Current Status of Renewable Energy Mike Montross Biosystems and Agricultural Engineering Department University of Kentucky

2/21 Outline Current Sources of Energy Liquid Fuel Replacement –Ethanol Electricity Replacement –Co-firing –Solar –Wind Biomass Feedstocks

3/21 Sources and End Uses of Energy (Quadrillion Btu) US Energy Information Administration

4/21 What Will Change Status of Renewable Energy? Regulations/mandates –Renewable Fuels Standard –Renewable Portfolio Standard –Carbon/Greenhouse Gases –Changes in environmental regulations on mining/oil/gas extraction Cost of alternative fuels ($/ton, $/mmbtu, $/kWh or $/gal)

5/21 Other Issues Driving Renewable Energy Environmental quality National security Underutilized agricultural production Rural development Balance of trade Increased tax revenue for states/cities

6/21 Outline Sources of Energy Liquid Fuel Replacement –Ethanol Electricity Replacement –Co-firing –Solar –Wind Biomass Feedstocks

7/21 Potential Legislation Renewable Fuels Standard –Renewable Biofuels (Starch – corn, wheat, milo, and barley) 15 billion gallons by 2015 Production capacity from corn at almost 12 billion gallons today, with probable expansion to 15 billion gallons –Advanced Biofuels 21 billion gallons by 2022 (16 billion cellulosic, 5 billion undifferentiated including biodiesel) Less than 1 billion gallons developed or under development DOE has provided over 900 million dollars (soon to be announced)

8/21 Ethanol Feedstocks Starch (corn, wheat, barley, milo) Sugar (sweet sorghum, sugarcane, sugar beets) Cellulose (plant material)

9/21 Wholesale Costs of Liquid Fuels Fuel Cost ($/gal)Commodity PriceFeedstock Cost ($/gal) Gasoline3.50 (July 08)$145/barrel (Nov 09)$76/barrel1.80 Ethanol2.90 (July 08)$7.00/bu (Nov 09)$3.75/bu1.35 Ethanol On Equal Energy Basis 3.90 (July 08) (Nov 09)1.80 No taxes, credits, etc. considered Pricing data from EIA and US Agricultural Marketing Service

10/21 Estimated Costs of Ethanol Corn BasedCellulosic Today?-- Illustrative Cellulosic DOE target 2.75g/bu 60g/dt 90g/dt By-Product-$0.38-$0.10-$0.09 Enzymes$0.04$0.40$0.10 Other Costs**$0.62$0.80$0.22 Capital Cost$0.20$0.55$0.54 Total$1.65$2.65$1.10 Keith Collins, USDA Chief Economist, 2007 ** (includes preprocessing, fermentation, labor)

11/21 Outline Sources of Energy Liquid Fuel Replacement –Ethanol Electricity Replacement –Co-firing –Solar –Wind Biomass Feedstocks

12/21 Potential Regulations Renewable Portfolio Standard –30 states mandate some type of RPS Ranges up to 25% –5 states have voluntary goals including Kentucky at 1000 MW –Federal legislation introduced and under debate could establish an RPS of 25% by 2025

13/21 Costs of Alternative Sources of Power SourceAnnual Capital Cost (¢/kWh) O&M (¢/kWh) Electricity Cost (¢/kWh) Scrubbed Coal Coal with Sequestration Biomass Solar PV Wind EIA - Cost and Performance Characteristics of New Central Station Electricity Generating Technologies Solar and wind based on 50% load factor

14/21 Wind Potential

15/21 Payback of Solar Systems

16/21 Energy Cost ($/mmbtu) of Biomass and Fossil Fuels SourceNovember 2009December 2008 Natural gas Coal Biomass Prices from Kentucky Energy Watch (coal and natural gas) Southern Illinois USDA Agricultural Marketing Report on Utility Grass Hay

17/21 Outline Sources of Energy Liquid Fuel Replacement –Ethanol Electricity Replacement –Co-firing –Solar –Wind Biomass Feedstocks

18/21 Biomass Feedstocks for Energy Production Unused residues from traditional timber harvest –Thinning Short rotation woody crops Urban residues Herbaceous energy crops Agricultural residues What feedstock is cheapest to produce and deliver to an end-user

19/21 Biomass Required to Meet Federal Legislation RPS 15%13.0 million tons 20%18.2 million tons 25%22.0 million tons RFS10.0 million tons Total Biomass23 to 32 million tons

20/21 Kentucky Land Resources (ac) PasturelandOther Farmland Private Forestland Total Land West750,0002,400,0001,400,0004,600,000 Central1,600,0002,700,0002,100,0006,300,000 East250,000910,0004,070,0005,200,000 Total2,600,0005,900,0007,600,00016,200,000 Ignore cropland – if you can raise row crops you will continue With advances in bioenergy crop yields and proper incentives – Kentucky could be a major player

21/21 Closing Remarks Renewable energy will play a future role –Energy independence, balance of trade, rural development –Cap and trade legislation –Mining/gas/oil extraction changes Cost still an issue Co-firing probably more likely than cellulosic ethanol Kentucky has a large land base that could be developed for renewable energy production

22/21 Anaerobic Digestion Large systems in Europe (primarily Germany) Numerous farm installations Wet feedstocks