Biomass Use at Dry-Grind Ethanol Plants: Less Greenhouse Gases...

Doug Tiffany January 15, 2009

Biomass Use at Dry-Grind Ethanol Plants: Less Greenhouse Gases and More Profits

Douglas G. TiffanyUniversity of MinnesotaAdv. Biomass Energy WorkshopW.C. Research and Outreach Ctr.University of Minnesota MorrisJanuary 15, 2009

http://www.umn.edu/


Biomass as a Fuel for Dry-Grind Ethanol Plants

• Reduce energy costs, Improve ROR--$$$• Generate reliable power for the grid• Improve Renewable Energy Ratio

– Defined as: Energy Out / Fossil Energy In• Lower the overall greenhouse gas

emissions from ethanol production


Project ObjectivesDetermine Technical Feasibility of Using Biomass to Provide

Process Heat and Electricity at Ethanol Plants

Determine Economic Sensitivity of Using Biomass with Appropriate Technologies under Various Economic Conditions

http://www.xcelenergy.com/


1. First performed technical analysis:- biomass characterization- emissions control standards,- modified Aspen Plus model developed by USDA

A.R.S. to estimation of machine capacities for specific technology bundles using biomass

2. Capital Costs estimated by AMEC.3. Spreadsheets predict ROI when using biomass

fuels in dry-grind ethanol plants for technology bundles.

4. Sensitivity analysis of key variables was conducted.

Technical Analysis Followed by Economic Analysis


3 Biomass Fuels 3 Levels of Intensity of Use

• Corn Stover Combusted in Fluidized Bed• DDGS Gasified in Fluidized Bed• Syrup + Stover Combusted in Fluidized Bed

• Process Heat• Combined Heat and Power (CHP)• CHP + Sales of Power to the Grid

Doug Tiffany January 15, 2009D. G. Tiffany U of Minnesota 6

Biomass Fuels Can Work Like NG and Purchased Electricity

• Grind bushel of corn (56 lb.), add water, make mash, cook to kill bacteria, expose starch

• Add enzymes for flow & to convert starch to sugar• Introduce Yeasts in Batch Fermenters---- produce

beer• Products:

– ethanol– (2.75 gal.) requires heat to distill– DDGS- (17 lbs.) generally requires drying – CO2-- ( 17 lbs. ) food grade

• 150 bushel corn yields 405 gallons of ethanol per acre and 2700 pounds of DDGS


Syrup + Stover-Level #1


Syrup & Corn Stover Combustion: Electricity Balance, 50 MMgal/yr

-8-6-4-202468

1012141618

ProcessHeat

CHP CHP + Grid

MWe

Elec. from Grid

Renewable Elec. to Grid

Renewable Elec. Used


Biomass Fuel Use (Wet Basis)50 MMgal/yr

0

100

200

300

400

500

600

700

800

900

1,000

Process Heat CHP CHP + Grid

Combust CornStoverCombust Syrup &Corn StoverGasify DDGS


Syrup & Corn Stover Combustion: Fuel Use (Wet Basis) 50 MMgal/yr

0

100

200

300

400

500

600

700

800

900

1,000

Process Heat CHP CHP + Grid

Tons

/ D

ay Syrup

Corn Sto


Renewable Energy Ratio (LHV)

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

Conventional Process Heat CHP CHP + Grid

Ratio

Corn StoverCombustion

Syrup & Corn StoverCombustion

DDGS Gasification

Conventional


Establishing Baseline Assumptions


Biomass Has Costs• Opportunity Costs as Feed,

Bedding, or Soil Enhancer • Procurement Costs• Transportation• Storage• Handling• Emissions• Ash Disposal• However----, reliable, well-located supplies• Stover Baseline at $80 / Ton (densified)


Ethanol Prices at the Plant Approaches BTU substitute level plus Blenders Credit of $.51/ gallon

• Ethanol prices used to have a premium of $0.25 over the wholesale price of gasoline, but now trades as a BTU substitute and subject to RFS targets.

