prices for our base calculations were 8 €/Mg and 12 €/Mg for

sawdust and shavings, respectively [17,18].

2.6.1.5. Raw material drying. The drying system used in this

study is a drum dryer. A solid fuel burner was proposed as the

generator of heating medium (flue gases). The flue gases used

as a heating medium were produced by direct burning of wet

sawdust with identically characteristics as described above.

The investment costs of the solid fuel burner and the drum

dryer varied according to the amount of raw material to be

dried. Investment costs for the solid fuel burner in scenarios

1 and 4 were 90,000 €, for scenario 2 was 65,000 € and for

scenario 141, 400 €. The utilization period assumed was 10

years and the maintenance costs were 2% of the annual

capital costs. The dryer costs assumed in scenario 1 and 4

were 502,000 €, for scenario 2 was 250,000 € and for scenario

3 was 770,000 €. In all dryers a utilization period of 15 years

and maintenance costs of 2.5% of the investment costs were

assumed [8,19].

The total operating costs for drying included the electricity

consumption (drum dryer motor, fuel feed fun of the solid

burner and the dryer downstream fun) and the raw material

(sawdust) required to generate the necessary heat to evapo-

rate water. For scenarios 1 and 4 a power requirement of

172 kW was assumed; for scenario 2, a power requirement of

141 kWand for scenario 3 a power requirement of 280 kW. The

heat required to evaporate 1 Mg of water was assumed to be

1000 KWh or 3600 MJ (including 10% heat lost during conver-

sion) [8]. The heating value of wet sawdust used in this study

was 12 MJ/kg [20,21]. Therefore, the amount of sawdust

needed to generate the heating medium was 300 kg/Mgev.w.

2.6.1.6. Grinding, pelletization, conditioning and cooling.Ahammermill was assumed for fine grinding of biomass prior

to conditioning. Investment costs and electricity requirement

varied depending on the capacity of the hammer mill. For

scenario 1, a hammer mill with an electricity required power

of 110 kW and investment cost of 85,000 € was assumed. For

scenario 2, two hammermills with a required electrical power

of 55 kW each and total investment costs of 90,000 € were

considered. For scenarios 3 and 4, two hammer mills for each

scenario were assumed with a required electrical power of

110 kW each hammer mill and total investment costs of

170,000 €. In all scenarios a utilization period of 10 years and

maintenance of 18% of the investment costs were assumed

[8,22].

Conditioning was assumed to be done by high pressure

water and the electricity power required was 30 kW. The

investment cost of the conditioner was included in the total

investment costs of the pellet mill (200,000 €). Scenarios with

pellets production rate of 3 Mg/h were assumed to have

1 pellet mill and scenarios with pellets production rate of

6 Mg/h were assumed to have 2 pellet mills. The electricity

power requirement per pellet mill was 260 kW, including

power requirement for conditioning [23]. The utilization

period was 10 years and service and maintenance costs were

10% from the investment costs [8].

Cooling of wood pellets was a counter flow cooler with

capacities according to production rates. The cooler required

electric power assumed was 18 kW for scenario 1 and 2 while

for scenarios 3 and 4 was 30 kW. The assumed investment

costs for the cooler system in scenarios 1 and 2 was 20,000 €

and for scenarios 3 and 4 was 28,000 € [22]. The utilization

period was 15 years and the maintenance costs were 2% of

investment costs [8].

2.6.1.7. Miscellaneous equipment. Miscellaneous equipment

assumed all investment costs for bucket conveyors, screw

conveyors, conveyor belts, feeding screws, fans and sieving

machine. For scenarios 1 and 2 the assumed investment costs

were 195,000 € and for scenarios 3 and 4 were 250,000 €. In all

scenarios the utilization periodwas 10 years andmaintenance

costs were 2% of the investment costs. Thek and Obernberger

[8] reported that the electrical power required of miscella-

neous equipment for a production rate of 3 Mg/h was 90 kW.

For an annual pellet production of 6 Mg/h an electricity

requirement of 115 kW was assumed [24].

2.6.1.8. Raw material handling. Biomass handling operation

was assumed to be done with a front wheel loader and the

Table 3 e Total annual costs for the different scenarios.

