Biofuels are promoted in the United States through aggressive legislation, as one part of an overall strategy to lessen dependence on imported energy as well as to reduce the emissions of greenhouse gases (Office of the Biomass Program and Energy Efficiency and Renewable Energy, 2008). For example, the Energy Independence and Security Act of 2007 (EISA) mandates 36 billion gallons of renewable liquid transportation fuel in the U.S. marketplace by the year 2022 (U.S. Government, 2007). Meeting such large volumetric targets has prompted an unprecedented increase in funding for biofuels research.
The U.S. Department of Energy (DOE) is promoting the development of ethanol from lignocellulosic feedstocks as an alternative to conventional petroleum-based transportation fuels. DOE funds both fundamental and applied research in this area and needs a method for predicting cost benefits of many research proposals. To that end, the National Renewable Energy Laboratory (NREL) has modeled many potential process designs and estimated the economics of each process during the last 20 years. This report is an update of the ongoing process design and economic analyses at NREL. We envision updating this process design report at regular intervals; the purpose being to ensure that the process design incorporates all new data from NREL research, DOE funded research and other sources, and that the equipment costs are reasonable and consistent with good engineering practice for plants of this type. For the non-research areas this means using equipment and process approaches as they are currently used in industrial applications. For the last report 1, published in 1999, NREL performed a complete review and update of the process design and economic model for the biomass-to-ethanol process utilizing co-current dilute acid prehydrolysis with simultaneous saccharification (enzymatic) and co-fermentation. The process design included the core technologies being researched by the DOE: prehydrolysis, simultaneous saccharification and co-fermentation, and cellulase enzyme production. In addition, all ancillary areas feed handling, product recovery and purification, wastewater treatment (WWT), lignin combustor and boiler-turbogenerator and utilities were included. NREL engaged Delta-T Corporation (Delta-T) to assist in the process design evaluation, the process equipment costing, and overall plant integration. The process design and costing for the lignin combustor and boiler turbogenerator was reviewed by Reaction Engineering Inc.
A new addition to the growing biofuels resources list at AgMRC is a cellulosic ethanol feasibility template developed by agricultural economists at Oklahoma State University (OSU). The purpose of the spreadsheet-based template is to give users the opportunity to assess the economics of a commercial-scale plant using enzymatic hydrolysis methods to process cellulosic materials into ethanol. The OSU Cellulosic Ethanol Feasibility Template can be downloaded and modified by the user to mimic the basic operating parameters of a proposed ethanol plant under a variety of production conditions.
This article addresses development of the Illinois ethanol industry through the period 2007-2022, responding to the ethanol production mandates of the Renewable Fuel Standard by the U.S. Environmental Protection Agency. The planning for corn-based and cellulosic ethanol production requires integrated decisions on transportation, plant location, and capacity. The objective is to minimize the total system costs for transportation and processing of biomass, transportation of ethanol from refineries to the blending terminals and demand destinations, capital investment in refineries, and by-product credits. A multi-year transshipment and facility location model is presented to determine the optimal size and time to build each plant in the system, the amount of raw material processed by individual plants, and the distribution of bioenergy crops and ethanol.
This paper introduces a spatial bioeconomic model for study of potential cellulosic biomass supply at regional scale. By modeling the profitability of alternative crop production practices, it captures the opportunity cost of replacing current crops by cellulosic biomass crops. The model draws upon biophysical crop input-output coefficients, price and cost data, and spatial transportation costs in the context of profit maximization theory. Yields are simulated using temperature, precipitation and soil quality data with various commercial crops and potential new cellulosic biomass crops. Three types of alternative crop management scenarios are simulated by varying crop rotation, fertilization and tillage. The cost of transporting biomass to a specific demand location is obtained using road distances and bulk shipping costs from geographic information systems. The spatial mathematical programming model predicts the supply of biomass and implied environmental consequences for a landscape managed by representative, profit maximizing farmers. The model was applied and validated for simulation of cellulosic biomass supply in a 9-county region of southern Michigan. Results for 74 cropping systems simulated across 39 sub-watersheds show that crop residues are the first types of biomass to be supplied. Corn stover and wheat straw supply start at $21/Mg and $27/Mg delivered prices. Perennial bioenergy crops become profitable to produce when the delivered biomass price reaches $46/Mg for switchgrass, $118/Mg for grass mixes and $154/Mg for Miscanthus giganteus. The predicted effect of the USDA Biomass Conversion Assistance Program is to sharply reduce the minimum biomass price at which miscanthus would become profitable to supply. Compared to conventional crop production practices in the area, the EPIC-simulated environmental outcomes with crop residue removal include increased greenhouse gas emissions and reduced water quality through increased nutrient loss. By contrast, perennial cellulosic biomass crops reduced greenhouse gas emissions and improved water quality compared to current commercial cropping systems.
This paper examines the possibilities of breaking into the cellulosic ethanol market in south Louisiana via strategic feedstock choices and the leveraging of the area’s competitive advantages. A small plant strategy is devised whereby the first-mover problem might be solved, and several scenarios are tested using Net Present Value analysis.
When the lignocellulosic biofuels industry reaches maturity and many types of biomass sources become economically viable, management of multiple feedstock supplies – that vary in their yields, density (tons per unit area), harvest window, storage and seasonal costs, storage losses, transport distance to the production plant – will become increasingly important for the success of individual enterprises. The manager’s feedstock procurement problem is modeled as a multi-period sequence problem to account for dynamic management over time. The case is illustrated with a hypothetical 53 million annual US gallon cellulosic ethanol plant located in south west Kansas that requires approximately 700,000 metric dry tons of biomass. The problem is framed over 40 quarters (10 years), where the production manager minimizes cumulative costs by choosing the land acreage that has to be contracted with for corn stover collection, or dedicated energy production and the amount of biomass stored for off-season. The sensitivity of feedstock costs to changes in yield patterns, harvesting and transport costs, seasonal costs and the extent of area available for feedstock procurement are studied. The outputs of the model include expected feedstock cost and optimal mix of feedstocks used by the cellulosic ethanol plant every year. The problem is coded and solved using GAMS software. The analysis demonstrates how the feedstock choice affects the resulting raw material cost for cellulosic ethanol production, and how the optimal combination varies with two types of feedstocks (annual and perennial).
Understanding the Growth of the Cellulosic Ethanol Industry, D. Sandor and R. Wallace, National Renewable Energy Laboratory, S. Peterson The Peterson Group, Technical Report, NREL/TP-150-42120 April 2008
Ethanol production doubled in a very short period of time in the U.S. due to a combination of natural disasters, political tensions, and much more demand globally from petroleum. Responses to this expansion will span many sectors of society and the economy. As the Midwest gears up to rapidly add new ethanol manufacturing plants, the existing regional economy must accommodate the changes. There are issues for decision makers regarding existing agricultural activities, transportation and storage, regional economic impacts, the likelihood of growth in particular areas and decline in others, and the longer term economic, social, and environmental sustainability. Many of these issues will have to be considered and dealt with in a simultaneous fashion in a relatively short period of time. This chapter investigates sets of structural, industrial, and regional consequences associated with ethanol plant development in the Midwest, primarily, and in the nation, secondarily. The first section untangles the rhetoric of local and regional economic impact claims about biofuels. The second section describes the economic gains and offsets that may accrue to farmers, livestock feeding, and other agri-businesses as production of ethanol and byproducts increase. The last section discusses the near and longer term growth prospects for rural areas in the Midwest and the nation as they relate to biofuels production.