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Evaluating Economic Alternatives for Wood Energy Supply Based on Stochastic Simulation

Author

Listed:
  • Ulises Flores Hernández

    (Chair of Forest Operations, University of Freiburg, 79085 Freiburg im Breisgau, Germany)

  • Dirk Jaeger

    (Department of Forest Work Science and Engineering, University of Göttingen, 37077 Göttingen, Germany)

  • Jorge Islas Samperio

    (Instituto de Energías Renovables, Universidad Autónoma de México, Temixco Morelos 62580, Mexico)

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/m 3 and 0.75 USD/m 3 for harvesting residues and non-extracted stand residues, respectively. For the central south region, it is estimated that a contribution of 16.53 USD/m 3 from 2013 and a total revenue of 33.00 USD/m 3 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.

Suggested Citation

  • Ulises Flores Hernández & Dirk Jaeger & Jorge Islas Samperio, 2018. "Evaluating Economic Alternatives for Wood Energy Supply Based on Stochastic Simulation," Sustainability, MDPI, vol. 10(4), pages 1-19, April.
    • Handle: RePEc:gam:jsusta:v:10:y:2018:i:4:p:1161-:d:140834
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    References listed on IDEAS

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    1. Zeus Guevara & Oscar Córdoba & Edith X. M. García & Rafael Bouchain, 2017. "The Status and Evolution of Energy Supply and Use in Mexico Prior to the 2014 Energy Reform: An Input-Output Approach †," Economies, MDPI, vol. 5(1), pages 1-17, March.
    2. Strzalka, Rafal & Schneider, Dietrich & Eicker, Ursula, 2017. "Current status of bioenergy technologies in Germany," Renewable and Sustainable Energy Reviews, Elsevier, vol. 72(C), pages 801-820.
    3. Ulises Flores Hernández & Dirk Jaeger & Jorge Islas Samperio, 2017. "Bioenergy Potential and Utilization Costs for the Supply of Forest Woody Biomass for Energetic Use at a Regional Scale in Mexico," Energies, MDPI, vol. 10(8), pages 1-25, August.
    4. Carneiro, Patrícia & Ferreira, Paula, 2012. "The economic, environmental and strategic value of biomass," Renewable Energy, Elsevier, vol. 44(C), pages 17-22.
    5. Sansaniwal, S.K. & Pal, K. & Rosen, M.A. & Tyagi, S.K., 2017. "Recent advances in the development of biomass gasification technology: A comprehensive review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 72(C), pages 363-384.
    6. Shana M. McDermott & Richard B. Howarth & David A. Lutz, 2015. "Biomass Energy and Climate Neutrality: The Case of the Northern Forest," Land Economics, University of Wisconsin Press, vol. 91(2), pages 197-210.
    7. García, Carlos A. & Riegelhaupt, Enrique & Ghilardi, Adrián & Skutsch, Margaret & Islas, Jorge & Manzini, Fabio & Masera, Omar, 2015. "Sustainable bioenergy options for Mexico: GHG mitigation and costs," Renewable and Sustainable Energy Reviews, Elsevier, vol. 43(C), pages 545-552.
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