Bio-Energy Supply Chain - Case Study Example

Introduction Due to the increased cost of acquiring energy, there has been a development to provide this energy through the use of the biomass or the waste materials. This is the best alternative that improves the energy efficiency in a country or over the globe in general. For that energy to be retrieved from the waste in the earth there, has to be a series of events that need to be chronologically followed to ensure the final product reaches the consumer at the least cost. The management of this series of events or the processes is what is called the supply chain management. This essay is based on a case study that was carried in the United Kingdom on the most efficient way to acquire energy given the most common methods used, that is, through oils and natural gases. Summary The case study was done on the Ecotec 21 project, whose main objective was to bring about energy efficiency and sustainability in United Kingdom and France, who are partners in project's implementation. The project was all about the use of combined heat and power (CHP) generated from the bio energy and not run by the oil and natural gases. The project implementation is to be carried in the University of Greenwich (Abbott, Cullis, Gibson, Harris and Raven 2007). The University wishes to use glycerol as the bio-fuel to be used for generating the combined heat and power (CHP). The main objective of this essay is to illustrate on the process to be followed when sourcing this bio-fuel to the final consumption by the university. The many risks that are involved in the implementation of this project will also be discussed. The end users and the decision makers will also need the information regarding the best risk management strategies to be created in order to mitigate the risks involved (Kouch, Bhima, Asuquo and Toronjo 2012). The essay will therefore, specify the supply chain risks to be countered and how they will be mitigated. The essay will also touch on the benefits this project brings on terms of both the environment sustainability and energy efficiency and sustainability. Supply chain process A typical supply chain model for the extraction of the glycerol from the retrieval stage to the end user is shown in the figure below. The figure above shows a series of five processes that are followed during the production of the combined heat and power from glycerol. The first stage involves the retrieval of the glycerol from the feed stocks. The feedstock choice is determinant of many other factors. The second stage involves the movement of the acquired glycerol from the collection point to the production point (Tokumoto, Bandow, Kurahashi and Wakamatsu 2012). The key factors to consider in this stage are the fuel prices, the transport network to use, the weight of the feedstock, the distance and the type of transport to use. The third stage in the supply chain is the biofuels production. In setting up the best or suitable site for the location, the producers take into consideration the transport connectivity between the production point and the nearest transport network. This stage also explains the forms of storage of the feedstock, the quantity of water that will be needed and the production capacity that is in place. The fourth stage after production  product's distribution products to the end users. This stage takes into consideration the intermodal network to be able to cater foe as many end users as possible. The other considerations include reviewing the policies, the network capacity and the supply of the products (Sims 2012). The last cycle or stage in the supply chain is the enduse of the product. The end user of the product in this case is the Greenwich University. The stations and other spatial distribution and the demand for the product are considered. Sourcing of the bio-fuel (Feedstock) For a very long time, before the evolving of the new technology, knowledge on the existence of glycerol was well advanced to a lot of people. According to Sims (2012) crude glycerol can be derived from a variety of feedstocks. However it is extremely difficult to understand on the availability of this glycerol feedstock taking into consideration the factors that influence the supply. As of the current times, the biofuel feedstocks used in the United Kingdom are a mixture of what has been imported and what is available in the United Kingdom. The grade of this crude glycerol is dependent on the feed stock from which it was derived. The feedstocks include animal fats, the vegetable oils as well as the yellow grease. Other potential feedstock available in the United kingdom are the energy crops, for instance the short rotation coppice which is planted particularly to produce fuel, the forestry residues, the agricultural residues, the sewage sludge, the waste woods, the livestock manures, the stem wood, the saw mill co-products, the landfill gas, the renewable wastes fractions, the arboricultural arisings and the crops that are purposely used for the generation of the bio fuel for instance the sugar beet that generate bioethanol. Jones (2009) states that glycerol happens to be the by-product waste resulting from the production of the bio-diesel in the United Kingdom. This happens during the treatment of the used cooking oils and fats using the methanol. He further states that the production of glycerol increases globally due to the increase of manufactured biodiesel. The glycerol is produced as a by-product. Jones (2009) has also explained another source where the glycerol can be derived from. He states that glycerol can be derived from algae Dunaliella salina. This is found in the water ponds that contain high levels of saline concentration. It is also found in the coastal desert located in Namibia as well as the Dead Sea. According to Jones (2009) the research carried has shown that the production of glycerol is determined by the salinity of the water, in that the higher the saline concentration the greater production of glycerol. The algae produce the glycerin by dry weight as a means of protection. Glycerol protects it from the osmotic pressure that builds up due to high