The Economics of Growing

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The Economics of Growing Crops for Energy
For further inquiries, please contact Christina
Iacobelli BBI Biofuels Canada, 701 - 30 Duke St
W, Kitchener, Ontario, N2H 3W5 Phone
519-513-0522 (direct) 519-576-4500
(office) Email ciacobelli_at_bbiinternational.com

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BBI Background

• Leading bioenergy consulting company in North
  
• America with more than 200 renewable energy
  projects
• completed in the last five years
• Expertise in ethanol and biodiesel production
  from
• conventional sources.
• Expertise in emerging technologies for the
  production
• of ethanol and biodiesel from various
  feedstocks
• Expertise in anaerobic digestion project
  development

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BBI Background

• Complete Engineering and Consulting Services
• - Feasibility studies, site, feedstock and
  resource assessments
• - Business Plans and market analyses
• - Technology assessment and selection
• - Equity drives and project financing
• Owners engineering representative
• Bank engineer representative and project due
  diligence
• Strategic planning
• Economic impact studies
• Industry surveys

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(NREL, 2008)
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First Generation Biofuels
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First Generation Biofuels
Canola, Rapeseed
Corn
Barley, Oats
Soy
Wheat
Tallow
Fermentation
Transesterification
Potatoes
Sorghum
Palm Oil
Sunflower Oil
Waste grease
Sugar Cane, Sugar Beets
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First Generation Biofuels
Ex. Ethanol Dry Milling Process
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First Generation Biofuels
Ex. Conventional Biodiesel Process
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Feedstock Properties

• Properties of feedstocks to consider
• Ethanol
• Sugar/starch content
• Viscosity
• Content of pentosans (wheat)
• Degree of abraisiveness (barley)
• Density (transportation)

• Biodiesel
• Oil yields
• FFA content
• Fatty acid profile (i.e.
• composition of fatty esters,
• including palmitic, stearic, oleic,
• linoleic, and linolenic acids that
• are found in fats and oils)

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Pros Cons

• Pros
• Simple and well-known production
• methods
• Familiar feedstocks
• Scalable to production capacities
• Easily blended with existing
• petroleum-derived fuels
• Experience with commercial
• production and use in several
• countries

• Cons
• Feedstocks compete directly with
• crops grown for food
• Production by-products need markets
• Low land-use efficiency
• Modest net reductions in fossil fuel
• use and greenhouse gas emissions
• with current processing methods

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Economic Issues

• Choice of feedstock linked to type of process
  technology
• Feedstock prices make up 75 of operational
  costs (or greater)
• General rule to utilize feedstocks in close
  proximity to production in
• order to minimize transportation costs (i.e.
  truck and rail costs)
• Flexible front ends process water and
  co-products will differ with
• feedstock type
• High input costs for pesticides, fertilizers,
  and irrigation methods

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Second Generation Biofuels
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Second Generation Biofuels

• Points to consider
• Utilization of renewable lignocellulosic
  feedstocks
• Takes advantage of non-food crops and biomass
  sources eliminates
• competition for food and feed
• Processing can be carried out biochemically or
  thermochemically, depending on
• feedstock being used
• Types of biomass resources include forestry
  sources, agricultural residues
• corn stover, cereal straws, pulp and paper,
  dedicated energy crops.

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Second Generation Biofuels

• 1. Biochemical Conversion
• Pretreatment ? Hydrolysis ? Fermentation
• Feedstocks typically used cellulosic feedstocks
  with low levels of lignin
• Key economic issues
• Lower feedstock costs than traditional ethanol
  crops
• Lignin extracted may be used as a source of
  power
• However,
• High cost for enzymes, microbes
• Higher capital costs than traditional
  fermentation method

(Microbial)
(Enzymatic, acidic)
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Second Generation Biofuels

• 2a. Thermochemical Conversion Gasification
• Organic carbon ?
  Syngas (CO, H2) ? Biofuels
• Feedstocks typically used cellulosic feedstocks
  with high levels of lignin
• Key economic issues
• Lower feedstock costs than traditional ethanol
  crops
• Lignin extracted may be converted to biofuels
• However,
• Higher costs due to high T/P necessary for
  gasification
• Equipment costs (i.e. use of fluidized bed due
  to high ash content of biomass)
• High capital cost due to slow fermentation
  time/conversion of syngas into ethanol

Ex. F-T synthesis
Heat, O2
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Second Generation Biofuels

• 2b. Thermochemical Conversion Pyrolysis
• Organic matter ? Bio-oil ? Biofuels
• Feedstocks typically used cellulosic feedstocks
  with higher levels of lignin
• Key economic issues
• Lower feedstock costs than traditional ethanol
  crops
• However,
• Cost to further treat bio-oil
• Cost of equipment for storage, fluidized bed

Treatment, Purification
Thermal Degradation
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Second Generation Biofuels

• 3. Hydrogenation of First Generation Feedstocks
  Green Diesel
• Oils ? (Isomerization) ? Green
  Diesel
• Feedstocks typically used first generation fats
  and oils
• Key economic issues
• High capital costs for hydrotreating unit
• Hydrogen supply a large expense
• Cost issues arise when commodities are high

Hydrotreatment
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Second Generation Biofuels

• 4. Algae
• Algae CO2 Nutrients ?
  Biofuels
• Feedstocks typically used common strains used
  include Chlorella, Dunaliella
• Key economic issues
• Photobioreactors vs open-raceways vs closed
  raceways
• Able to make use of marginal land
• Able to produce almost 20 times the amount of
  oil per hectare in comparison
• to agricultural crops
• However,
• De-watering, harvesting costs
• CO2 supply, unless coupling
• Source of sunlight (PBR)

Fermentation
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Second Generation Biofuels

• 5. Dedicated Energy Crops Miscanthus, Hyprid
  Poplar, Willow, Switchgrass
• Key economic issues
• Able to make use of marginal land
• Perennials low maintenance, low input costs
• However,
• Lack of government incentives/crop insurance
• Process technology economic limitations

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Maximize the Co-product Market

• Ethanol Wet-milling Process
• Starch ? high fructose corn syrup
• Wet distillers grains ? animal feed
• Gluten meal, gluten feed ? animal feed
• Corn oil ? food, biodiesel
• Ethanol Dry-milling Process
• Dried distillers grains ? animal feed
• Stillage ? biogas, electricity, fertilizer
• Fractionation ? oil, protein, fibre, starch

• Cellulosic Ethanol
• Lignin ? energy, biofuels
• Biodiesel
• Glycerine ? crude, refined

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Conclusions

• Rising costs of petroleum-derived fuels have
  fostered
• the need for alternative fuels
• Sustainable energy feedstocks have economic,
  social
• and sustainable benefits
• Canada has a vast supply of renewable resources
• Head towards a future of carbon-neutrality

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Conclusions
Thank you! Christina Iacobelli BBI Biofuels
Canada 701 - 30 Duke St West Kitchener,
Ontario N2H 3W5 Phone [phone] Email
ciacobelli_at_bbiinternational.com