Different costs Scenario 1 Scenario 2 Scenario 3 Scenario 4

Annual capital costs €/p.a. 286.055 255.540 403.835 367.092

Maintenance costs €/p.a. 87.030 81.130 138.718 130.990

Operating costs €/p.a. 675.509 598.730 1.222.072 1.060.653

Total production costs €/p.a. 1.048.594 935.399 1.764.625 1.558.735

b i om a s s an d b i o e n e r g y 3 5 ( 2 0 1 1 ) 1 3 5 7e1 3 6 61362

assumed investment costs was 100,000 € [25]. Maintenance

costs were 2% of the investment costs and utilization period

considered was 10 years. The operating costs of biomass

handling included diesel fuel consumption costs. The average

fuel consumption of a wheel loader with a power of 140 HP

and with a moderate utilization is approximately 15 l/h (liters

per hour). However, when the wheel loader is highly utilized

the diesel fuel consumption average is 20 l/h [26]. Therefore,

for scenarios 1 and 2 a diesel fuel consumption of 15 l/h was

assumed and for scenarios 3 and 4 a consumption of 20 l/h

was considered.

2.7. Sensitivity analysis

Asensitivity analysis for each scenariowas carried out in order

to assess the effect of the main cost factors on the total

production costs. The main costs factors that were analyzed

were the raw material and electricity price. On one hand, the

sensitivity analysis of raw material price was performed by

increasing its cost by 50 and 100% due to the fact that some

regions might experience high competition for biomass sour-

ces. However, large-scale sawmills and several small sawmills

organized under cooperatives have access to their own raw

material source. Therefore, the price was decreased by 100%.

On the other hand, the energy production in Argentina

is partially subsidized by the government. However, the

tendency is that the state will gradually take off subsides

from the electricity sector. Therefore, a sensitivity analysis

of electricity price was carried out by increasing its price by

50% (40.5 €/MWh).

41,9

11,4

3,9

30,226,8

46,9

12,8

3,6

0

5

10

15

20

25

30

35

40

45

50

Scenario 1 Scenario 2

Sp

ecific co

sts €/M

g p

ellets

Total specific costs Maintenance costs

Fig. 3 e Specific costs of wood pell

3. Results

3.1. Production costs

Regarding total production costs between scenarios 1 and 2,

scenario 2 showed a lower total production costs compared to

scenario 1 (Table 3). However, the variation of the different

costs was not significant between scenarios 1 and 2. Scenarios

3 and 4 showedhigher production costs compared to scenarios

1 and 2, as production rate was higher (6 Mg/h). Between

scenarios with production rate of 6 Mg/h, Scenario 4 showed

the lower annual production costs compared to scenario 3.

Although, the total annual production costs increasedwith

an increment in production (scenarios 3 and 4), they showed

lower total specific costs (€/Mgpellets) compared to scenarios

1 and 2 (Fig. 4). The lowest total specific cost was observed in

scenario 4 (34.9 €/Mgpellets). On the contrary, scenario

1 showed the highest specific costs with 46.9 €/Mgpellets. In

general, it was observed that when the annual wood pellets

production rate increased (scenarios 3 and 4) the specific

production costs decreased.

In general, specific maintenance costs showed slight

differences between the different scenarios. For scenarios

with production rates of 3 Mg/h, the lower specific operating

costs were found in scenario 2 with 26.8 €/Mgpellets (Fig. 3).

Scenario 4 showed the lowest specific operation costs with

23.7 €/Mgpellets considering a production rate of 6 Mg/h.

Regarding the specific contribution of the main parame-

ters used for the costs calculation, raw material was the

39,5

34,9

9,0 8,2

27,423,7

3,1 2,9

Scenario 3 Scenario 4

Annual capital costs Operating costs

ets for the different scenarios.

40413334

1812 13

16

101591410

11 129

7698

76986554

3 454

0

20

40

60

80

100

120

Scenario 1 Scenario 2 Scenario 3 Scenario 4

Ma

in c

os

ts

dis

trib

utio

n %

Raw material for pellets General investment DryingPellet mill Personnel Raw material handling Grinding Miscellaneous equipment

Fig. 4 e Percentage distribution of different costs factors per Mg pellets.

b i om a s s a n d b i o e n e r g y 3 5 ( 2 0 1 1 ) 1 3 5 7e1 3 6 6 1363

dominant costs factor in the four scenarios, representing

between 33 and 41% of the total specific costs (Fig. 4). General

investments costs were the second largest costs, followed by

drying costs for scenarios 1, 2 and 4. Scenario 3 showed

higher drying costs than general investment costs. In general,

the lowest costs were observed for grinding, miscellaneous

equipment, cooling and biomass fuel burner with an average

of 5%, 4%, 1% and 1%, respectively. In the four scenarios

palletizing was the fourth most important cost.

