Biomedical Engineering Reference
In-Depth Information
Table 19.1 Comparative economics for cellulosic ethanol production
Biochemical
Thermochemical
MESP
a
$2.15/gallon
$2.05/gallon
Ethanol yield
79.0 gal/dry ton
83.8 gal/dry ton
Delivered feedstock/cost
$58.50/dry ton (corn stover)
$61.57/dry ton (pine)
Total installed equipment cost
$232 MM
$296.5 MM
Total capital investment
$422.5 MM
$515.85MM
Average return on investment
56.6
57.5
Current yield (actual/theoretical)
76.0 %
40.0 %
a
MESP defined as a fully loaded production cost with a 10 % IRR
State of Industry
After rapid growth in the 2000s decade, further expansion of first-generation
ethanol technology has been fairly stagnant. Future growth in first-generation
ethanol production will most likely continue to be slow mainly due to concerns
about the percentages of the sugar and corn crop being directed to ethanol produc-
tion, true environmental benefits, as well as market saturation.
Many companies are proceeding forward with plans to commercially deploy
cellulosic ethanol in many parts of the world with several commercial production
plants in construction. Since pioneer plants or first-of-a-kind plants have higher
costs than mature nth plant cost, many countries such as the USA [
45
] have
incentives in place for the initial commercial production of cellulosic ethanol to
offset this initial higher cost.
An important point to make is that since the biofuels industry and especially the
cellulosic ethanol industry is in an immature state and as any immature industry, it
is highly dynamic and will change and evolve over time. For this reason, mention-
ing any companies' or organizations' plans is not that useful since it will quickly
become outdated. A review of the recent history of the biofuels industry from 2006
to 2012 clearly illustrates this point. In the 2006-2008 timeframe, driven by record
high prices for crude oil and aggressive government policies for biofuels develop-
ment and deployment, there was tremendous growth in the biofuels and bioproducts
sector with more than 135 companies [
46
] being active in the “second-generation”
biofuels space. This growth period continued until 2011-2012 where there has been
a consideration contraction of the industry. A specific illustrative example of this
point is that in the US public company valuations for 13s generation biofuels
companies are down more than 66 % in 2012 which translates into a $4B USD
decrease in value. Many companies have delayed or even shelved plans to proceed
forward with commercial plants leading to layoffs across the industry. Therefore,
the industry is clearly in a critical state where it can move on to a successful future
state or continue downward to an uncertain future. For the industry to be successful,
it must focus on sustainable value creation and learn from and move on from past
mistakes.
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