Refiners Wholesale Ethanol Price IndicatedAcquisition Gasoline as BTU substitute

Cost $/Barrel Price $/Gallon* with VEETC of $.45/gal 40 1.20 1.25

50 1.49 1.4460 1.78 1.6370 2.07 1.8380 2.36 2.0290 2.65 2.21

100 2.94 2.41110 3.23 2.60120 3.52 2.80130 3.81 2.99140 4.10 3.18

*Wholesale price of Regular gasoline = $0.036 + $0.029(Price of Crude oil/bbl)Source: McCullough, Robert and Daniel Etra. When Farmers Outperform Sheiks: Why Adding Ethanol to the U.S. Fuel

Mix Makes Sense. McCullough Research, Portland, Oregon, April, 2005, 12pp


Valuable Incentive: California’s Low Carbon Fuel Standard

• Lower carbon intensity of fuels for passenger vehicles 10% by 2020 in grams of carbon emitted per BTU used. (LCA)

• Replace 20% of on-road gasoline with lower-carbon fuels

• Already using higher blends• Goal of producing more biofuels

in CA


Indirect Land Use Changes— Contentious Issue

• Discussion spurred by two papers published in Science:– Farigione et al. ---”Carbon Debt”– Searchinger et al.”Indirect Land Use Change”

What are the levels of GHG emissions associated with land conversion, especially in foreign lands if more grain production is directed toward biofuels production?


Well to Wheels Greenhouse Gas Emissions Changes by Fuel Ethanol Relative to Gasoline

Source: Wang, Wu and Huo, Environmental Research Letters 2 (2007)

3%

-18% -19%

-36% -39%

-52%

-86%

-100%

-90%

-80%

-70%

-60%

-50%

-40%

-30%

-20%

-10%

0%

10%Coal

Coal + WetDGS

Current NG +Elect. NG & Syrup DDGS Biomass

CellulosicEtOH

Perc

ent o

f Gas

olin

e


Estimating Value of LCFS Premium• Ethanol produced using biomass for process heat

and electricity emits 3X less GHG than conventional.• One gallon of ethanol produced using biomass fuel

substitutes for three conventional gallons. • The shipping cost of two gallons to California (or

elsewhere) can be saved.• The premium for California delivery could be $.40-

$.50 per gallon of biomass-processed ethanol based on current shipping costs of $.20-$.25 per gallon.

• LCFS premium for CHP was assumed to be $.20 per gallon under baseline conditions.


Additional Capital Costs• Installed Estimates by AMEC with escalation

and contingency factors applied – Biomass Handling, Storage– Biomass Combustion Equipment– Electrical Generator– Emissions Control Equipment – Ash Handling, Processing Equipment

• Capital Costs are higher than conventional– Process Heat------- + 21 - 31%– CHP ------ + 34 - 45%– CHP with Sales to the Grid------ + 50 – 60%


Baseline--Revenue Gains / Cost Savings• Reduced Natural Gas Purchases• Reduced Electricity Purchases• Maximum Premium for “Low Carbon” Ethanol

Produced ($.20) per gallon• Sales of Nutrients in Ash of 0-18-28 ($200/T.)• Sale of Renewable Electricity to the Grid

($.06/KWH)• Credit for Renewable Electricity of ($.02 /KWH)• More Valuable DDG product without solubles (10%

premium assumed)


Additional Operating Costs with Biomass

• DDGS is assumed at 80% of corn price on per Ton basis ($100 per Ton at baseline).

• Biomass Costs of $80 per delivered ton include:– Procurement Activities for Corn Stover– Drying of Corn Stover / DDGS before Storage or Use– Densification of Stover for Transportation & Handling– Storage of Biomass

• Additional Labor and Maintenance at Plant• Use of Limestone for Sulfur Capture @ $25/T.• Use of Ammonia to reduce NOx @ $700/T.


Key Baseline Assumptions

• $1.60 per gallon Netback Ethanol Price• $3.50 per bushel Corn Price• $100.00 per T. DDGS Price• $7.00 per Decatherm Natural Gas Price• $80.00 per Ton delivered cost of Stover• $.06 per kWh Electricity Price• $.20 Max. Premium- Low Carbon Fuel Std.


