Economic analysis of biomass power generation schemes under renewable energy initiative with Renewable Portfolio Standards (RPS) in Korea

• Published in: Bioresource technology 2011-10, Vol.102 (20), p.9550-9557
• Main Authors: Moon, Ji-Hong, Lee, Jeung-Woo, Lee, Uen-Do
• Format: Article
• Language: English
• Subjects: Biological and medical sciences; Biomass; Biomass combustion; Biomass gasification; Combustion; Conservation of Energy Resources - economics; Cost engineering; Costs and Cost Analysis; Economic feasibility; Economics; electricity; Feasibility Studies; fuels; Fundamental and applied biological sciences. Psychology; Gasification; heat; infrastructure; Models, Economic; Power generation; prices; renewable energy sources; Renewable Portfolio Standards (RPS); Republic of Korea; Sales; steam; systems analysis; turbines
• ISSN: 0960-8524; 1873-2976
• DOI: 10.1016/j.biortech.2011.07.041

► We analyze economic feasibilities of two strategies of biomass use in Korea. ► Direct combustion–steam turbine and gasification–gas engine were investigated. ► Gasification system is more profitable than combustion system in smaller facilities. ► Biomass gasification CHP plants ranging from 0.5 to 5MWe are suitable in Korea. An economic analysis of biomass power generation was conducted. Two key technologies—direct combustion with a steam turbine and gasification with a syngas engine—were mainly examined. In view of the present domestic biomass infrastructure of Korea, a small and distributed power generation system ranging from 0.5 to 5MWe was considered. It was found that gasification with a syngas engine becomes more economically feasible as the plant size decreases. Changes in the economic feasibilities with and without RPS or heat sales were also investigated. A sensitivity analysis of each system was conducted for representative parameters. Regarding the cost of electricity generation, electrical efficiency and fuel cost significantly affect both direct combustion and gasification systems. Regarding the internal rate of return (IRR), the heat sales price becomes important for obtaining a higher IRR, followed by power generation capacity and electrical efficiency.