Forests as a renewable energy resource offers opportunities to boost the bioeconomy, energy security and environmental benefits. This doctoral study aims to analyse the potential expansion of forest biomass based bioenergy production (methanol, Fischer Tropsch biodiesel, CHPs) in Finland. Therefore, a spatially explicit techno-economic Mixed Integer Linear Programming (MILP) model was applied to optimize the potential new bioenergy plant locations by minimizing the full costs of the supply chain with respect to forest resources supply, industrial competition, and energy demand. In addition to optimisation modelling, survey amongst 210 farmers in Poland was conducted to identify key societal parameters that helps to optimize the future production plant locations taking into account of economic, environmental and societal aspects of the bioenergy value chain.
The results of this study provide valuable information to investors and decision makers on geographical energy planning strategy to meet the Finland’s 2020 target of liquid biofuel share in traffic and forest chips consumption in energy generation. The model results include cost-optimal production plant locations, choice of technology, feedstock resource allocation with import options, minimized cost of supply chain, income from by-product sales and CO2 emission savings.. The model parameter sensitivity analysis shown that the investment costs, conversion efficiency and heat price variations were the most plant influential parameters followed by feedstock cost, electricity price, subsidies, and transport cost. These parameter variations under uncertain market conditions favoured by unstable policies would cause serious challenges to promote the use of forest biomass in the future biofuel and CHP industries. Survey analysis identified that farmer’s willingness to supply biomass would play a vital role for secured biomass availability to liquid biofuel and CHP industries. Therefore, formulation of socially inclusive policies are imperative for the future success of bioenergy industries with long-term market stability.