Biomass gasification opportunities in a district heating system

This paper evaluates the economic effects and the potential for reduced CO2 emissions when biomass gasification applications are introduced in a Swedish district heating (DH) system. The gasification applications included in the study deliver heat to the DH network while producing renewable electricity or biofuels. Gasification applications included are: external superheater for steam from waste incineration (waste boost, WB), gas engine CHP (BIGGE), combined cycle CHP (BIGCC) and production of synthetic natural gas (SNG) for use as transportation fuel. Six scenarios are used, employing two time perspectives – short-term and medium-term – and differing in economic input data, investment options and technical system. To evaluate the economic performance an optimisation model is used to identify the most profitable alternatives regarding investments and plant operation while meeting the DH demand. This study shows that introducing biomass gasification in the DH system will lead to economic benefits for the DH supplier as well as reduce global CO2 emissions. Biomass gasification significantly increases the potential for production of high value products (electricity or SNG) in the DH system. However, which form of investment that is most profitable is shown to be highly dependent on the level of policy instruments for biofuels and renewable electricity. Biomass gasification applications can thus be interesting for DH suppliers in the future, and may be a vital measure to reach the 2020 targets for greenhouse gases and renewable energy, given continued technology development and long-term policy instruments.