A Techno-Economic Market Analysis of pellet production in Oaxaca province.
Open Access
- Author:
- Lopez Olmedo, Karen
- Graduate Program:
- Biorenewable Systems
- Degree:
- Master of Science
- Document Type:
- Master Thesis
- Date of Defense:
- June 15, 2023
- Committee Members:
- Daniel Edward Ciolkosz, Thesis Advisor/Co-Advisor
Michael Gregory Jacobson, Committee Member
Suat Irmak, Program Head/Chair
Judd Harrison Michael, Committee Member - Keywords:
- Wood pellet production
market acceptance
TEA model
adoption rate
consumption patterns - Abstract:
- In this project, the feasibility of Wood pellet production for the Oaxaca Province of Mexico was investigated as a potential strategy for producing renewable energy and providing local economic benefit. This research integrated market, sustainability, and social criteria into a projection for pellet production feasibility in community forest-managed forests. First, local market characteristics were assessed through a survey of the community. Then a TEA (Techno- Economic Analysis) model was integrated with the data collected to estimate the economic performance of the conversion process, including capital cost, operating cost, and revenue based on technical and financial input parameters. Finally, the impact of variable market acceptance of this new product was projected. This study indicates that producing wood pellets from Pinus Pseudostrobus and Pinus Patula can be economically attractive to provide sustainable and renewable fuel for cooking in Oaxaca Region, compared to current fuel use patterns. However, the availability of an outside market plays a critical role for the local price competitiveness of the fuel. The results indicate that, when the adoption rate is considered, the price difference between stove-introduced scenarios and non-introduction is significatively greater when the adoption rate increase (0 vs 30 years). Nevertheless, the minimum selling price per Mg of pellets (US$122/Mg) far below price of charcoal (US$480.54 per Mg of charcoal). Furthermore, the Local MSP of pellets, in all the scenarios, keeps below the market price for pellets in Mexico, MXN$1,084/ Mg (current pellet price). This is true for local market adoption rates 5,10, and 30- year, both with provision of stoves and without provision of stove. Furthermore, community-wide switch over to pellet introduction represents a cost savings of more than 30% when applied to current consumption patterns.