A model of Regulatory Impact Analysis (RIA) of incentives for the production of biomass energy
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This study investigates the potential for using biomass for the production of electricity in Georgia. The volume, important characteristics, and delivered costs per unit of energy are estimated for various locally produced biomass. Production of synthetic fuels using both pyrolysis and gasification technologies is investigated as potential means for converting biomass into electricity. Capital and operating costs for each of these two technologies are projected across three different scales of production. Estimated costs per unit of electricity generated are determined. It appears, under the conditions modeled, these technologies are not cost competitive with currently used technologies. Significant subsidies would be needed to induce the adoption of these technologies under current economic conditions.
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Several studies have evaluated agriculture waste based cellulosic biomass costs and identified ways that costs can be optimized. However, most of the existing models have focused on optimizing a single component of biomass cost, using an integrated biomass transportation model. While separate studies have provided a model on farmer supply response and participation (market structure), there is a gap in understanding the linkages between biomass transport cost, farmer supply response, and farmer incentives. This study bridges this gap. A biomass cost model is developed that intricately links the relationship between these variables. Further, it allows a holistic evaluation of trade-offs between biomass transport cost, incentive to farmers, farmer participation, biorefinery size, and alternative feedstock availability. Managers who focus on minimizing biomass cost through optimization of transport cost alone, without considering the intricate relationships between biomass transport cost and farmer incentive will ultimately paypay 15 to 20% more for biomass.
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