Logistics management and costs of biomass fuel supply

Discusses part of a project conducted by the authors into the logistics planning and management and costs of supplying biomass fuels to biomass-fired power stations in the UK. Defines biomass fuels and the reasons for the growth in interest in their use for electricity generation. The activities and parties involved in the biomass fuel supply chain are discussed together with the management of the chain in order to achieve smooth and consistent flow of biomass fuel to power stations. Explains the approach used to modelling the delivered costs of biomass fuels for four types of biomass fuel included in the project: forest fuel, short rotation coppice, straw and miscanthus. Comments are given on the environmental impacts of the fuel supply chains. The results indicate that straw supply systems are capable of producing the lowest delivered costs of the four fuels studied. Short rotation coppice and miscanthus, two new energy crops, are likely to have the highest delivered costs at present. This is due to the cost of growing these fuels and the financial incentives required by farmers to persuade them to grow these crops. Logistics costs (i.e. transport, storage and handling) are shown to represent a significant proportion of total delivered cost in biomass supply. Careful supply chain planning and logistics management will be of central importance to the success of the biomass industry.

Risk under performance-based contracting in the UK construction sector

As a method of procuring the services of the built environment, performance-based contracting (PBC) seeks to link the building supplier to longer term commitments than has traditionally been the case in the construction sector. By rewarding the building producer according to the way that building or structure delivers the users' requirements, rather than according to a list of assembled parts, a number of additional risks are taken by contractors, including fitness for purpose, costs and briefing. The extent to which contractors recognize these risks and their methods of dealing with them vary considerably and are influenced by their attitudes towards risk. As the risks associated with PBC are seen as large, uninsurable, and vulnerable to changing client requirements, the majority of respondents would reject the use of PBC as a method of contracting. Nevertheless, PBC may be used under particular conditions, where rewards are deemed sufficient to compensate for the additional risk to the contractor of undertaking work on the basis of a stream of payments paid over the life of a structure depending on the satisfactory performance of the building or as part of a private finance initiative.