Biomass gasification investment: a multi-criteria decision considering uncertain conditions

Previous studies that evaluated the best alternative for investment in bioenergy and biofuel production did not incorporate the uncertainty and risk associated with the economic feasibility and emission reduction in their decision-making; however, the risk and uncertainty can impact the selection of the best option. To bridge this gap, the present study proposes a multi-criteria decision-making (MCDM) model to consider the mean values and value at risks of the net present value (NPV) and emission reduction of investment alternatives, along with payback period and technological readiness as criteria for the selection of the best option. The MCDM model is applied to the case study of a large Kraft pulp mill in British Columbia, Canada, to identify the best investment alternative for production of syngas and renewable natural gas (RNG) through biomass gasification. Since the pulp mill prefers investment in an option with short payback period, low economic risk, and high level of technology readiness, the MCDM results suggest investment in a small-scale biomass gasification to only meet the mill's lime kiln heat demand through production of syngas. Investing in a large-scale biomass gasification technology to produce RNG in addition to syngas, which can increase the NPV and GHG emission reduction of the investment, requires technological advancement in RNG production, government incentives to reduce the high capital investment, change in carbon accounting, and the stability of the RNG market to minimize the investment risk.