EXECUTIVE SUMMARY
5.2 BIOMASS ENERGY COSTS .1 Introduction
5.2.3 Biomass Energy Costs
T h e following graphs summarise biomass energy costs at returns o investment of 1 5 % (shaded bar) and 8.75% (unshaded bar).
Fig. 5.2.1 summarises the energy production costs of heat (high pressure steam) and electricity from direct combustion of biomass. Steam from standard boilers using Wellons technology is produced at between $7 and
$14 a GJ for the capacity range 10-50MW plant. P o w e r production from a gratefired/condensing turbine system at 10MW capacity can t produced from between 7cents and 11 cents a kWhe.
T h e energy prices of electricity and heat production (cogeneration) fro biomass using small and large scale gasification technologies are shown Fig. 5.2.2. T h e prices from large scale plant, using the integrate gasification process with steam injected gas turbines are shown for 5 M W e , 53 M W e and H O M W e capacities over the biomass price range
$20 - $50 a dry tonne. Electricity prices, as expected, decrease wi capacity from 11 cents down to 3.5cents a kWh for the large scale plant Given that a small scale facility will most likely be constructed at a site low cost biomass supply (eg sawmill) prices for biomass have been tak in the range $15 down to zero cost a dry tonne. Using estimates of capicity and operating cost given for Australian small-scale technology being developed by B E S T , p o w e r costs in the range 0.5 M W e up to 4 M W e z expected to be between 9 and 3 cents a Kwhe.
Pyrolysis technology economics are shown in Fig. 5.2.3. Products that fall into the category of crude diesel oil biocrude or aromatic gasoline is produced in the price range 35cents to 85cents a litre, depending on 1 technology used.
T h e cost of production of hydrogen energy from biomass by gasificati is shown in Fig. 5.2.4. Whilst competitive with coal, the biomass co ($10-28 a G J ) are significantly higher than from natural gas ($5-8 a GJ, Methanol production costs from biomass are shown in Fig. 5.2.5. 1 figure shows, for comparison, the calculated production costs methanol from both natural gas and coal at typical capacities for the feedstocks. Whilst not competitive with natural gas, biomass methano the lower biomass costs (down to $5 a dry tonne) compare favours with coal. The costs of methanol from biomass between the resource costs of $100 and $5 a tonne range from 30cents to 75cents a li depending on the technology.
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BIOMASS IN THE ENERGY CYCLE
The prices derived from newly developed Hydrocarb technology and indirectly heated gasification indicate the potentials of those technical advances.
Biomass to ethanol production costs are shown in Fig. 5.2.6, ranging from the established starch and sugar processes to emerging lignocellulose technologies. Ethanol from starch and sugar substrates results in alcohol between 3 Scents and $1.15 a litre.
Grain to ethanol looks relatively attractive despite very high grain prices because of the value of animal feed by-product. By-product credits have also been included in the sugar tuber (beet scenario).
The price of ethanol from lignocellulose based on the existing state of development of the TVA dilute and concentrated acid processes is surprisingly high, at between $1.15 and $1.90 a litre. TVA indicate that they are developing a more efficient technology with acid recycle and xylose fermentation. The NREL enzyme technology at its present state of development results in ethanol between 40cents and 75cents a litre.
Insufficient information was available to test the NREL process on innovations expected over the next few years. All ethanol from lignocellulose technologies have been calculated without by-product credits.
The price of liquid fuels from oil seeds are shown in Fig. 5.2.7 at both small and large scale capacity without animal feed cake by-product credits. The technology results in a high price of vegetable fuel oil of between $1.00 and $1.80 a litre.
The economics of esterified vegetable oils is heavily dependant on by- product credit contributions. Without by-products, esters will cost between $1.15 and $1.45 a litre. If markets are found for the glycerol by- product, the price drops significantly to between $1.00 and 65cents a litre at the market price of oil seeks of $800 a tonne. On a farm scale, vegetable oils can be produced for between 75 cents and $1.20 a litre assuming $50 a tonne for low quality oil seed.
The economics of energy production from wastes are shown in Figs.
5.2.8 and 5.2.9. Landfill gas will produce thermal energy under $1.40 a GJ if power is sold at between 3 and 7cents a kW from an attached cogeneration facility. If MSW is digested in custom made anaerobic digestion plant rather than landfill, the cost of energy will rise well above
$10 a GJ unless MSW disposal credits approach the $70 a tonne at the same range of electricity prices. The new gasification process for MSW being developed by Southern Californian Edison will produce gas at between $2.3 and $8.5 a GJ assuming present disposal credits of $40 a tonne. However at $70 a tonne, the price drops to between $1.8 and $5.1 a GJ.
The Neutralysis process will only produce power competitively at MSW disposal credits of $100 a tonne.
