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Regional differences in the economic feasibility of advanced biorefineries: Fast pyrolysis and hydroprocessing

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  • Brown, Tristan R.
  • Thilakaratne, Rajeeva
  • Brown, Robert C.
  • Hu, Guiping

Abstract

This analysis identifies the sensitivity of the fast pyrolysis and hydroprocessing pathway to facility location. The economic feasibility of a 2000 metric ton per day fast pyrolysis and hydroprocessing biorefinery is quantified based on 30 different state-specific facility locations within the United States. We calculate the 20-year internal rate of return (IRR) and net present value (NPV) for each location scenario as a function of state- and region-specific factors. This analysis demonstrates that biorefinery IRR and NPV are very sensitive to bio-oil yield, feedstock cost, location capital cost factor, and transportation fuel market value. The IRRs and NPVs generated for each scenario vary widely as a result, ranging from a low of 7.4% and −$79.5 million in Illinois to a high of 17.2% and $165.5 million in Georgia. The results indicate that the economic feasibility of the fast pyrolysis and hydroprocessing pathway is strongly influenced by facility location within the United States. This result could have important implications for cellulosic biofuel commercialization under the revised Renewable Fuel Standard.

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  • Brown, Tristan R. & Thilakaratne, Rajeeva & Brown, Robert C. & Hu, Guiping, 2013. "Regional differences in the economic feasibility of advanced biorefineries: Fast pyrolysis and hydroprocessing," Energy Policy, Elsevier, vol. 57(C), pages 234-243.
    • Handle: RePEc:eee:enepol:v:57:y:2013:i:c:p:234-243
    DOI: 10.1016/j.enpol.2013.01.058
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    3. Kudakasseril Kurian, Jiby & Raveendran Nair, Gopu & Hussain, Abid & Vijaya Raghavan, G.S., 2013. "Feedstocks, logistics and pre-treatment processes for sustainable lignocellulosic biorefineries: A comprehensive review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 25(C), pages 205-219.
    4. Braimakis, Konstantinos & Atsonios, Konstantinos & Panopoulos, Kyriakos D. & Karellas, Sotirios & Kakaras, Emmanuel, 2014. "Economic evaluation of decentralized pyrolysis for the production of bio-oil as an energy carrier for improved logistics towards a large centralized gasification plant," Renewable and Sustainable Energy Reviews, Elsevier, vol. 35(C), pages 57-72.
    5. McCarty, Tanner & Sesmero, Juan, 2014. "Uncertainty, Irreversibility, And Investment In Second-Generation Biofuels," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170604, Agricultural and Applied Economics Association.
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    7. Witcover, Julie, 2021. "What Happened and Will Happen with Biofuels? Review and Prospects for Non-Conventional Biofuels in California and the U.S.: Supply, Cost, and Potential GHG Reductions," Institute of Transportation Studies, Working Paper Series qt7624q040, Institute of Transportation Studies, UC Davis.
    8. Fulton, Lew & Morrison, Geoff & Parker, Nathan & Witcover, Julie & Sperling, Dan, 2014. "Three Routes Forward For Biofuels: Incremental, Transitional, and Leapfrog," Institute of Transportation Studies, Working Paper Series qt3pp0g4fb, Institute of Transportation Studies, UC Davis.
    9. Sesmero, Juan & McCarty, Tanner, 2014. "Cost Effectiveness of Alternative Policies to Induce Investment in Cellulosic Biofuels," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170598, Agricultural and Applied Economics Association.

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