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Feasibility study on the production and consumption of wood pellets in Iran to meet return-on-investment and greenhouse gas emissions targets

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  • Nabavi, Vahid
  • Azizi, Majid
  • Tarmian, Asghar
  • Ray, Charles David

Abstract

At the Paris Agreement in 2015, Iran pledged a 4% reduction in greenhouse gas emissions by 2030 and bio-fuels like wood pellet are an option. To estimate the volume of waste woody biomass the International Energy Agency model was employed and results show that a total opportunity of 754,840 m3 of woody by-products. An economic feasibility study of wood pellet production was performed by calculating the economic indices and analyzing their sensitivity using COMFAR III software for three scenarios in annual capacities of 48,000, 75,000 and 120,000 tons. The costs of wood pellet production for each plan are 104.29, 107.63, and 106.92 €/Mt, respectively. Acceptable IRR (45%–124%) and NPV (7–14 Million Euro) support the feasibility of wood pellet production in Iran. Standard VDI 2067 used to calculate specific cost of generating energy with wood pellet fuel against domestic water boilers using diesel and natural gas fuels. Results showed that the cost of generating energy is higher by wood pellet (43.5 €/Mwh, against gasoline, 25.9 €/Mw, and natural gas, 22.3 €/Mwh) due to the high initial investment in the wood pellet-fired boilers compared to established fossil fuels and the low price of diesel and natural gas in Iran.

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  • Nabavi, Vahid & Azizi, Majid & Tarmian, Asghar & Ray, Charles David, 2020. "Feasibility study on the production and consumption of wood pellets in Iran to meet return-on-investment and greenhouse gas emissions targets," Renewable Energy, Elsevier, vol. 151(C), pages 1-20.
    • Handle: RePEc:eee:renene:v:151:y:2020:i:c:p:1-20
    DOI: 10.1016/j.renene.2019.10.140
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