Residual Biomass Gasification for Small-Scale Decentralized Electricity Production: Business Models for Lower Societal Costs

Abstract

Biomass gasification, a promising sustainable technology for decentralized electricity production, has the potential to displace fossil fuels while valorizing locally produced waste. Previous studies indicate that its technical and financial viabilities vary among projects, and few projects have been successfully developed, despite the sustainability benefits. This study identified and characterized the factors that influence the economic and environmental performances of such projects using a novel, hybrid method, with qualitative analysis using the Business Model Canvas and quantitative life-cycle costs (LCCs) considering the financial and external costs. The financial LCCs and external electricity generation costs were evaluated for business models in agro-industrial factories using proprietary residual biomasses and for those in isolated grids using local agricultural waste. The business models used for biomass gasification projects affect their LCCs and externalities more than factors such as their investment costs and energy efficiencies. The relationship between the business models, the financial performances of the projects, and their impacts on society are highlighted, showing that although projects using proprietary biomass waste have lower financial costs, off-grid projects generate more positive externalities, resulting in lower costs for society. These results indicate that policy support focused on appropriate business models may contribute to optimizing the use of financial incentives to foster investment in new sustainable technologies, contributing to the energy transition.