Woody biomass is used only in integrated gasification combined cycle (IGCC) power plants with CCS (carbon capture and sequestration). As for all other power generation technologies, the electricity production based on bio-energy with carbon capture and sequestration (BECCS) is governed by a Leontief type production func­tion as given below (Rose et al. 2012):

ELbeccs _ тІП {bbeccs Fel, wbio’SbeccsCCSwbio’VbeccsOMbeccs’hbeccskbeccs } (12.1)

where 0(^beccs(1 is an efficiency parameter that determines the amount of biomass which is measured in units of energy as needed to generate 1 kWh of BECCS elec­tricity. The demand of woody biomass is then formulated as:

F:i, wbio = b ELbeccs (12.2)

beccs

CCSwbi0 is the storage capacity needed to sequester CO2 from BECCS. The total amount of carbon dioxide removed and stored depends mainly on the carbon con­tent of woody biomass, denoted by ®wbio, and on the capture rate of power plant, which is denoted with e : CCS = e®wbioFwbio. By using the Eq. 12.2 it can be possibly

shown that = Bbeccs/ernbeccs. Henceforth, we generally omit the technology that

subscript when no ambiguity arises in the process. K measures the BECCS genera­tion capacity in units of power. q as an efficiency parameter which regulates the number of hours of operation of BECCS power plants. Power generation capacity grows in the following way as given below:

K(t +1,n) = (1 -8)K(t, n) + Iel (t, n)/ j (12.3)

where Iel are the investments in BECCS region n at time t, 8 is the depreciation rate of power plants and q> is the investment cost of BECCS generation capacity. Finally, the operation and maintenance costs (OM) are needed to run power plants and their demand is regulated by £ reluctantly.

If any country is a net importer of biomass, the BECCS power plants pay the cost for transporting biomass (TC), which is proportional to distance D from major production regions. The transportation cost is generally paid on the share of imported biomass of total consumption, denoted by у : у = 0 if the region is a net exporter, у = 1 if a region imports 100 % biomass. By denoting the interest rate of the economy with r, the cost of generating 1 unit of electricity with BECCS is thus equal to the equation given below:

where BECCS power generation firms to maximize the profits nEL = PeLEL — C(EL). The optimality conditions require that dC(EL*)/dEL* = pEL. Thus:

Pel — j p,.„ +b gTCD + s C„ (TCCS) + i + 2 (r + S)j (125)

The optimality conditions in the final good sector resembles that the marginal product of electricity is equal to its price. In particular, the optimal power mix depends on the relative convenience of the power technologies, i. e. j. Thus, the fol­lowing condition holds as: (9GY / 9ELbeccs) / (9GY / 9ELj) = pEL^ jpEL "j.