It should be noted that general investment costs decreased

when production rate increased (scenario 3 and 4). The same

effect was observed for personnel costs. Biomass handling

equipment and miscellaneous equipment changed not sig-

nificantly in the cost distribution between the scenarios.

3.2. Energy consumption

Scenario 2 showed the lowest total primary energy con-

sumptionwith 58,623 GJ/year (Table 4). Therewas a significant

difference of the total energy consumed between scenarios

with the same annual pellets output. Themain difference was

observed in the total heat energy consumed. Electrical and

diesel energy did not vary significantly between scenarios of

the same production rate.

Table 4 e Total annual energy consumption of thedifferent scenarios in GJ/year.

Energy source Scenario1

Scenario2

Scenario3

Scenario4

Electrical energy 14.810 14.104 26.544 24.084

Heat energy 80.417 40.208 160.834 80.417

Diesel energy 4.311 4.311 5.748 5.748

Total GJ/p.a. 99.538 58.623 193.126 110.249

The highest specific energy consumption was observed in

scenarios 1 and 3 with 4456 and 4323 MJ/Mgpellets, respectively

(Fig. 5). Scenarios 2 and 4 showed the lowest specific energy

consumption, as less heat energy was consumed.

3.3. Sensitivity analysis

Table 5 shows the specific costs (€/Mgpellets) when electricity

price was not modified, but modifying the price of raw

material.When decreasing the rawmaterial price by 100%, the

specific pellet costs may decrease close to 40% in scenarios

1 and 2, while more than 40% in scenarios 3 and 4. Assuming

an increment of 50% on the rawmaterial price, scenarios 1and

2 showed a cost increment of almost 20 and 18%, respectively.

The highest specific costs when raw material increased 100%

were observed in scenario 1 (65.3 €/Mgpellets). The specific cost

for scenarios 2 and 3 did not differ significantly when raw

material increased 100%.

The simultaneous effect of electricity and raw material

increments on the specific costs is shown in Fig. 6. Although

electricity price increased, specific production costs decrease

when raw material price decreased by 100%. When raw

material increased by 50%, no significant differences on

specific production costs were observed for scenarios 2 and 3.

The highest specific costs were observed in scenario 1 when

raw material price increased by 100%. On contrary, the lower

production cost was observed in scenario 4when rawmaterial

price decline by 100%.

4. Discussion

In general, the specific costs of wood pellets for the different

scenarios showed relative lower costs comparing to the

ones reported in other studies. Thek and Obernberger [8],

663 631 594 539

3.600 3.600

4.456

2.624 2.468

1.800 1.800

129 129 193 193

4.323

0

500

1.000

1.500

2.000

2.500

3.000

3.500

4.000

4.500

5.000

Scenario 1 Scenario 2 Scenario 3 Scenario 4

En

erg

y c

on

su

mp

tio

n M

J/M

g p

elle

ts

Electrical energy Heat energy Diesel energy Total

Fig. 5 e Specific energy consumption of the different scenarios.

b i om a s s an d b i o e n e r g y 3 5 ( 2 0 1 1 ) 1 3 5 7e1 3 6 61364

accounted for 90.7 €/Mgpellets under Austrian framework

conditions. Specific wood pellets production costs under

Swedish framework conditions was 62 €/Mgpellets [27]. Mani

[12] reported a specific pellet production cost of 40 €/Mgpelletsfor an annual pellet production of 45,000 Mgpellets, which is

comparable in this study to the specific costs of scenario 3.

Although some regions may have potential availability of

raw material for wood pellet production, the production costs

need to be assessed in a specific basis for each region. At the

moment, there are occurring a few international wood pellet

trade flows [7] and an extrapolation of pellet production costs

from one region to the other may reflect unclear and unrep-

resentative data.

Thek and Obernberger [8] showed a negative correlation

between pellet production rate and specific pellet production

costs, meaning that lower production rate attended to reach

higher specific costs. Also in our study, scenarios 1 and 2

(production rate of 3 Mg/h) showed higher specific costs than

the scenarios with 6 Mg/h (scenarios 3 and 4). An increment

in pellet production rate decreases substantially the specific

pellet production costs due to the economies of scale for larger

pellet plants [12].

The raw material costs represented the main cost factor in

the calculation of the total pellets production costs. The costs

of raw material may have a contribution on the total costs of

about 40% or higher depending on biomass price [8,12].

