Stochastic Viability of Second Generation Biofuel Chains: Micro-economic Spatial Modeling in France

Within an overall project to assess the ability of the agricultural sector to contribute to bioenergy production, we set out here to examine the economic and technological viability of a bioenergy facility in an uncertain economic context, using the stochastic viability approach. We consider two viability constraints: the facility demand for lignocellulosic feedstock has to be satisfied each year and the associated supply cost has to be lower than de profitability threshold of the facility. We assess the viability probability of various supplying strategies consisting in contracting a given share of the feedstock demand with perennial dedicated crops at the initial time and then in making up each year with annual dedicated crops or wood. The demand constraints and agricultural prices scenarios over the time horizon are introduced in an agricultural and forest biomass supply model, which in turns determines the supply cost per MWh and computes the viability probabilities of the various contract strategies. A sensibility analysis to agricultural prices at initial time is performed. Results show that when they are around or under the median (of the 1993–2007 prices), the strategy consisting in contracting 100% of the feedstock supply with perennial dedicated crops is the best one.