Comparing the life cycle costs of using harvest residue as feedstock for small- and large-scale bioenergy systems (part II)

•Generation costs for two forest bioenergy systems of different scales are estimated.•Nominal electricity costs are 14.1–28.3 cents/kWh for the small-scale plant.•Nominal electricity costs are 14.9–24.2 cents/kWh for the large-scale plant.•GHG mitigation costs from displacing coal and LPG are $111-$281/tonne of CO2 eq.•High sensitivity to cap. factor (large-scale) and labor requirements (small-scale).

In part II of our two-part study, we estimate the nominal electricity generation and GHG (greenhouse gas) mitigation costs of using harvest residue from a hardwood forest in Ontario, Canada to fuel (1) a small-scale (250 kWe) combined heat and power wood chip gasification unit and (2) a large-scale (211 MWe) coal-fired generating station retrofitted to combust wood pellets. Under favorable operational and regulatory conditions, generation costs are similar: 14.1 and 14.9 cents per kWh (c/kWh) for the small- and large-scale facilities, respectively. However, GHG mitigation costs are considerably higher for the large-scale system: $159/tonne of CO2 eq., compared to $111 for the small-scale counterpart. Generation costs increase substantially under existing conditions, reaching: (1) 25.5 c/kWh for the small-scale system, due to a regulation mandating the continual presence of an operating engineer; and (2) 22.5 c/kWh for the large-scale system due to insufficient biomass supply, which reduces plant capacity factor from 34% to 8%. Limited inflation adjustment (50%) of feed-in tariff rates boosts these costs by 7% to 11%. Results indicate that policy generalizations based on scale require careful consideration of the range of operational/regulatory conditions in the jurisdiction of interest. Further, if GHG mitigation is prioritized, small-scale systems may be more cost-effective.