The research project purpose was to investigate the economic feasibility of installing biomass gasification based heat and/or power plants in the wood processing industry in New Zealand. Previous research studied MDF (Medium Density Fibreboard) plant integration, while current research focuses on LVL (Laminated Veneer Lumber) and sawmill integration. Process modelling to estimate system economics was performed using both Excel and HYSYS (heat and mass balance software).

Previous research led to the conclusion that a gasifier/boiler/gas engine combination is the most feasible of cogeneration arrangements at the scale required and most economic when sized to meet the mills heat and internal electricity requirements. A 120,000 m3/yr MDF mill requires 19MW of thermal energy and 4.79MW electrical. The estimated energy plant capital cost is $24 million producing a breakeven electricity price of 4c/kWh based on a 30 year plant life. Subsequent research shows for a typical sawmill producing 300 m3/day of timber the peak energy requirements are 7.8 MW thermal for drying and 1.4MW electrical. The capital cost of an energy plant meeting these requirements would be $NZ10.6 million. The breakeven electricity price is 12.9 c/kWh. For a typical LVL mill (80,000 m3/yr) the thermal requirement is 10 MW and the electrical 5.1 MW. The capital cost in this scenario is $NZ21 million. Breakeven electricity cost is 8.9 c/kWh.

The economics for a LVL or MDF plant are competitive with other renewable power generators such as wind power. There is potential to further improve economics by investigating cheaper alternative capital items.