main innovation types of forest biomass supply chains innovation types of forest biomass supply...
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Main innovation types of forest biomass supply chains
Kalle Karttunen1, Juha Laitila2 & Tapio Ranta1
1: Lappeenranta University of Technology (LUT), School of Energy, Bioenergy unit, Mikkeli, Finland2: Natural Resources Institute Finland, Joensuu, Finland.
FORMEC 2015 – Forest engineering: Making a positive contribution
October 4 – 8, 2015, Linz, Austria
Content1. Background
- Increasing use of small-diameter wood- Innovation types- Stumpage price for forest owners
2. Material and methods- Cases: Harvesting and supply chain
alternatives- Cutting productivity comparison
3. Results- Total cost of supply chains- Cost reduction (%)
4. Discussion
5. Conclusion
1. BackgroundIncreasing use of small-diameter wood for energy in Finland
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m3
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Total
Rotten wood
Stumps
Logging residues
Small-diameter wood
Aim still to increase 6 milj. m3
~half million small-diameter wood every year more
Increasing use for small-diameter wood for pulp in Finland
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Birch pulpwood
Spruce pulpwood
Pine pulpwood
Aim to increase 10 milj. m3
~half million pines from first thinnings every year more
Innovation typesfor harvesting and supply chain of small-diameter wood
− Incremental innovation starting from single treecutting to… − develop cutting heads of multi-tree handling…
− to enable integrated cutting of small-diameter wood (pulp and energy wood)
− delimbed stemwood cutting− whole tree cutting
− Productivity increase and unit cost decrease− Cost-efficient cutting of small-diameter wood− Possible energy use of delimbed wood− Potential stumpage price for forest owners?
− Radical innovation of bundling small-diameterwood has been developing too
− Network innovation (Karttunen 2015) to find out the most potential forest management methods and supply chains to produce small-diameter wood withthe lowest total cost
http://www.ponsse.com/products/bioenergy/multi-stemming
Pulp wood prices has decreased as well in long-term real prices as nominal prices in short-term(over supply / under demand). New subsidies enable same money either industrial or energy use, which has dropped pulp wood stumpage prices of first thinning!!!
Nominal stumpage price of pulp wood from first thinnings:
€/m
3
Stumpage price for forest owners
PineSpruceBirch
…but energy wood plant prices has been increasing when theuse of foret fuel has increased (2014 average: 21.4 €/MWh)…
Forestchips
GasCoal (CHP)Peat
CoalForest chips (50 km)Gas (CHP)
…but energy wood stumpage prices (2014) are not high
1.22
3.23
1.11
4.21
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Stumps Logging residues Undelimbed wholetrees
Delimbed stemwood
€/m
3
2. Material and methodsCases: Harvesting and supply chain alternatives
− Each case compared ”traditional” pulp wood supply chain vsinnovative energy wood supply chain
− Cases were based on early studies and chosen to compare the main innovation types:
− 1. Case: Traditional single tree cutting vs. innovative multi-tree cutting of small-diameter wood “Incremental innovation”
− 2. Case: Traditional multi-tree cutting vs. innovative bundling system of small-diameter wood “Radical innovation”
− 3. Case: Traditional density stand (2000 trees/ha) vs. innovative denser forest management (3000 trees/ha) and supply chain of small-diameter wood “Network innovation”
Follow the size of tree between the cases (~40 and/or ~60 dm3)…
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Prod
uctiv
ity (P
Mh 0
), m
3 /h
Size of tree (dm3)
Single tree cutting (Petty & Kärhä 2014)
Multi-tree cutting (Petty & Kärhä 2014)
1. Case: Traditional single tree cutting vs. innovative multi-tree cutting of small-diameter wood “Incremental innovation”
Cutting productivity comparison
Innovative Traditional
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0 10 20 30 40 50 60 70 80 90 100
Prod
uctiv
ity (P
Mh 0
), m
3 /h
Size of tree (dm3)
Whole-tree bundling (Nuutinen & Björheden, 2013)Whole-tree bundling (Alavarvi & Ovaskainen, 2014)Multi-tree cutting (Alavarvi & Ovaskainen, 2014)
2. Case: Traditional multi-tree cutting vs. innovative bundling system of small-diameter wood “Radical innovation”
Innovative Traditional
Cutting productivity comparison
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Prod
uctiv
ity (P
Mh 0
), m
3 /h
Size of tree (dm3)
3. Case: Traditional density stand (2000 trees/ha) vs. innovative denser (3000 trees/ha) forest management and supply chain of small-diameter wood “Network innovation”
