Development of a forest biomass supply model for a demonstration cogeneration project in Chile

Abstract: Although there is a great forest biomass potential in Chile and bioenergy could become a relevant energy industry in the country, its development has been prevented mainly by the lack of proper business models that can fit into the Chilean reality. Chilean forestry sector is characterized by small-scale ownership, a situation that requires the implementation of associative business models to provide a reliable supply for a cogeneration plant. Currently, small owners of biomass resources are not interested in developing bioenergy projects since they do not have enough feedstock to make a profitable project by their own. On the other hand, industries and project developers are not attracted to develop such projects because they do not have a secure and reliable long-term biomass supply. This is a vicious circle hard to break just leaving the market act by itself. The present project presents the development of a supply chain model for a small demonstration CHP plant located in Chiloé Island. The idea of this 2MWel installation is to promote these types of projects, that can provide heat and power to processing industries located nearby the biomass resource and replace conventional fuels currently used. According to calculations made, the amount of feedstock needed is available in a short distance from the energy demand point, which was ratified by a field trip made to the chosen plant site. The proposed business model to supply the plant was a cooperative model, based on the formation of a forest-owner cooperation. This model was chosen in order to empower small owners and provide them the appropriate management and technical tools to improve their income and quality of life by developing a sustainable and profitable business. There are several successful international experiences with this type of business model and also there are some small initiatives in the country that can be taken as a starting point for a novel industry in the energy sector. Since the Chilean energy matrix is strongly dominated by imported fossil fuels, it is only logical that the country should follow the path of developing its renewable energy sources and biomass is one of the most promising alternatives currently technically and economically feasible.