Optimal multi-state partnerships for woody biomass co-firing incorporating a demand-response function for biomass procurement

Abstract

Woody biomass provides an opportunity to reduce carbon emissions from existing power plants via co-firing with coal. However, increased demand for woody biomass in electricity generation could potentially increase the price for biomass procurement. This paper presents an econometric demand response model for biomass procurement prices, which is then integrated into a robust mixed-integer nonlinear programming (MINLP) model. We utilize a two-stage approach to efficiently solve this MINLP. The model is then applied to demonstrate the demand-price relationship and to identify efficient frontiers for optimal state partnerships that achieve aggregated CO2 emission rate targets at minimum aggregate cost, subject to a constraint on the probability of satisfying the desired emission targets.