Challenges of Renewable Forest Fuels for Green Electricity Market

Abstract

In this study, strategic electricity market scenarios are considered in a grid of Scandinavia. This multiple-objective decision environment includes the allocation of a number of renewable forest fuel procurement chains to a combined heat and power plant in Finland. The decision environment includes also electricity procurement from Sweden and Russia. The environment is further complicated by sequence-dependent operations of the local procurement chains during different periods. Due to the complex nature of the environment, multiple-objective methods cannot be directly used to solve the electricity production problem in a manner that is techno-economically relevant to the forest energy industry. Therefore, local and time-varying parameters were measured in local wood procurement conditions to improve the solution method. Using these measurements the smart decision-support system automatically adjusted the multiple-objective methodology to better describe the combinatorial complexity of the production sector. The properties of this methodology are discussed and three scenarios of how the system works based on local real world data and optional feed-in tariff of green electricity are presented. The Finnish electricity market is subject to policy decisions regarding green energy production regulations. These decisions should be made on the basis of local techno-economic analysis presented in this study accounting for the effects of forest operations on the electricity production and import.