Skip to main content
Journal cover image

Co-firing coal with wood pellets for U.S. electricity generation: A real options analysis

Publication ,  Journal Article
Xian, H; Colson, G; Mei, B; Wetzstein, ME
Published in: Energy Policy
June 1, 2015

In contrast to EU, U.S. electric utilities are not employing the bioenergy technology of co-firing wood pellets with coal. This difference in employment patterns is explored within a real options analysis (ROA) for possible U.S. utilization of wood pellets, considering fuel-price series from 2009 to 2014. For analysis, these series are divided into two sub-periods based on different market conditions: Infancy (2009-2011) and Substitution (2012-2014). ROA indicates co-firing wood pellets with coal is feasible considering adoption during wood pellets' infancy, under low discount rates, and long power-plant lifespans. A portfolio effect of employing multiple fuels underlies this result. However, co-firing is not currently economically feasible. The different adoption decisions are likely a consequence of recent cheap and abundant U.S. natural gas. For co-fired wood pellets to be feasible, government incentives and/or a market increase in natural gas prices appear necessary.

Duke Scholars

Published In

Energy Policy

DOI

ISSN

0301-4215

Publication Date

June 1, 2015

Volume

81

Start / End Page

106 / 116

Related Subject Headings

  • Energy
 

Citation

APA
Chicago
ICMJE
MLA
NLM
Xian, H., Colson, G., Mei, B., & Wetzstein, M. E. (2015). Co-firing coal with wood pellets for U.S. electricity generation: A real options analysis. Energy Policy, 81, 106–116. https://doi.org/10.1016/j.enpol.2015.02.026
Xian, H., G. Colson, B. Mei, and M. E. Wetzstein. “Co-firing coal with wood pellets for U.S. electricity generation: A real options analysis.” Energy Policy 81 (June 1, 2015): 106–16. https://doi.org/10.1016/j.enpol.2015.02.026.
Xian H, Colson G, Mei B, Wetzstein ME. Co-firing coal with wood pellets for U.S. electricity generation: A real options analysis. Energy Policy. 2015 Jun 1;81:106–16.
Xian, H., et al. “Co-firing coal with wood pellets for U.S. electricity generation: A real options analysis.” Energy Policy, vol. 81, June 2015, pp. 106–16. Scopus, doi:10.1016/j.enpol.2015.02.026.
Xian H, Colson G, Mei B, Wetzstein ME. Co-firing coal with wood pellets for U.S. electricity generation: A real options analysis. Energy Policy. 2015 Jun 1;81:106–116.
Journal cover image

Published In

Energy Policy

DOI

ISSN

0301-4215

Publication Date

June 1, 2015

Volume

81

Start / End Page

106 / 116

Related Subject Headings

  • Energy