Costs and Benefits of Ethanol Production

The production cost of ethanol must be low for it to be competitive with other existing fuels on the market. Presently, the competition comes from methyl tertiary butyl ether (MTBE) in gasoline blend, but in time the target for comparison will shift. Fluctuation in the prices of other energy sources makes it difficult to predict the future of

Figure 4 Waterloo fast pyrolysis and fermentation process. From So and Brown (1999).
Table 6 Capital cost investment comparisons

Fast pyrolysis

SSF

Acid hydrolysis

Capital cost

Capital cost

Plant areas

(millions dollars)

Plant areas

(millions dollars)

Plant areas

Capital cost (millions dollars)

WFPP

12

Pretreatment

16

Hydrolysis

2

Fermentor

22

Pentose fermentor

4

Fermentor

27

Cellulase production

2

SSF

16

Ethanol recovery

11

Ethanol recovery

3

Ethanol recovery

14

Utilities

12

Utilities

12

Utilities

12

Off-site tankage

3

Off-site tankage

3

Off-site tankage

3

Fixed capital

60

Fixed capital

56

Fixed capital

58

Working capital

9

Working capital

8

Working capital

9

Total capital

69

Total capital

64

Total capital

67

Source: So and Brown (1999).

Source: So and Brown (1999).

bioethanol. Although from time to time the government may provide tax incentives to jump-start an interest in renewable energy resources—which in practice is synonymous with ethanol from biomass, the production process must be inherently competitive for it to be sustained in the long run. Table 8 shows a study of ethanol production in California. It gives the price of different feedstocks at near-term and midterm operation at a large scale. The target price takes into account the operating costs, the debt, and return on investment. The target price decreases from near-term to mid-term, as the technology improves and forces down the production cost. Even when the cellulosic feedstock is inexpensive, conversion into ethanol may be costly. Cellulase enzymes cost 45 cents/gal of ethanol and are, therefore, too expensive at the commercial level.

The critical factors that contribute to the cost of ethanol are summarized below.

(a) The cost of collected feedstock such as municipal and commercial wastes must be low. Thus, the production facilities should be located near the source of biomass material. Furthermore, we can cross the break-even point easier with higher cellulose content in the municipal and commercial wastes. (b) Ideally, the production site should be close to the consumption site to minimize shipping. Ethanol absorbs moisture very quickly and attacks rust spots in the transportation system. This attack provokes corrosion along the distribution system. (c) Because feedstock constitutes a major fraction of the overall cost, we must efficiently utilize not just cellulose but all components in the feedstock, especially xylose and lignin. This is especially true for

Table 7 Operating cost comparison with cost figures expressed in millions of 1997 US$

Fast pyrolysis

SSF

Acid hydrolysis

Total capital

69

64

67

Annual operating cost

Wood

11.09

11.25

11.03

Steam

1.15

- 4.50

- 2.95

Electricity

1.20

1.37

1.25

Operating labor

0.27

0.58

0.30

Supervisory

0.04

0.09

0.05

Maintenance and repair

3.52

3.36

3.48

Indirect operating costsa

3.67

3.64

3.58

General expensesb

4.40

3.49

3.63

Annual capital Charge

13.80

12.80

1334

Total annual operating costs

39.21

32.09

33.70

Production cost of ethanol ($/gal)

1.57

1.28

1.35

Source: So and Brown (1999).

a Indirect operating costs include overhead, local taxes, and insurance.

b General expenses include administrative, distribution, selling, research, and developments costs.

Source: So and Brown (1999).

a Indirect operating costs include overhead, local taxes, and insurance.

b General expenses include administrative, distribution, selling, research, and developments costs.

Table 8 Assumed feedstock cost, ethanol production yields, ethanol prices from cellulose based biomass

Time frame

Near-term

Mid-term

Feedstock price ($/BDT)

Forest material

36

38

Agricultural residue

24

26

Waste paper

- 10

- 10

Ethanol yield (gal/BDT)

Forest material

69.3

77.4

Agricultural material

62.4

64

Waste paper

74.4

81.7

Target ethanol price ($/gal)

Forest material

1.73

1.23

Agricultural residue

1.69

1.24

Waste paper

1.64

1.39

Source: California Energy Commission

2001.

feedstock derived from forest

and agricultural

residues.

Furthermore, unutilized residues incur a disposal cost. Strain improvement and recycling of residuals move us closer toward fulfilling this goal. (d) For processes that depend on fungi-derived cellulase for cellulose degradation, the cost of the enzyme must be dramatically reduced. Other commercially viable processes that utilize cellulase (e.g., stone-washed jean in textile processing) deal with high-valued products and require only partial hydrolysis. In contrast, ethanol production from cellulose deals with bulk commodity products and requires nearly complete hydrolysis. Thus, relative to the price of the product, the cost of cellulase looms high. Advances in biotechnology and genetically engineered organisms offer possible solutions to lower prices for the enzymes. (e) For processes that utilize acid for cellulose degradation, acid poses a significant cost. Thus, recovering acid and separating sugars efficiently and inexpensively become critical. Advances in separation and membrane technologies should help.

There are several major issues that reach beyond the simple economics in evaluating the future of bioethanol. From the national security standpoint, heavy dependence on imported oil restricts our options in dealing with international matters. Bioethanol should be an integral part of an overall picture showing other forms of energy: natural gas, coal, nuclear, hydroelectric, and, of course, oil. Energy diversity and flexibility is a prudent course that the government should be encouraged to take. Energy plays a central role in the economic health of a society. Finally, production of ethanol from biomass impacts both positively and negatively on the environment. Thinning forests to reduce the risk of wildfires generates biomass as the feedstock to ethanol production. By reducing the number of trees, the severity of wildfires will be reduced; so will the concomitant emission of hydrocarbons and carbon monoxide generated by the fires. When blended with gasoline, ethanol reduces the various harmful emissions:

CO, NOx, and volatile organic carbons. We also envision a future where biomass-derived products (ethanol, acetic acid, acetone, etc.) become significant raw materials for chemical processing industries (California Energy Commission 2001).

Organic Gardeners Composting

Organic Gardeners Composting

Have you always wanted to grow your own vegetables but didn't know what to do? Here are the best tips on how to become a true and envied organic gardner.

Get My Free Ebook


Post a comment