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Biomass processing plants have a trade-off between two competing cost factors: as size increases, the economy of scale reduces per unit processing cost, while a longer biomass transportation distance increases the delivered cost of biomass. The competition between these cost factors leads to an optimum size at which the cost of energy produced from biomass is minimized. Four processing options are evaluated: power production via direct combustion and via biomass integrated gasification and combined cycle (BIGCC), ethanol production via fermentation, and syndiesel via Fischer Tropsch. The optimum size is calculated as a function of biomass gross yield (the biomass available to the processing plant from the total surrounding area) and processing cost (capital recovery and operating costs). Higher biomass gross yield and higher processing cost each lead to a higher optimum size. For most cases, a small relaxation in the objective of minimum cost, 3%, leads to a halving of plant size. Direct combustion and BIGCC each produce power, with BIGCC having a higher capital cost and conversion efficiency. When the delivered cost of biomass is high, BIGCC produces power at a lower cost than direct combustion. The crossover point at which this occurs is calculated as a function of the purchase cost of biomass and the biomass gross yield.

Logistics cost, the cost of moving feedstock or products, is a key component of the overall cost of recovering energy from biomass. In this study, we calculate for small- and large-project sizes, the relative cost of transportation by truck, rail, ship, and pipeline for three biomass feedstocks, by truck and pipeline for ethanol, and by transmission line for electrical power. Distance fixed costs (loading and unloading) and distance variable costs (transport, including power losses during transmission), are calculated for each biomass type and mode of transportation. Costs are normalized to a common basis of a giga Joules of biomass. The relative cost of moving products vs feedstock is an approximate measure of the incentive for location of biomass processing at the source of biomass, rather than at the point of ultimate consumption of produced energy. In general, the cost of transporting biomass is more than the cost of transporting its energy products. The gap in cost for transporting biomass vs power is significantly higher than the incremental cost of building and operating a power plant remote from a transmission grid. The cost of power transmission and ethanol transport by pipeline is highly dependent on scale of project. Transport of ethanol by truck has a lower cost than by pipeline up to capacities of 1800 t/d. The high cost of transshipment to a ship precludes shipping from being an economical mode of transport for distances less than 800 km (woodchips) and 1500 km (baled agricultural residues).