**6. Economical Biomass Potential**

Several studies identify the economical biomass potential as an indicative value based on literature but do not include any measures of electricity production cost or return rates or the production of electricity of other energy types. Fung et al. (2002) mention a 3.4 TWh per year electricity potential from wood processing residues in Australia. According to Raison (2006), this potential lies 2.8 TWh per year based on dry forest biomass. Farine et al. (2012) estimate a 13 TWh energy potential and is the most recent published value based on forest biomass.

The only study in Australia effectively measuring the economical biomass potential compared to the electricity generation cost of biomass powered system with a coal-fired generation in a case study [76]. The research estimated the Levelized Electricity Cost (LEC) using a 30-year facility life and an annual interest rate r of 7.5%. The following formula was established:

$$\text{LEC} = \frac{\sum\_{\mathbf{t}=1}^{\mathbf{n}} \frac{\mathbf{l}\_{\mathbf{t}} + \mathbf{M}\_{\mathbf{t}} + \mathbf{F}\_{\mathbf{t}}}{\left(1 + \mathbf{r}\right)^{\mathbf{t}}}}{\sum\_{\mathbf{t}=1}^{\mathbf{n}} \frac{\mathbf{E}\_{\mathbf{t}}}{\left(1 + \mathbf{r}\right)^{\mathbf{t}}}},\tag{1}$$

where *It* represents the initial investment for a direct combustion biomass electricity facility and Mt represents the maintenance and operating costs (excluding biomass purchase). The feedstock expenditure Ft is estimated based on the plant gate price of the feedstock multiplied by the amount of biomass required to run the plant, and finally, *Et* is the amount of electricity generated every year.

There are no literature examples on optimization or simulations of the forest biomass supply or value chain that indicate electricity production cost for a bioenergy system in Australia. In the future, there could be the potential to establish costs associated with reductions of GHG emissions and costs associated with social benefits. Thus far, no studies in Australia were able to capture these costs in their methods.
