Bioenergy potential from wood residuals in Alberta: a positive mathematical programming approach

A major risk for many existing and planned wood-based bioenergy facilities is the uncertainty regarding future feedstock supply. Many bioenergy projects use waste generated from primary sectors such as lumber, and, therefore, carry the inherent risk of supply fluctuations if these industries change. To assess the long-term viability of a wood-based bioenergy facility, it is necessary to understand how biomass feedstock fluctuates with other sectors and at what cost supply can be made available. We address these issues by constructing a positive mathematical programming (PMP) model of the Alberta forest sector that focuses on optimizing fibre transfer routes. Through the use of PMP, we derive a marginal cost function for harvesting and hauling fibre to each processing facility. The results indicate that woody residual supply is quite sensitive to market conditions in the primary sector. For the most part, to support bioenergy expansion, feedstock will need to be sourced from the forest, as very few surplus mill residues are available even at high lumber prices. However, we estimate the marginal cost of delivering harvesting residues to be significant, which suggests that policy support will be needed for further bioenergy development.