Economic and risk assessment of industrial wood chip drying

Fresh wood chips with natural moisture (wet chips) have been used for energy generation. Wood chip drying is an alternative of pretreatment aimed to improve quality, but its viability needs to be tested, since this process is energetically and economically expensive. This work presents an assessment of a local industry that dries wood chips utilizing a rotary dryer, allowing it to establish a base case scenario for biomass drying. From this, different alternatives of energy and raw material consumption scenarios were established. Risk and sensitivity analyzes were performed to measure the impact on economic indicators. The risk analysis was carried out via Monte Carlo simulations. The results showed that the project is economically viable, with a payback period of 1.67 years, an Internal Rate Return of 60.2% and a Benefit Cost Ratio of 1.39. The sensitivity analysis showed that even with a 28.6% increase in purchase price and a 21.4% decrease in the sale price of wood chips, the economic indicators remained viable. Under the conditions evaluated, no significant risk (p < 0.1%) to the project viability was identified.

Automated summary

The study shows that drying wood chips using a rotary dryer is economically viable, with a short payback period and high Internal Rate Return. Even with an increase in purchase price and a decrease in sale price, the economic indicators remain viable.