Baseline ROI’s for 50 MM Gallon PlantConventional Plant #1 Proc. Heat #2 CHP #3 CHP + Grid 50MM Gal

Stov 3.66% 5.40% 5.97% 4.21% StoverSyrup + Stover 8.04% 7.80% 6.05% Syrup + StoverDDGS 6.25% 7.28% 5.79% DDGSSyrup + Nat. Gas 4.76% 3.64% Syrup + Nat. Gas

Rates of Return on Investment for 50 MM Gal. Dry-Grind Plants: Conventional Plants versus those Using Stover or Syrup + Stover or

DDGS at Various Intensities

0.00%

5.00%

10.00%

15.00%

ConventionalPlant

#1 Proc. Heat #2 CHP #3 CHP + Grid

Perc

ent R

ate

of R

etur

n

Stover Syrup + Stover DDGS


Years to Payback at Baseline

Years to Payback Additional InvestmentConventional Plant #1 Proc. Heat #2 CHP #3 CHP + Grid 50MM Gal

Not Applicable 9.6 9.7 19.9 Stover3.9 5.5 9.7 Syrup + Stover6.5 6.3 10.4 DDGS

****Years to Payback Are Highly Dependent on NG prices and Ethanol Margins


Natural Gas Rises from $7.00 to $10.00 per Decatherm

Conventional Plant #1 Proc. Heat #2 CHP #3 CHP + Grid 50MM Gal

Stov -1.67% 5.40% 5.97% 4.21% StoverSyrup + Stover 8.04% 7.80% 6.05% Syrup + StoverDDGS 6.25% 7.28% 5.79% DDGSSyrup + Nat. Gas 3.25% 1.69% Syrup + Nat. Gas



0.00%

5.00%

10.00%

15.00%

ConventionalPlant


Perc

ent R

ate

of R

etur

n



DDGS Price Rises from $100 to $120 per Ton Corn stays constant at $3.50/ bu. baseline

Rates of Return on Investment for 50 MM Gal. Dry-Grind Plants: Conventional Plants versus those Using Stover or Syrup + Stover

or DDGS at Various Intensities

0.00%

5.00%

10.00%

15.00%

ConventionalPlant


Perc

ent R

ate

of R

etur

n



Corn rises from $3.50 to $4.00/ bu DDGS rises from $100 to $120/ T. Ethanol rises from $1.60-$1.90/gal



0.00%

5.00%

10.00%

15.00%

ConventionalPlant


Perc

ent R

ate

of R

etur

n



Low Carbon Premium Rises from $.20 to $.27/Gal. Rates of Return on Investment for 50 MM Gal. Dry-Grind Plants: Conventional Plants versus those Using Stover or Syrup + Stover


0.00%

5.00%

10.00%

15.00%

ConventionalPlant


Perc

ent R

ate

of R

etur

n



Low Carbon Premium Falls from $.20 to $.13/Gal. Rates of Return on Investment for 50 MM Gal. Dry-Grind Plants: Conventional Plants versus those Using Stover or Syrup + Stover


0.00%

5.00%

10.00%

15.00%

ConventionalPlant


Perc

ent R

ate

of R

etur

n



Stover Price Rises from $80 to $100 per Ton Rates of Return on Investment for 50 MM Gal. Dry-Grind Plants:

Conventional Plants versus those Using Stover or Syrup + Stover or DDGS at Various Intensities

0.00%

5.00%

10.00%

15.00%

ConventionalPlant


Perc

ent R

ate

of R

etur

n



Stover Price Drops from $80 to $60 per Ton Rates of Return on Investment for 50 MM Gal. Dry-Grind Plants:

Conventional Plants versus those Using Stover or Syrup + Stover or DDGS at Various Intensities

0.00%

5.00%

10.00%

15.00%

ConventionalPlant


Perc

ent R

ate

of R

etur

n



Electricity: Sale of Net Power Price Rises from $.06 to $.10/KWH



0.00%

5.00%

10.00%

15.00%

ConventionalPlant


Perc

ent R

ate

of R

etur

n



Electricity: Sell-all Production @ $.10/kWh Buy-all Needs @ $.06/kWh

0%

5%

10%

15%

ConventionalPlant


Perc

ent R

ate

of R

etur

n



Corn Price Rises from $3.50 to $4.00/ bu. DDGS Price Rises from $100 to $120/ T.


