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Energy conversion vs structural products: A novel multi-objective multi-period linear optimisation with application to the Australian hardwood plantation thinned logs

Lu, Hangyong Ray, El Hanandeh, Ali
Journal of cleaner production 2019 v.224 pp. 614-625
bioenergy, economic performance, economic valuation, electricity, energy conversion, environmental factors, forest industries, forestry, gasification, hardwood, heat production, issues and policy, laminated veneer lumber, life cycle assessment, linear programming, marketing, models, plantations, resource allocation, supply balance, wood chips, Australia
Forestry products have multiple uses including energy conversion and structural elements manufacturing. Each utilisation pathway has its own environmental and economic burdens and benefits, which may also change overtime due to market demand, policy change and local environmental conditions. In this study, an optimisation framework is introduced to identify the optimal allocation of resources based on life cycle perspective. The problem is broken into a series of multi-objective linear programs to account for potential non-linearity in the objective functions and constraints. First, life cycle costing analysis and environmental life cycle assessment were conducted to quantify the environmental and economic values of each decision variable. The values were used to construct economic and environmental objective functions. Then, normalisation procedures were followed to convert the two objective functions into a single objective function. The model was applied to the case of logs generated from the second thinning of the hardwood plantations in Australia. Eight utilisation scenarios were considered, including two engineered wood products and six bioenergy applications. The costs of the displaced products by the alternatives were included as avoided costs in line with the LCA scope. The model was solved in six time periods (ten years each). The robustness of the solution was tested by assigning different weightings to the environmental and economic objectives. The result showed that Woodchips Gasification (WCG) for electricity and heat production was the dominating solution for the first period with 85% of the logs allocated to this option. Nevertheless, the quantities allocated to energy production declined progressively over the subsequent periods. The laminated veneer lumber (LVL) option surpassed the WCG and became more dominant option starting from the fourth period. In the final period, 100% of thinned logs were allocated to the LVL option due to the predicted increased demand. The developed framework offers forestry managements the foresight to enhance their long-term environmental and economic performance through strategic multi-period optimisation approach, thus avoiding the technology lock-in and allowing flexibility in the system to adapt to future changes. Although this model was demonstrated using the forestry industry case, the framework can be applied to any resource allocation problem.