This paper deals with the energy production and economics of a large-scale biomass-based combined heat and power (CHP) plant. An activity-based costing model was developed for estimating the production costs of the heat and power of the bio-CHP. A 100 MW plant (58 MW heat, 29 MW electricity) was used as reference. The production process was divided into four stages: fuel handling, fluidized bed boiler, turbine plant, and flue gas cleaning. The boiler accounted for close to 50% of the production costs. The interest rates and the utilization rate of the CHP had a significant effect on the profitability. We found that below 4000–4500 h per year utilization, the electricity production turned unprofitable. However, the heat production remained profitable with high interest rate (10%) and a low utilization rate (4000 h). The profitability also depended on the type of biomass used. We found that, e.g. with moderate interest rates and high utilization rate of the plant, the bio-CHP plant could afford wood and Reed canary grass as fuel sources. Copyright © 2013 John Wiley & Sons, Ltd.
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