Optimization of the wood pellet supply during the continued increase of the renewable energy’s proportion in the energy portfolio

The share of renewable energy (RE) in the energy portfolio has been increasing steadily during the past decades. While the trend contributes in lowering the emission of greenhouse gases, it presents new challenges in terms of costs and intermittency. This study evaluates enhanced utilization of biomass energy as a viable solution and presents the mathematical framework for evaluating the costs associated with supplying the required amount of wood pellets. The framework addresses the uncertainty in the future price of pellets, as well as variability in the shipping and storage cost with respect to the supplier and type of facility. A case study based on the latest RE plan of the Korean government shows how the costs and net CO(2) emission can change when the biomass energy is used to provide energy during the intermittency caused by the RE technologies. The results of the study suggest that a substantial difference in costs can occur depending on the supply strategy and that the biomass energy has the potential to resolve the intermittency issue while realizing the South Korean RE plan.