salt concentration. The algae can be spotted eve in the solar salt production facilities. This way of deriving glycerol is preferred because of many reasons. First the area where the algae survive tends to be sustainable. The sun in these arid and semi arid areas increases the concentration of the dissolved salts. The algae also survive in lands that are not necessarily agricultural lands and are not in a competition with any other organism over the food chain. Secondly, the glycerol that is generated by the algae is not modified or refined in any way before using. The glycerol fuelled power generators can be used to provide the energy that is required to extract the glycerol through the use of the waste heat. Feedstock logistic Once the glycerol has been extracted, the transportation criteria to be used are specified. This stage in the supply chain involves at specifying the various transportation models to be used and making decisions regarding the cost effective method. The type of transport to be used is dependent on the feedstock from which the glycerol has been obtained. Another factor considered when choosing the method of transport is the distance between the collection point and the production point. As previously learnt, glycerol can be obtained from the animal fats or vegetable waste or the artificial glycerol produced (Johns 2012). Other types of transport that can be used to transport include through airlifting or use of pipeline. The pipeline method is mostly applicable to the glycerol that is generated in the form of liquid. Keith (2012) explains that the best way to transport the glycerine that has been obtained from the algae Dunaliella salina is through shipping it in bulk. The glycerol extracted can be used to power the carriers. Another advantage of this glycerol is that it reduces the consequences that come with spillage of fuel or oil in the oceans. When making the decision on the logistic of the feedstock, the fuel price is also considered as a key factor. Shipping is considered the most suitable method because apart from enhancing flexibility, it is fuel conservative, this is evident where the glycerol that has been extracted is used to fuel the carriers that ship it. Bio-fuels production This stage of the supply chain focuses on the disposal of the glycerol that has been extracted. While setting up a place for the production of the glycerol, a number of factors are considered. For instance, the connectivity of the place with the transport network ought to be defined. This means that the site cannot be set up in a remote location without any access of infrastructure. Technology is a main factor while considering the site. The production of the glycerol has not been a common activity in the past for lack of good technology. It is evident now that the technology has evolved, and a new way of doing the production has been identified by the Greenwich University. The site should be well equipped with advanced technology. The production capacity should also be made in such a way not to limit the levels of production. The capacity should also be flexible to help in ensuring continuous flow of processes. Once the glycerol has been retrieved, from whichever feed stock, the means of disposal of the glycerol produced as a byproduct of the bio diesel becomes the issue. During the production, there are various methods that are employed to aid in the disposal. The method to use is however, defined by how the end users want to benefit from the production. These include through combustion, through animal feeds, through composting, through anaerobic digestion and finally through converting it thermo chemically or biologically to other value added products like cooking oil, cosmetics among others. Combustion or burning of the glycerol is a method that has been previously used to dispose glycerol through converting it into power or heat. Pollitt (2008) proposes that the best way to dispose it is through helping to solve the environmental issues that are brought about by the other fuels. He states that though glycerol is viscous, thick and full of oxygen, therefore, difficult to burn, it can be combusted and used to generate power. In this case, the University of Greenwich has published a five year carbon management plan to help in the reducing of the carbon dioxide emissions from its scope. It is also focusing on adopting the decentralized energy provision. This will be achieved through the production of its own energy. The aim is to improve and modify the infrastructure facilities to suit the needs of the students, staff and the stake holders and to support the university's strategy for reduction of the carbon emission. This is in line with the heating and lighting of its building that uses a lot of energy. The University of Greenwich therefore, aims at using glycerol as a biofuel in the lighting and heating processes through combustion. Combustion of Glycerol The only problem that caused doubts on the use of glycerol as a bio-fuel was the method of combusting it. With the emergence of the new technology, it is now possible to combust the bio-fuel both in heat and power with the greatest levels of efficiency and very low emission levels. Considering the growth of capacity involved with the production of the biodiesel, two alternatives for using glycerol are provided. The options also are also provided due to the end products of the glycerol by-product. One option involves burning the glycerol locally to be used for the generating of the combined heat and process. This replaces the fossil fuels or oil and natural gases and improves the biodiesel production. This is done with the knowledge that glycerol has low energy density, is highly viscous and has a high ignition temperature, hence making it a bit hard to burn it. A properly designed refractory burner is therefore, used to provide the thermal environment that is required to effectively burn glycerol. The burner is normally designed to fit the retrofit applications that are found in the fire tube boilers packaged on a commercial scale. The byproduct composition that is produced after burning of the glycerol is expected to