- The Browning of Biofuels: The Political Economy of Policy Failure
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- Societal Benefits of Biofuels in Europe
- Societal benefits of biofuels
- Economic Effects of Biofuel Production
Edited by Alexander Kokorin.
Edited by Theophanides Theophile. Edited by Kresimir Delac. Edited by Sergey Mikhailov. Published: August 29th DOI: Iji and Mohammad Reza Barekatain Open access peer-reviewed 2. Mabiki Open access peer-reviewed Wortmann and Teshome Regassa Open access peer-reviewed Does Money Grow on Trees? Cecilia Damiani Open access peer-reviewed Levin Edited Volume and chapters are indexed in. Open access peer-reviewed 1. Open access peer-reviewed 2. Open access peer-reviewed 3. Open access peer-reviewed 4.
Open access peer-reviewed 5. Open access peer-reviewed 6. Open access peer-reviewed 7. Open access peer-reviewed 8. Open access peer-reviewed 9. As shown in the right hand side of Figure , WTP for sawtimber is typically much higher than the marginal cost of extracting the large stems. WTP for extracting pulpwood, however, is close to, or equal to, the marginal cost of extracting the pulp component of timber, and WTP for biomass material is less than the marginal cost of extracting the additional material.
NOTE: Sawtimber represents the largest part of the stump, up to about 9 inches in diameter. Pulpwood represents the rest of the stump up to 4 inches. The results presented so far have been the mean values over all 10, calculations. The values in Table provide a sensitivity range for the breakeven feedstock supply cost based on the parameter variation found in the literature. The cost estimates generated by the model are highly dependent on the assumptions used and the parameters considered.
The way costs are treated and the comprehensiveness of which economic costs are included in the biomass supply chain and in ethanol processing varies by study. For example, the U. Preliminary results indicate that much of the switchgrass would be produced on converted pasturelands that would have low opportunity costs. Handling, possibly drying, storing, and transporting low-density dry biomass to the biorefinery is a logistical challenge and costly see Chapter 6.
Another study by Khanna et al.
Again, these were comprehensive costs at the farm gate that included land opportunity costs and were developed for the low-cost scenario assuming the availability of CRP land on which to produce switchgrass and Miscanthus. The high-cost scenarios were higher than those reported for BioBreak above. Again, the costs reported from the Khanna et al. The biomass cost estimates derived using the BioBreak model are typically higher than most similar studies because the model is inclusive of all economic costs including opportunity costs of land involved in producing, harvesting, storing, and delivering the last dry ton of biomass to the biofuel processing facility through the biomass supply chain.
Likewise, the biomass conversion costs account for all long-run costs in processing biomass to ethanol and include coproduct returns from a biorefinery of given capacity.
The Browning of Biofuels: The Political Economy of Policy Failure
Finally, most studies assume biomass production costs are independent of crude oil prices; however, there are two factors that cause biomass production costs to increase as crude oil prices increase. First, part of the variability in crude price is due to the value of the dollar relative to other currencies. This same effect has been shown to influence crop prices Abbott et al.
Any increase in crude price caused by a devalued dollar would also increase opportunity costs for the land and fuel-based biomass production costs. It would also raise the demand for biofuels. Second, a portion of the cost of harvest, transportation, and nutrient replacement is related to the cost of fossil fuels. This concurrent increase in biomass cost would increase the apparent crude price at which biofuels would become cost competitive.
- The Browning of Biofuels: The Political Economy of Policy Failure.
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- The impact of EU biofuels production policies on developing countries.
- Regularity and Substructures of Hom (Frontiers in Mathematics)!
As mentioned earlier, along with the cost of harvesting and transporting biomass to a biorefinery is the cost of converting it into fuel. No commercial-scale facilities currently exist for the production of liquid fuels from cellulosic biomass.
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The conversion cost data used in the BioBreak analysis are based on laboratory or pilot-scale performance information and estimated investment and operating cost data for an optimized nth biorefinery that uses biochemical conversion of corn stover to ethanol Aden et al. A recent report by Anex et al. Because the three technologies produce fuels with different energy contents, the results are presented in terms of gallons of gasoline equivalent. See Table in Chapter 1.
