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Stochastic simulation of forest fuel sourcing models under risk

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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).
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Keywords: Climate change; Monte Carlo simulation; forest fuel; procurement costs; supply chain risk

Document Type: Research Article

Affiliations: BOKU University of Natural Resources and Applied Life Sciences, Vienna, Austria

Publication date: 2010-12-01

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