4.7 Article

Dynamic analysis of policy drivers for bioenergy commodity markets

Journal

ENERGY POLICY
Volume 52, Issue -, Pages 249-263

Publisher

ELSEVIER SCI LTD
DOI: 10.1016/j.enpol.2012.08.072

Keywords

Bioenergy markets; Modeling and simulation; Energy economics

Funding

  1. US Government under DOE [DE-AC07-05ID14517]

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Biomass is increasingly being considered as a feedstock to provide a clean and renewable source of energy in the form of both liquid fuels and electric power. In the United States, the biofuels and biopower industries are regulated by different policies and have different drivers, which impact the maximum price the industries are willing to pay for biomass. This article describes a dynamic computer simulation model that analyzes future behavior of bioenergy feedstock markets given policy and technical options. The model simulates the long-term dynamics of these markets by treating advanced biomass feedstocks as a commodity and projecting the total demand of each industry, as well as the market price over time. The model is used for an analysis of the United States bioenergy feedstock market that projects supply, demand, and market price given three independent buyers: domestic biopower, domestic biofuels, and foreign exports. With base-case assumptions, the biofuels industry is able to dominate the market and meet the federal Renewable Fuel Standard (RFS) targets for advanced biofuels. Further analyses suggest that United States bioenergy studies should include estimates of export demand in their projections, and that GHG-limiting policy would partially shield both industries from export dominance. (C) 2012 Elsevier Ltd. All rights reserved.

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