change in the course depending on the type of catalyst used, the stock from which the biodiesel was sourced from and the degree of the post reaction cleanup. The glycerol biodiesel was sourced from the vegetable oils. The post reaction cleanup involved demethylization. The results of the combustion were characterized by a range of emissions that are attributed to the residua; catalyst used in the refractory burner. The emissions ranged from nitrogen oxides to hydrocarbons and crude glycerol that included both the methylated and the demethylated ones. According to Pollitt (2008), glycerol can be burnt in the power station to produce power. However, he states that poor conversion into energy and inefficient combustion could lead to production of pollutants that are harmful to the environment. He advocates for full conversion of the glycerol to hydrogen that is being identified as the future fuel. He explains that glycerol molecule is composed of 8 hydrogen, 3 carbon, and 3 oxygen atoms. Unlocking of the hydrogen atom generates a rich source of fuel from the renewable sources. He also explains that the highest percentage of the hydrogen used in the world is generated from the natural gas methane. Glycerol contains a high percentage of hydrogen content than methane; hence converting it into hydrogen provides the best method of combusting it. Extraction of hydrogen from glycerol is done by the use of a reactor (Pollitt 2008). It is this hydrogen that is used for distribution of power to the final consumers. Biofuels Distribution After the combustion and burning of glycerol, the end product is energy that can be used both a fuel and for heating and lighting. The biofuels require the intermodal transport to enable distribution to all the end users. For instance, the end users of the product have differing needs and wands. Some will use it for lighting and others for heating and the rest for fuelling. Biofuels End-use The University of Greenwich objective is well articulated. They will use an engine that will be powered and fuelled by the glycerol. Constraints in the supply of feedstock ` The likely risk that the University is likely being face when it comes to the supply can be divided into two is the competition for the feedstock from other sectors of the economy and the price of this feedstock. Competition for the feedstock could arise from the usage of the agricultural land. People use the land for all other functions including production of food. This food could vary from the one for the human consumption and for the animal consumption. The agricultural land could also be used for other purposes not food related. This could include constructions of buildings and dams, other infrastructure like roads, telecommunications among other. Competition could also arise from other uses of wood. This could include production of the papers, pulps and the panel board. Competition could also arise from the usage of other waste materials for instance recycling them or composting them. Other constraints likely to be encountered include the market, technical, infrastructural and the policy and regulatory risks or constraints. The policy constraints range from energy to the environmental policies that have been put in place. The investments that are done to secure the resources for future use will require longer energy policies. These policies could be introduced on the usage of the waste materials, the agricultural and the forest policies. For instance, the impact of the using the land for the production of the energy crops on the environmental stewardship for the farmers is not known. There are also uncertainties that relate to what defines waste in terms of the feedstock retrieval. This may increase the cost of generating fuels that are derived from the waste. Absence of a long term policy that is stable reduces the confidence in the investment. There is also the problem of regulatory uncertainty where the policies set are unclear. Another constraint is brought about by the compliance of the supply side legislation and regulations. Meeting these current and future standards in an effort to ensure sustainability becomes an issue. There is also the lack of grants for the capital investment required in the supply of the feedstock. The feedstock may be too complex to meet the requirements by the regulatory body. There are concerns regarding the impact on the prices of all other commodities. The market constraints arise where the potential suppliers are cautious not to be tied or restricted to only one customer in a long term contract. Another market constraint is the risks involved in the market place compared to other alternative uses of the feedstocks. There is also the risk of not obtaining project finance of existence of very low levels of investment. The insufficient returns margins also affect the supply of the feedstock in that at times there are very poor margins or no profit at all or long paybacks terms. There is also the risk of the cash flow where the time lag between the initial investment and the return is long. Another market risk is the high capital cost of investment when compared to the operational costs. There is also the risk of trade barriers for instance on the import of the glycerol from other countries or of the feedstock itself. An example is the Russian tariff on the export of timber. Technical constraints arise where the standards of the fuel used are introduced. What these standards do is to introduce the criteria in which a certain type of investment will be done. This is to ensure that the specified investment will lead to supply of feedstocks that meet the needs of the market. Other technical constraints that may arise include specification of the characteristics of the combustion of fuels which lead to corrosion. These consequences could affect the environment and therefore, lead to investment in the technical solutions. To ensure the problems are overcome (Hilliard 2011). Investment could also be required to upgrade the biofuel into the national gas grid at the most competitive prices. The perception of the risk can be spread to the farmers and the forestry sector. The