Stochastic simulation of forest fuel sourcing models under risk

Abstract

Climate change effects such as storms and droughts are leading to increased risk of forest damage in central Europe. The aim of this paper was to evaluate forest fuel sourcing models including climate change-induced risks on forest fuel supply. Stochastic risk events, such as storms and bark beetle infestations, were modelled by means of a Monte Carlo simulation, and the economic performance was evaluated for two fuel-sourcing models supplying a single combined heat and power plant (CHP). The first sourcing model depicted a common sourcing model for Austrian CHPs, where only forest chips provided by long- and short-term suppliers were stored. The second sourcing model additionally enabled the storage of salvaged pulpwood to supply forest fuel from the plant's own inventory during shortage periods. Simulation results showed that storing salvage pulpwood as feedstock considerably reduced supply chain risks and resulted in lower procurement costs (1–3% less than normal delivered cost without storing salvaged pulpwood).

Keywords:

• Climate change
• forest fuel
• Monte Carlo simulation
• procurement costs
• supply chain risk

Acknowledgements

The author would like to thank the programme “Neue Energien 2020” (New Energies 2020), an initiative of the Austrian Government, for financially supporting major parts of this research.