Stov -2.40% 1.44% 2.47% 1.04% StoverSyrup + Stover 2.88% 3.22% 1.93% Syrup + StoverDDGS 0.43% 1.71% 0.39% DDGSSyrup + Nat. Gas -0.50% -1.04% Syrup + Nat. Gas



0.00%

5.00%

10.00%

15.00%

ConventionalPlant


Perc

ent R

ate

of R

etur

n



IMPROVED BREAKEVENS WITH BIOMASS

• Q: How High Can Corn and DDGS Prices Rise with a Biomass Case Still Breaking Even?

• A: Corn @$4.28,DDGS @$123.33 for (Syrup+Stover CHP)

• Q: How much money would the 50 MM gallon conventional plant lose at those prices?

A: $8,270,588 per year (-7.35% ROI)


Multiple Factors: N.G. $7 to $10 / dcth DDGS $100 to $80/T. Corn steady @ $3.50/bu.


Stov -5.12% 3.14% 3.97% 2.41% StoverSyrup + Stover 6.45% 6.39% 4.78% Syrup + StoverDDGS 5.52% 6.93% 5.79% DDGSSyrup + Nat. Gas 1.63% 0.25% Syrup + Nat. Gas



0.00%

5.00%

10.00%

15.00%

ConventionalPlant


Perc

ent R

ate

of R

etur

n



Use of Biomass at Ethanol Plants• Technically feasible and fiscally prudent,

especially when policies favoring low carbon fuel standards are adopted.

• Improves energy balance and drastically reduces the carbon footprint of ethanol produced from corn.

• Each 1 Billion gallons of ethanol capacity can produce 300 MWe for the grid, probably 600 MWe for IGCC.

• Use of biomass as a fuel at ethanol plants can be a bridge technology to other technologies for biofuels production.

• Expect more fractionation technologies to enhance feed attributes and segregate cellulose for further processing


Existing and Potential Improvements for Corn Dry-Grind Ethanol Production

TechnologyGHG

Reduction1

Cumulative GHG

ReductionCumulative

Value2, $/gallonNatural gas with DDGS 30 to 45% 30 to 45% $0.22 to $0.34

Biomass CHP 30 to 35% 60 to 80% $0.45 to $0.60Electricity to Grid 30 to 50% 90 to 130% $0.67 to $0.97

Nitrogen Fertilizer from 5% 95 to 135% $0.71 to $1.00

Sequester Fermentation CO2 35 to 40% 130 to 175% $0.97 to $1.30

2 Cumulative value of GHG reduction based on a CO2 price of $100/metric ton.

1 Percent lifecycle greenhouse gas (GHG) reduction compared to gasoline for equivalent energy content (MJ or BTU). The reference for lifecycle GHG for gasoline is 93 g CO2e/MJ.

Doug Tiffany January 15, 2009D. G. Tiffany U of Minnesota 42

Documenting GHG Reductions for Ethanol Production Using LCA

• Adam Liska, U of Nebraska-Lincoln team developed BESS model.

• Documents GHG emissions on a lifecycle basis

• 60-80% of GHG emitted at biorefinery

• 20-40% of GHG emitted at field• GHG equivalencies:

– CO2--------- 1– CH4--------- 25– N2O---------298

Website: www.bess.unl.edu


Related Research Efforts• Comparing Economics of Densification

Technologies, especially roll-press briquettes and corncobs

• Analyzing the Economics of Using Biomass in IGCC--doubling the electrical output to the grid.


/

Thanks!! Please Check our Website

www.biomassCHPethanol.umn.edu

• Acknowledgement• This is a product of work supported by a grant entitled “Generating Electricity with Biomass Fuels at

Ethanol Plants” funded by the Xcel Energy Renewable Development Fund. More information can be found at the project website: www.biomassCHPethanol.umn.edu

http://www.biomasschpethanol.umn.edu/

http://www.biomasschpethanol.umn.edu/

Biomass Use at Dry-Grind Ethanol Plants: Less Greenhouse Gases...

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