market for these feedstocks has been dominated by some very key players that happen to threaten the upcoming ones. The experience of some of the farmers in the market influences the risk (Moes 2008). Another threat that encompasses the supply of the feedstock includes the rise in the demand for the glycerol by other competing users for instance the companies that manufacture cosmetics and the food products. There are also growing concerns on the sustainability of the energy produced by the glycerol. There is also a rise in the targets relating to the bioenergy in the overseas. Constraints of the linguistic of feedstock and end product The infrastructural constraints that could emerge revolve around the collection, storage and the transport of the feedstock. There should be guidelines on the suitable collection points for the dispersed feedstock, which were previously not set. Transport and processing of the feedstocks add up to the price of the bioenergy feedstock (Brues 2010). There is also the risk of inadequate harvesting equipment of the energy crops. The United Kingdom is lacking a port and transport infrastructure for the feedstocks that have been imported. Lack of a good transport infrastructure is a major constraint in the transportation of the feeds tock from the harvesting centers to the production centre. Constraints on the production of the biofuel There is also the perception of the risk that comes with the development of the bioenergy plant. This is the plant where the production of the fuel will be done from the glycerol acquired. The risk revolves around the financing of the project taking into consideration the interest that will be charged. Any project that is planned for face many risks relating to its operation. For instance, there is the risk of the sponsors of the project withdrawing their funds before the completion of the process (Kimonda, 2009). There is the risk of inadequate energy conversion equipment to handle the feedstocks that may be difficult to process. The lack of these suitable equipments could paralyze the operations. Lack of cost effective and advanced conversion technologies for the feedstocks difficult to handle is also a major constraint (Steve 2010). Technology is still seen and perceived as a very complex item, in that even the technology providers themselves are not adequate. There is also inadequate processing facility for the waste, more specifically the contaminated waste streams. Lack of harvesting and storage facilities is also major constraint. Risks faced in the last stage of the supply chain After the production has been done, there is the risk that the market has been dominated by oil and other natural gases and therefore, the production of fuel from the glycerol may not have the impact intended for. There is also a conflict of interest that has emerged on the use of the glycerol as a fuel or for heating and powering (Jones 2009). Study has shown that some for the feedstocks that are used or heating and power could be different from the ones used for production of the biofuel. However, potential conflicts in relation to the land being used for the production of the energy crops that are used to produce the first generation biofuels. The energy potential is greater if the land used is specifically planted with the energy crops. The production of these energy crops poses further risk and investment to the farmer. The agricultural sector is however, faced with a lower risk if planting of the crops used for the biofuel is done (Wen 2012). The conflict could also be enhanced by the sharing of the lignocelluloses resources as a feedstock. These resources include the wood and the agricultural residues. Competition for these resources between the users of the glycerol is a major constraint. Mitigation of the risk ` There is a need to invest heavily on the newest technology. Technology is the major constraint that limits the harvesting of the feedstock, the transportation and the processing of the feedstock to produce glycerol (Howes, Bates, Landy, O’Brien 2011). There is also need to increase the planting and the harvesting material equipment for the energy crops. This will enhance continuous flow of the process. The United Kingdom has also to invest on transport infrastructure to enable flexibility when it comes to dealing with a wide range of the feedstocks. The body responsible for the setting of standards should also ensure that the standards set are flexible and achievable. These are the standards regarding the policies of the various feedstocks maintenance (Ann 2012). This will reduce the risk of competition for the feedstock among other players of the economy. Conclusion Energy efficiency and sustainability are the major objective of the University of Greenwich. This essay has outlined how the university is intending to achieve this through adoption of the glycerol to power the engine running the combined heat and power. The essay has outlined the supply chain model to be adopted from the collection and harvesting of the biofuel to the consumption by the end users. This supply chain has been specified from the collection of the feedstock, where to source it and how to transport to the production point. The essay has also specified some of the sources that glycerol can be retrieved from ranging from the animal wastes to the algae and the byproducts from production of other fuels. The essay has also specified some of the compounds  to be faced in the course of each stage of the supply chain. The sourcing of the feedstock for instance has attracted a lot of risks. This is because of the supply markets, the policies governing the supply and the technology that is required to aid in carrying out all that. The production stage has also attracted various risks mainly the technology for processing the feedstocks. The essay in conclusion has highlighted some of the ways in which the risks faced can be mitigated. Bibliography Andrew P. Abbott, Paul M. Cullis, Manda J. Gibson, Robert C. Harris and Emma Raven 2007. Extraction of glycerol from biodiesel into an eutectic based ionic liquid. 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