Regional Differences in the Economic Feasibility of Advanced Biorefineries: Fast Pyrolysis and Hydroprocessing

Date
2013-06-01
Authors
Hu, Guiping
Brown, Tristan
Thilakaratne, Rajeeva
Brown, Robert
Brown, Robert
Hu, Guiping
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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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<p>NOTICE: This is the author's versions of a work that was accepted for publication in Energy Policy. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Energy Policy, 57, June (2013): doi: <a href="http://dx.doi.org.10.1016/j.enpol.2013.01.058" target="_blank">10.1016/j.enpol.2013.01.058</a>.</p>
Keywords
fast pyrolysis, techno-economic analysis, regional sensitivity, Bioeconomy Institute, Mechanical Engineering
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