As renewable energy and renewable product demands grow, creative locations for biomass conversion facilities are evolving to allow for unique comparative advantage opportunities such as co-location synergies with pre-existing facilities and access into particular demand markets or by-product offtake markets. Moreover, dedicated energy crops can be very geographically concentrated and sometimes these unique facility opportunities do not always afford the luxury of being in the center of the bioshed. When the biomass conversion facility is not located in direct proximity with the biomass feedstock, intermediate transportation hubs can, in certain circumstances, be feasible methods for accessing far reaching locations. In some instances, a cost-effective biomass supply chain can be achieved by aggregating the bioshed’s feedstock at a central hub and identifying least-cost transportation opportunities for long hauls to other facilities.
In a previous blog, I touched on some of the challenges created by trying to move low bulk density material. These challenges become compounded by each additional mile that the material is hauled. Consequently, some form densification is oftentimes required for long hauls. Some of the work done at Genera Energy has led to advances in feedstock compaction strategies. One in particular being our Department of Energy funded work that evaluated the efficacy of using hydraulic compaction to increase the gross axle weights of reinforced, enclosed trailers. Another being the use of a stationary round baler that more than doubled the bulk densities of a standard round bale. Hub and spoke depots do provide access in far-reaching biomass regions, but it is almost always necessary to employ tools for densification such as milling, pelletizing, cubing, or high density hay presses to address the high cost of transportation and make these regions attainable.
While a hub and spoke biomass supply chain is not a panacea for making long distance hauling immediately economical, it does open up opportunities. Added processing or densification is going to introduce additional capital costs that would not otherwise be realized if a facility had access to their biomass feedstock within a twenty mile radius. But we need to remind ourselves which costs are most important. It is easy to focus on the final dry ton cost of the delivered feedstock, but for conversion facilities, the final cost of the product sold is the ultimate decision driver. If the co-location synergies and easy access into offtake markets provide enough value, a custom built hub and spoke supply chain could very well present opportunities that would not otherwise be available.
By Lance Stewart, Supply Chain Manager
