Economic Analysis of Alternative Lignocelluloses Sources for Ethanol Production Agriculture as a Producer and Consumer of Energy Conference Washington,

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Presentation transcript:

Economic Analysis of Alternative Lignocelluloses Sources for Ethanol Production Agriculture as a Producer and Consumer of Energy Conference Washington, DC June 24, 2004 David P. Anderson, Joe L. Outlaw, Brian K. Herbst, Steven L. Klose, and Mark Holtzapple

Outline of Presentation Overview Processes Methodology Results Lignocellulose

Overview Began as Ethanol Feasibility Research in Texas –Corn, sorghum, obvious feedstock issues Branched Out Into Broader Biomass Definitions Broader Definitions of Outputs –Chemical industry much like petroleum industry Need for Economic Analysis of Alternatives

Processes Grain Ethanol –Standard dry grind plant Lignocellulosic Ethanol –Whole plant, many potential sources –Tree trimmings, etc –Based on work by Mark Holtzapple –Pilot plant in operation today

Methodology Simulation Modeling –Risk analysis Probability of Outcomes Capital Budgets Stochastic Variables –Input and output prices MVE Distribution –Reflects historical distribution of prices –Maintains historical correlation of variables

Assumptions 30 MMGY Production Plant 93 Gal. Per Ton of Feedstock 3 Levels of Investment: $20, $40, $60 Mil. Feedstock Conversion Rate Held Constant –Assumed no increased efficiency

Comparison of Lignocellulosic and Grain Ethanol Variable Costs LignocellulosesFeed Grain Lime/Denaturant Inhibitor/Enzymes Hydrogen/Chemicals Natural Gas Electricity Steam/Maint. Materials Cooling Water/ Misc. Costs Labor Administrative Cost Total variable cost/gal (excluding feedstock) * Feedstock costs are $0.53 for lignocellulose and $0.79 for grain.

Comparing the Net Cash Income for the 30 MMGY Lignocelluloses Plant and the 30 MMGY Feed Grain Plant

Comparing the Ending Cash for the 30 MMGY Lignocellulose Plant and the 30 MMGY Feed Grain Plant

Comparing the Real Net Worth for the 30 MMGY Lignocelluloses Plant and the 30 MMGY Feed Grain Plant

Conclusions Lignocellulosic Plant Has: –Higher NCI, EC, RNW –Reduced probability of negative outcomes More Potential for Lignocellulosic Production Highlights Importance of Risk Analysis