Leveraging Supply Chain Partnerships to Lower Biomass Costs

February 15, 2023

The world is moving away from fossil fuels for electricity generation. While this is a good thing that needs all the encouragement the world can muster, it isn’t an easy feat to accomplish. Of the various options available, very few hold much promise like biomass.¬†However, it’s not as simple as it may seem. Switching from a logistics and supply chain that was used to the likes of coal to biomass takes time and deliberate effort to fully develop. That means the costs currently associated with biomass are higher than fossil fuels, but there’s a way around it.

Demand is Going Up

We’re witnessing concerted efforts by governments and regulators to get both new and existing industry players to switch to biomass for electricity production. Although this process takes time, the aspect of increasing demand must be borne in mind. As more players switch to and enter into electricity production by biomass, more products are becoming necessary to support these operations. 

This implies that industry players need new levels and types of infrastructure development. The framework is quite different from those of fossil fuels, and may place some companies at a disadvantage. A good example is bulk storage. Depending on the type of biomass a company chooses to work with, it may take quite some time before they develop the requisite infrastructure to store and process the raw material.

What you can do, instead, is focus on the production and work with a third-party logistics partner for storage and transportation. This strategy ensures you focus on leveling up your core business as you keep upfront costs to a minimum. 

Delivery of Large Volumes

To maintain steady electricity production throughout the year, your biomass facility needs to secure a constant supply of your preferred biomass. Traditionally, this translates to developing an operational arm that focuses on the sourcing and supply of the needed volumes to keep your operations afloat. 

Establishing such an outfit may take time and expertise that you don’t have, as well as money that you could spend elsewhere. A competent company exists out there with detailed information about the biomass you intend to work with. The first step is to partner with them and learn from their knowledge. 

The second part of this strategy is partnering with a third-party logistics provider. They will be responsible for receiving shipments of your choice biomass, storing them, and confirming they get to your production facility on time and on budget. You’ll never have to worry about developing all areas that concern your operations. With key partnerships, you will all benefit from each other’s prowess. 

The Timing Has to Be Right

It’s a common sight for new areas in business to attract players hoping to strike it big. This isn’t always the case, as the early adopters have learned as much as possible to go with the ebb and flow. For someone who joins the fray late, there’d be very little they can do to beat the more established players. 

That’s why timing is crucial. Even though it is tempting to try and control every aspect of your operation, it can be too late for you to do something of note. However, you can still thrive. The key to succeeding, again, is making the right partnerships. For instance, the largest biomass players at the moment tend to be forest product companies.

They’ve been in the industry for decades, but they don’t know much about power production in the same way you do; that’s your opportunity as an energy player. Rather than struggle to evolve your biomass supply chain, form partnerships with forest product companies to have a steady source of biomass. This keeps you from reinventing the wheel by attempting to plant your forest.

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