Terminal Cost Analysis for Forest Fuel Supply in Finland

Abstract

As forest fuel demand increases, new logistical solutions are needed. Most of the increase in use is expected to take place in large heat and power (CHP) production units which set special requirements for the supply as both procurement volumes and transport distances increase. Biomass fuel terminals broaden the spectrum of available supply options by offering cost-effective large-scale biomass storage and processing options for securing the fuel supply in all conditions. This study aimed to study different costs of a satellite terminal and to produce important concept and cost information for developing forest fuel logistics based on future terminals. The figures indicate that terminals do not create direct cost benefits per se: direct supply chains are more economical compared to supply through terminals. However, there are several indirect benefits that can be reached via fuel supply through terminals: regional fuel procurement can be widened to a national scale, security of supply increases through easily available storages, large supply volumes can be delivered by an individual operator, prices remain more stable and a more even quality of delivered fuel can be achieved.