The study was based on a consistent biorefinery size of 2, dry tons per day of corn stover. All capital and operating costs are referenced to The only significant products from the biorefinery are the liquid fuel and electricity or gaseous fuel generated from the unconverted biomass. A required selling price for the liquid fuel is calculated to give a percent discounted cash flow rate of return on a fully equity-financed project with a year life. The Anex et al.
The gasification and F-T economics in Anex et al.
Societal Benefits of Biofuels in Europe
Two cases were evaluated: A high-temperature HT , entrained flow, slagging gasification system and a lower temperature, fluidized bed, non-slagging gasification system. The HT system produces more fuel per ton of biomass, but its capital cost is higher. Overall cost to produce is slightly lower for the HT case because of the higher liquid yield. Biomass gasification has been attempted by several groups at. Operational difficulties have been encountered, but the gasification and F-T technology are well established for coal.
Therefore, the cost data and yields for the gasification and F-T scheme can be considered reasonably reliable once the operational difficulties are overcome. The fast pyrolysis economics are based on Wright et al. Fast pyrolysis of biomass for fuel production is a relatively new technology with little published information on yields, potential operational problems, or required equipment. The process uses equipment that is common in the petroleum refining industry, such as hydroprocessing, hydrocracking, hydrogen production, and high-temperature solids circulation similar to the fluid catalytic cracking process.
Kior, a privately funded company that is developing catalytic pyrolysis technology, submitted a Form S-1 to the U. Securities and Exchanges Commission Kior, that contained additional information on capital requirements and overall yields. The technology and equipment proposed by Kior are similar to that used in the Wright et al. The capital costs included in Wright et al. Although the boiler and turbogenerator represent a large capital investment, they are required to recover the energy contained in the nonliquid products as in the case of ethanol biorefineries.
The Kior capital estimate is for a first-of-its-kind facility and its current usage is closer to an nth plant than a pioneer plant, but it is based on a fully developed cost estimate prepared by a major engineering company. In contrast, Wright et al. When adjusted to the same feed rate using a 0.
Societal benefits of biofuels
Wright et al. The cases reported by Wright et al. The raw pyrolysis oil has to be hydrotreated before it can be used as a fuel. The two cases in Wright et al. In the first case, part of the pyrolysis oil is used as feedstock to an on-site hydrogen plant to produce hydrogen. In the second case, hydrogen is purchased from an off-site plant that uses natural gas to produce the hydrogen.
Producing hydrogen on site from bio-oil product lowers the liquid yield and increases the capital cost for the project. The pertinent information from the published studies is summarized in Table along with a calculation of the number of biorefineries and capital investment required, the number of acres of land necessary to produce the biomass assuming all biomass for bioenergy comes from dedicated bioenergy crops , and the annual subsidies that would be required to support the industry at various crude oil prices. However, pyrolysis still requires substantial research and development before it is economically viable without subsidies.
The three crude prices used in Table to calculate subsidies are from the three crude price scenarios for listed in the Annual Energy Outlook EIA, a. Only the high crude price scenario eliminates the need for subsidies to support a biofuel industry. All other price scenarios require either subsidies for the biofuel industry or additional taxes on petroleum products to narrow the price gap between petroleum fuels and biofuel. Figure shows a graphical breakdown of the production costs.
Economic Effects of Biofuel Production
The capital-related costs in Figure include the average depreciation and the assumed percent return on investment for the year life of the project. In the discounted cash flow analysis used to develop these costs, the capital charges are higher in the early years of the project and decline throughout the life of the project. The per-gallon, capital-related operating costs are determined by dividing this average annual effective cost of capital depreciation plus return on investment by the annual fuel production.
The annual effective cost of capital varies from 12 to 14 percent of the total capital investment for the various projects. Another way of defining these costs is to assume they are an effective capital recovery factor for the capital investment. This range of capital recovery factors would give an effective rate of return of about 12 percent for a year project. The percent after-tax rate of return used in these studies is probably on the low side of returns that would be required to attract capital for a new, high-risk project.
The economics also assume that the project is fully equity financed. None of these projects has yet to be demonstrated commercially, implying that they are high-risk investments. High-risk investments usually require higher returns or leveraging borrowing of capital to reduce the risk. Either of these would increase the effective cost of capital for at least the early projects, so the total production cost numbers are probably low.