Biomass penetration analysis

In order to perform a market penetration analysis, a framework of energy product demands and market price projections in which the biomass-derived products compete must be assumed. For each of the markets under consideration, an overall energy demand sets the size of the available market open to the biomass products. A projection of the alternative (nonbiomass) fuel market price also is given as an estimate of the competitive environment... 

The market penetration analysis uses an iterative process that converges toward equilibrium biomass supply/demand/price conditions. Sup-ply/demand/price equilibrium is defined here as the situation in which the production price of the biomass feedstocks is at the levels necessary to match the supplies of feedstocks with the demands for them. Figure I is a flow diagram of the procedure. 

Figure 2, Logic used in biomass product penetration analysis...

The results of the penetration analysis provide estimates of the expected market penetration (in quads) of each mission by region and time interval. The expected demands for each type of feedstock and the equilibrium marginal prices for biomass feedstocks and products are also determined. 

The basic steps followed in the product penetration assessment are presented in Figure II. This procedure first entails a static economic analysis based on the competition between the biomass-derived product price and the market price. The resuit is a steady-state market share, reflecting a situation that would be expected to exist after a period during which the competitive economic forces remained constant. Steady-state conditions do not hold soon after the introduction of a new, cost-competitive mission, technology, or product. The marketplace will be in a state of flux as the newcomer gains wider recognition and acceptance. 

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