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Case Study - Biomass Conversion Planning
A large electric utility was governmentally required to convert coal-fired generation to biomass. The scale of the proposed conversion was unprecedented in North America, making it an even more complex undertaking. Norbridge assisted the client in developing its business case for the conversion, including assessments of biomass sourcing options, biomass transportation options, and biomass logistics requirements to support this conversion to a renewable fuel.

Norbridge took a holistic approach to understanding the client's options and the potential costs. Since the suppliers and biomass supply chain do not exist today, Norbridge employed an iterative process to develop a full understanding of implementable options. Different combinations of biomass type, source location, transportation mode, and storage/handling option could lead to vastly different total delivered fuel cost. The team conducted interviews with more than 60 people at companies across the supply chain and validated costs through Norbridge-proprietary sources.

Through this process we identified a number of important trade-offs. For biomass pellet sourcing, this included the size of the pellet plants vs. the transportation cost required to provide the raw fiber supply, the siting of pellet plant locations between fiber source and client generation stations, and the advantages and drawbacks of different types of biomass material. Biomass transportation trade-offs included the impact of different modes on inventory levels and storage facility requirements (particularly for water service, which is closed during the winter in the region) and the extent of new equipment requirements by mode. Storage and logistics trade-offs included flat storage vs. silos and required dust control and fire suppression systems.

The findings were incorporated into a financial model to determine the total delivered cost of more than 65 potential biomass supply chain options.

Value Added
This project required a different approach than a typical utility fuels sourcing project. It required determining a potential supply chain where none existed on the scale required. Norbridge's industry knowledge of fuels and transportation/logistics and our relationships with many companies in the potential supply chains were critical to obtaining the participation necessary to successfully identify potential supply chain options and their costs. This approach also increased the probability that the optimal solution could actually be implemented in the real world.
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