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Abstract: Biofuel production through polygeneration with heat as one of the by-products implies a possibility for cooperation between transport and district heating sectors by introducing large-scale biofuel production into district heating systems. The cooperation may have effects on both the biofuel production costs and the district heating production costs. This paper is the second part of the study that investigates those effects. The biofuel production costs evaluation, considering heat and electricity as by-products, was performed in the first part of the study. In this second part of the study, an evaluation of how such cooperation would influence the district heating production costs using Stockholm's district heating system as a case study was performed. The plants introduced in the district heating system were chosen depending on the future development of the transport sector. In order to perform sensitivity analyses of different energy market conditions, two energy market scenarios were applied. Despite the higher revenues from the sale of by-products, due to the capital intense investments required, the introduction of large-scale biofuel production into the district heating system does not guarantee economic benefits. Profitability is highly dependent on the types of biofuel production plants and energy market scenarios. The results show that large-scale biogas and ethanol production may lead to a significant reduction in the district heating production costs in both energy market scenarios, especially if support for transportation fuel produced from renewable energy sources is included. If the total biomass capacity of the biofuel production plants introduced into the district heating system is 900 MW, the district heating production costs would be negative and the whole public transport sector and more than 50% of the private cars in the region could be run on the ethanol and biogas produced. The profitability is shown to be lower if the raw biogas that is by-produced in the biofuel production plants is used for combined and power production instead of being sold as transportation fuel; however, this strategy may still result in profitability if the support for transportation fuel produced from renewable energy sources is included. Investments in Fischer–Tropsch diesel and dimethyl ether production are competitive to the investments in combined and power production only if high support for transportation fuel produced from renewable energy sources is included. [Copyright &y& Elsevier]

Abstract: This paper evaluates the effects on profitability of biofuel production if biofuel producers would sell the waste heat from the production to a local district heating system. All analyses have been performed considering four different technology cases for biofuel production. Two technology cases include ethanol production which is followed by by-production of raw biogas. This biogas can be upgraded and sold as biofuel (the first technology case) or directly used for combined heat and power production (the second technology case). The third and the fourth technology cases are Fischer-Tropsch diesel and dimethyl ether production plants based on biomass gasification. Two different district heating price levels and two different future energy market scenarios were considered. The sensitivity analyses of the discount rate were performed as well. In the case of energy market conditions, the profitability depends above all on the price ratio between biomass (used as the feedstock for biofuel production) and crude oil (used as the feedstock for fossil diesel and gasoline production). The reason for this is that the gate biofuel prices (the prices on which the biofuel would be sold) were calculated assuming that the final prices at the filling stations are the same as the prices of the replaced fossil fuel. The price ratios between biomass and district heating, and between biomass and electricity, also have an influence on the profitability, since higher district heating and electricity prices lead to higher revenues from the heat/electricity by-produced. Due to high biofuel (ethanol + biogas) efficiency, the ethanol production plant which produces upgraded biogas has the lowest biofuel production costs. Those costs would be lower than the biofuel gate prices even if the support for transportation fuel produced from renewable energy sources were not included. If the raw biogas that is by-produced would instead be used directly for combined heat and power production, the revenues from the electricity and heat would increase, but at the same time the biofuel efficiency would be lower, which would lead to higher production costs. On the other hand, due to the fact that it has the highest heat efficiency compared to the other technologies, the ethanol production in this plant shows a high sensitivity to the district heating price level, and the economic benefit from introducing such a plant into a district heating system is most obvious. Assuming a low discount rate (6%), the introduction of such a plant into a district heating system would lead to between 28% and 52% (depending on the district heating price level and energy market scenario) lower biofuel production costs. Due to the lower revenues from the heat and electricity co-produced, and higher capital investments compared to the ethanol production plants, Fischer-Tropsch diesel and dimethyl ether productions are shown to be profitable only if high support for transportation fuel produced from renewable energy sources is included. The results also show that an increase of the discount rate from 6% to 10% does not have a significant influence on the biofuel production costs. Depending on the biofuel production plant, and on the energy market and district heating conditions, when the discount rate increases from 6% to 10%, the biofuel production costs increase within a range from 2.2% to 6.8%. [Copyright &y& Elsevier]

Abstract: In this study, cooperation between Stockholm's transport and district heating sectors is analysed. The cooperation concerns the integration of biofuel polygeneration production. A MODEST optimisation model framework is used, assuming various energy market and transport sector scenarios for the year 2030. The scenarios with biofuel production and increased biofuel use in the region are compared with reference scenarios where all new plants introduced into the district heating sector are combined heat and power plants, and the share of biofuel used in the transport sector is the same as today. The results show that the cooperation implies an opportunity to reduce fossil fuel consumption in the sectors by between 20% and 65%, depending on energy market conditions and assumed transport sector scenarios. If we consider biomass an unlimited resource, the potential for greenhouse gas emissions reduction is significant. However, considering that biomass is a limited resource, the increase of biomass use in the district heating system may lead to a decrease of biomass use in other energy systems. The potential for reduction of global greenhouse gas emissions is thus highly dependent on the alternative use of biomass. If this alternative is used for co-firing in coal condensing power plants, biomass use in combined heat and power plants would be more desirable than biofuel production through polygeneration. On the other hand, if this alternative is used for traditional biofuel production (without co-production of heat and electricity), the benefits of biofuel production through polygeneration from a greenhouse gas emissions perspective is superior. However, if carbon capture and storage technology is applied on the biofuel polygeneration plants, the introduction of large-scale biofuel production into the district heating system would result in a reduction of global greenhouse gas emissions independent of the assumed alternative use of biomass. [Copyright &y& Elsevier]