Evaluating economic alternatives for wood energy supply based on stochastic simulation

Abstract

Productive forests, as a major source of biomass, represent an important pre-requisite for the development of a bio-economy. In this respect, assessments of biomass availability, efficiency of forest management, forest operations, and economic feasibility are essential. This is certainly the case for Mexico, a country with an increasing energy demand and a considerable potential for sustainable forest utilization. Hence, this paper focuses on analyzing economic alternatives for the Mexican bioenergy supply based on the costs and revenues of utilizing woody biomass residues. With a regional spatial approach, harvesting and transportation costs of utilizing selected biomass residues were stochastically calculated using Monte Carlo simulations. A sensitivity analysis of percentage variation of the most probable estimate in relation to the parameters price and cost for one alternative using net future analysis was conducted. Based on the results for the northern region, a 10% reduction of the transportation cost would reduce overall supply cost, resulting in a total revenue of 13.69 USD/m3 and 0.75 USD/m3 for harvesting residues and non-extracted stand residues, respectively. For the central south region, it is estimated that a contribution of 16.53 USD/m3 from 2013 and a total revenue of 33.00 USD/m3 in 2030 from sawmill residues will improve the value chain. The given approach and outputs provide the basis for the decision-making process regarding forest utilization towards energy generation based on economic indicators.