Improving physical flows in biomass-to-energy supply chains by means of pre-treatment technology and coordination

Abstract The transition from fossil fuel to renewable energy sources such as biomass-to-energy (B2E) is an environmentally sustainable pathway. However, increased use of biomass is hampered by the high costs of logistics activities within the physical flow. There are several approaches for improving the physical flow, and in this thesis pre-treatment technology and coordination of activities have been explored. The purpose of this thesis is: to investigate how pre-treatment technology and coordination can improve the physical flow in B2E supply chains. This thesis consists of a kappa and five appended papers, based on two interview studies; a conceptual study; a techno-economical study and one multiple case study. This thesis is built on three cornerstones; supply chain attributes, pre-treatment technology and coordination, all centred on the physical flow as the unit of analysis. In order to improve the physical flow, the unique attributes of the B2E supply chain in which the flow is embedded need to be understood. Identification of these attributes has been an ongoing activity throughout the entire research process, using literature reviews and interviews as data collection methods. Biomass is a unique type of good for which it is concluded that there are nine distinct attributes in terms of (1) perishability, (2) shape of goods, (3) geographical spread, (4) weather and climate, (5) customer diversity, (6) fluctuations in demand, (7) time gaps between supply and demand, (8) system openness and (9) interorganisational relationships. These determine the configuration of supply chains and the physical flow therein. Also, these attributes serve as a platform for understanding how to make use of pre-treatment technology and coordination of activities to improve the physical flow. This thesis concludes that pre-treatment technology, in this thesis represented by torrefaction, has great potential to improve the physical flow within B2E supply chains, primarily by altering supply chain attributes. In particular, torrefaction alters the shape of goods, which then allows transport across longer distances. However, attributes also shape the ways in which torrefaction is made use of; e.g., variances in geographical spread shape the optimal size of a torrefaction plant. Also, the production strategies of torrefaction plants need to accommodate different end users and their respective distribution system. It is also concluded that in comparison to pre-treatment technology that alters a number of attributes, coordination of activities can primarily reduce the relative importance of B2E supply chain attributes, especially that of the shape of goods, which renders an improved physical flow in terms of higher transport efficiency. Similarly, the relative importance of fluctuations in demand and perishability can be reduced by moving storage downstream to power plants, or by power plants themselves investing in supplementary businesses, e.g. producing pellets. Also, the attributes shape the use of means of coordination; e.g., B2E supply chains are characterised by system openness, and therefore, network connections to other energy producers can be a barrier towards as well as an enabler for various means of coordination.