Profitability Evaluation of Combined Heat and Power Business by Pyrolysis Gasification of Wood Pellet: Case Study in Hokkaido Considering Uncertainty

Pmfitability of woody biomass Feed-in Tariff business was verified for a total power generation output of 1,815 kW, which introduced multiple pyrolysis gasification and CHP units. Various simulations were conducted in consideration of uncertainties such as operation time, and the conditions for establishing a business and the possibility of improving profitability were examined. The simulation results revealed the following. Under the baseline conditions of pellet unit price of 25 JPY/kg and annual operation time of 7,632 hours/year, good profitability can be obtained from the power generation business alone. The influence on the payback period is dominated by the pellet unit price and the annual operation time, and the influence of other uncertainty factors is small compared to them. Considering the risk of a decrease in plant operation time, pellets must be procured at about 30 JPY/kg or less in order to obtain profitability in the power generation business alone. By implementing the scenario of thermal energy sale, the profitability of the business will be improved, and the requirements for the pellet unit price and the annual operation time will be relaxed. Therefore, it is necessary to actively consider a heat supply business in cooperation with the region.