Economics of electricity and heat production by gasification or flash pyrolysis of short rotation coppice in Flanders (Belgium)

Abstract Short rotation coppice (SRC) seems attractive as an energy crop on degraded land. Gasification and flash pyrolysis are promising technologies for the conversion of SRC into energy or chemicals. A model has been developed to calculate the net present value ( NPV ) of the cash flows generated by an investment in gasification or flash pyrolysis of SRC for the production of electricity or for combined heat and power production. The NPV has been calculated and compared for (combined heat and) power stations with an electrical capacity ( P e ) between 5 MW and 20 MW. Furthermore the minimal amount of heat that has to be sold to make combined heat and power production more profitable than pure electricity production has been determined. By performing Monte Carlo simulations, key variables that influence the NPV have been identified. In the case of small scale SRC conversion, i.e. at an electrical capacity of 5 MW–10 MW, flash pyrolysis is more profitable than gasification. At the smallest scale of 5 MW it is necessary to invest in combined heat and power production, as the sole production of electricity is not profitable at this low scale. At an electrical capacity of 10 MW flash pyrolysis for the sole production of electricity becomes profitable, but gasification for electricity production is still not viable. At this capacity however, the extra investments required in the case of combined heat and power production are already paid back if only 25% of the produced heat can be sold. At a higher capacity of 20 MW, the technology choice becomes unclear taking into account the most uncertain variables, i.e. investment cost parameters and energetic efficiencies.