Density of stand before cutting (trees/ha): 3000 vs. 2000
Innovative Traditional
Cutting productivity comparison
Multi-tree cutting (Karttunen & Laitila 2015)
3. Case: Difference of volume and size of trees from first cutting in relation to density of stand (before first cutting)
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Volu
me
m3 /h
a
Density of stand (trees/ha)
Volume, m3Size of tree, dm3
Sizeof tree, dm
3/tree
More detailed information
3. Case: Forest management simulation
− This study focused on young stands representing typical Scots pine (Pinus sylvestris L.) stands in Finland
− Site type was the dryish and fresh heath sites and the density of trees was set to 2000 trees/ha (traditional baseline) and 3000 trees/ha (innovative)
− Forest stand simulator MOTTI was used in this study based on silvicultural recommendations to grow forest stand data
Discounting (3% interest rate) cutting incomes and silvicultural costs to the starting point of rotation(comparability) -> Stumpage price of energy wood
Pre-commercial thinningFirst thinning
Second thinningFinal cutting
More detailed information
3. ResultsTotal cost of supply chains (€/m3)
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1. Case 2. Case 3. Case 1. Case 2. Case 3. Case
Traditional Innovative
€/m
3
Feed-in transport
Terminal
Chipping
Long-distance transportation
Forwarding
Logging
Procurement
Stumpage price
Total cost of supply chainsCase 3, Traditional: Logging cost and stumpage price are goingdifferent directions due to diameter of trees
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€/m
3
Diameter of trees, cm (before cutting)
Total cost
Long-distancetransportationForwarding
Logging cost
Stumpage price
Procurement
Chipping
Terminal
Feed-in transport
Total cost of supply chains (€/m3)
46.450.2 50.7
44.146.8 45.3
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€/m
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1. Case 2. Case 3. Case
Traditional, average
Innovative, average
Cost reduction (%)
4.9
6.8
10.6
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Cos
t red
uctio
n, %
Incremental Radical Network
𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶 𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝑟𝐶𝐶𝑟𝑟𝐶𝐶𝑟𝑟 (%) =𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝑇𝑇 − 𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐼𝐼
𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝑇𝑇∗ 100
CostT: Cost of traditional supply chain (€/unit) CostI: Cost of innovative supply chain (€/unit)
Discussion
− Main innovation types of small-diameter supply chain were divided:− Incremental innovation (multi-tree handling machine)− Radical innovation (bundling machine)− Network innovation (forest management and supply chain combination)
− The forest management alternatives to produce small-diameter energy wood and especially estimated stumpage prices have been missing in early studies of supply chains
− We found the stumpage price one of the most important cost factor of small-diameter wood (in addition logging cost), which cannot be left out of the study analysis of entire forest biomass supply chains
− Cost reduction of network innovation type was the highest − Highest average cost reduction 10.6% (potential ~15%)
− It is not worth innovating only inside company´s own activities but opening theinnovation process for the entire supply chain network is crucial
− Co-operative network innovation can be seen as an additional element for a company´s own innovation
− What does this mean in process innovation of small-diameter wood supply chains?− The best way to innovate is to create co-operative network between…
… Researchers, study projects and companies… Science, developing and practice… Forest owner (management), logistics and plant / final customer
Conclusion
CUSTOMER CUSTOMERINPUT OUTPUT
PROCESS
FEEDBACK
More information…
Main innovation types of forest biomass supply chains can be accessmore closely:Karttunen, K. 2015. Added-value innovation of forest biomass supply chains. 78 p. Dissertationes Forestales 186. http://dx.doi.org/10.14214/df.186
3. Case of forest management and supply chain analysis of small-diameter wood (as network innovation) can be access more closely:K. Karttunen & J. Laitila (2015): Forest management regime options for integrated small-diameter wood harvesting and supply chain from young Scots pine (Pinus sylvestris L.) stands, International Journal of Forest Engineering, DOI:10.1080/14942119.2015.1083749
http://dx.doi.org/10.1080/14942119.2015.1083749
Thank you for your attention!
Kalle [email protected] University of Technology (LUT), School of Energy, Bioenergy unit, Lönnrotinkatu 7 50100 Mikkeli, Finland