However, the most important variable is whether the raw

Table 5 e Effect raw material price on the specific costs of woo

Raw material price variations Scenario 1 S

€/t pellets % €/t p

Base calculation 46.9 4

100% Raw material price decline 28.5 �39 2

50% Raw material price increment 56.1 20 4

100% Raw material price increment 65.3 39 5

material used is dry or wet. Although dry rawmaterial is more

expensive than wet raw materials, total production costs can

be significantly reduced due to the fact that no drying is

needed [8]. In our study, a lower specific production cost was

observed when 50% of the raw material input was wood

shavings. Although lower specific costs could be attained

when using wood shavings its availability may be the most

limiting factor in achieving lower production costs.

Pelletization is also a major costs component on the total

pellet production. Besides its high electricity consumption,

high maintenance costs should be expected due to wear of

rollers and dies.

Mani [12] reported that personnel costs represented 25% of

the total pellet cost distribution. Thek and Obernberger [8]

showed values of 13% for personnel costs. In this study, the

costs of personnel were lower than 12%. The main reason is

the lower salary rate compared to other countries and

different number of personnel employed.

All the scenarios showed differences in investment costs.

However, the observed differences were minimal for scen-

arios of the same production capacity. The quantity of raw

material to be dried varied according to the proportion of

feedstock input. Therefore, investment costs variations

between scenarios of the same production rate depended

mostly by different dryer capacities. The variation of total

investment costs between scenarioswith different production

rate was mainly due to additional pellet mills, larger drying

d pellets.

cenario 2 Scenario 3 Scenario 4

ellets % €/t pellets % €/t pellets %

1.9 39,5 34.9

6.7 �36 21,1 �47 19.7 �44

9.5 18 48,7 23 42,5 22

7.3 37 57,9 47 50.1 44

29

67,8

59,4 60,152,1

21,723,331

44,5

58,650,951,8

0

10

20

30

40

50

60

70

80

Scenario 1 Scenario 2 Scenario 3 Scenario 4

Sp

ecific co

sts €/M

g p

ellets

100% Raw material price decline 50% Raw material price increment100% Raw material price increment

Fig. 6 e Specific costs changes for different raw material prices at 50% electricity increment.

b i om a s s a n d b i o e n e r g y 3 5 ( 2 0 1 1 ) 1 3 5 7e1 3 6 6 1365

size and additional grinding units for scenarios with 6 Mg/h

production rate.

Drum dryers may use hot water or steam as heating

medium. However, if there is no source of such heating

medium, flue gases from direct burning of biomass appears as

the best option. If steamcanbe purchased from industrieswith

steam surplus, drying costs may be reduced. Moreover, the

drying consumption costs can be reduced significantly if

a superheated steam dryer is applied, due to its heat recovery

potential. However, higher investment costs should be expec-

ted [8].

The observeddifferences of the electrical energy consumed

among different scenarios were mainly due to additional

energy inputs in raw material grinding and drying. The total

annual electricity consumption was higher in scenarios with

production capacity of 6Mg/h.However, the specific electricity

consumption per metric ton of pellets was lower than for

scenarios 1 and 2.

From all the scenarios, lower heat energy consumption

was observed in scenarios that have a mixed raw material

input (sawdust and wood shaving). The reason is merely

because wood shavings do not need to be dried before

entering the pellet line. Similarly, Mani [28] found that lower

heat energy was required for a pellet system that used both,

sawdust and wood shavings as raw material input.

In our study, it was observed that the most promising

frameworkcondition forNortheastArgentina, in termsof costs

effectiveness and energy consumption could be acquired with

production rates of 6Mg/hwith sawdust andwood shavings as

rawmaterial. However, it should be noted that a simultaneous

increment of the electricity by 50% and raw material price by

100%, may increase the specific costs up to 50%.

At the moment, Argentina has not developed a significant

market for wood pellets. The main reason is that the utiliza-

tion of fossil fuels, such as natural gas and fuel oil, are

partially subsidized by the state and wood pellets cannot

compete with fossil fuel prices. Therefore, the production of

wood pellets at the moment should be oriented toward

exportation and probably being Belgium, the Netherlands and

Sweden as main importing countries. Within this context,

production costs shown to be competitive in comparison to

other countries. However, if wood pellets are assumed to be

exported to the European market, further costs such as long

distances inland transport, port fees, export tariffs and

international shipment should be taken into consideration as

they may negatively impact the economic feasibility of

a project in terms of total costs.

For long distance bioenergy supply chains, long distance

transportation may be required, implying extra energy

expenditures. Therefore, energy consumption of the entire

supply chain should be assessed in order to determine the

total energy input. Furthermore, the overall energy balance of

the total operation needs to be positive [7]. As a consequence,

further studies should account for the entire different costs

and energy consumption present in an international wood

pellet supply chain.

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