There has been a growing interest in utilizing forest biomass for energy generation in district heating systems to reduce dependence on fossil fuels. However, variability in forest biomass availability and quality over time and its complex and costly supply chain have made investments in forest biomass energy generation projects less attractive. In this paper, a linear programming model is developed to minimize the delivery cost of forest biomass to the gate of heating plants and determine the optimal monthly flow of biomass to the plants. The model has a 1-year planning horizon with monthly time steps. It determines (1) the amount of woodchips that should be transported to the plants from supply sources directly and through the terminal storages, (2) the amount of biomass that should be stored at supply sources and at terminal storages, and (3) the amount of biomass that should be chipped at supply sources and at terminal storages. The model was applied to a potential district heating system in Williams Lake, BC, Canada. The results of the optimization model indicated that it would not be economical to carry out the chipping process at the terminal storage. Biomass should be chipped at supply sources, and woodchips should be sent to the terminal storage and/or directly to the plant. Of the total optimum annual flow of woodchips to the plant, 90% is transported directly, while 10% is transported to the plant via the terminal storage. It would cost $43.38 Odt⁻¹ to deliver forest biomass to the plant. Copyright © 2013 John Wiley & Sons, Ltd.

According to the optimal solution, it would not be economical to carry out the chipping process at the terminal storage. Biomass should be chipped at source points, and woodchips should be sent to the terminal storage and/or directly to the district heating plant. Of the total annual flow of woodchips to the plant, 90% is transported directly, while 10% is transported via the terminal storage. It would cost $43.38 Odt⁻¹ to deliver forest biomass feedstock to the plant.