Biogas from industry and animal wastes will produce heat at less than $5 a GJ if credits can be realised from fertiliser sales and waste disposal
BIOMASS IN THE ENERGY CYCLE
company would have a cost of capital of 8.75% on company funds employed, ie the company requires to earn a notional after tax return of 8.75% prior to debt financing to satisfy debt providers and ordinary shareholders.
(ii) A 15% discount rate has also been used in the model to reflect a level of risk about current operations of that mature company, or another company, that may be required to induce the investor to invest in such a project as compared with other alternative projects. The model can calculate on any discount rate.
5.2.3 Biomass Energy Costs
The following graphs summarise biomass energy costs at returns on investment of 15% (shaded bar) and 8.75% (unshaded bar).
Fig. 5.2.1 summarises the energy production costs of heat (high pressure steam) and electricity from direct combustion of biomass. Steam from standard boilers using Wellons technology is produced at between $7 and
$14 a GJ for the capacity range 10-50MW plant. Power production from a gratefired/condensing turbine system at 10MW capacity can be produced from between 7cents and 11 cents a kWhe
The energy prices of electricity and heat production (cogeneration) from biomass using small and large scale gasification technologies are shown in Fig. 5.2.2. The prices from large scale plant, using the integrated gasification process with steam injected gas turbines are shown for 5.4 MWe, 53 MWe and llOMWe capacities over the biomass price range
$20 - $50 a dry tonne. Electricity prices, as expected, decrease with capacity from 11 cents down to 3.5 cents a kWh for the large scale plant Given that a small scale facility will most likely be constructed at a site of low cost biomass supply (eg sawmill) prices for biomass have been taken in the range $15 down to zero cost a dry tonne. Using estimates of capital and operating cost given for Australian small-scale technology being developed by BEST, power costs in the range 0.5 MWe up to 4MWe are expected to be between 9 and 3cents a Kwhe.
Pyrolysis technology economics are shown in Fig. 5.2.3. Products that fall into the category of crude diesel oil biocrude or aromatic gasoline are produced in the price range 35 cents to 85 cents a litre, depending on the technology used.
The cost of production of hydrogen energy from biomass by gasification is shown in Fig. 5.2.4. Whilst competitive with coal, the biomass costs ($10-28 a GJ) are significantly higher than from natural gas ($5-8 a GJ).
Methanol production costs from biomass are shown in Fig. 5.2.5. The figure shows, for comparison, the calculated production costs of methanol from both natural gas and coal at typical capacities for those feedstocks. Whilst not competitive with natural gas, biomass methanol at the lower biomass costs (down to $5 a dry tonne) compare favourably with coal. The costs of methanol from biomass between the resource costs of $100 and $5 a tonne range from 30cents to 75cents a litre, depending on the technology.
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BIOMASS IN THE ENERGY CYCLE
The prices derived from newly developed Hydrocarb technology and indirectly heated gasification indicate the potentials of those technical advances.
Biomass to ethanol production costs are shown in Fig. 5.2.6, ranging from the established starch and sugar processes to emerging lignocellulose technologies. Ethanol from starch and sugar substrates results in alcohol between 35cents and $1.15 a litre.
Grain to ethanol looks relatively attractive despite very high grain prices because of the value of animal feed by-product. By-product credits have also been included in the sugar tuber (beet scenario).
The price of ethanol from lignocellulose based on the existing state of development of the TVA dilute and concentrated acid processes is surprisingly high, at between $1.15 and $1.90 a litre. TVA indicate that they are developing a more efficient technology with acid recycle and xylose fermentation. The NREL enzyme technology at its present state of development results in ethanol between 40cents and 75cents a litre.
Insufficient information was available to test the NREL process on innovations expected over the next few years. All ethanol from lignocellulose technologies have been calculated without by-product credits.
The price of liquid fuels from oil seeds are shown in Fig. 5.2.7 at both small and large scale capacity without animal feed cake by-product credits. The technology results in a high price of vegetable fuel oil of between $1.00 and $1.80 a litre.
The economics of esterified vegetable oils is heavily dependant on by- product credit contributions. Without by-products, esters will cost between $1.15 and $1.45 a litre. If markets are found for the glycerol by- product, the price drops significantly to between $1 00 and 65 cents a litre at the market price of oil seeks of $800 a tonne. On a farm scale, vegetable oils can be produced for between 75cents and $1.20 a litre assuming $50 a tonne for low quality oil seed.
The economics of energy production from wastes are shown in Figs.
5.2.8 and 5.2.9. Landfill gas will produce thermal energy under $1.40 a GJ if power is sold at between 3 and 7cents a kW from an attached cogeneration facility. If MSW is digested in custom made anaerobic digestion plant rather than landfill, the cost of energy will rise well above
$10 a GJ unless MSW disposal credits approach the $70 a tonne at the same range of electricity prices. The new gasification process for MSW being developed by Southern Califomian Edison will produce gas at between $2.3 and $8.5 a GJ assuming present disposal credits of $40 a tonne. However at $70 a tonne, the price drops to between $1.8 and $5.1 a GJ.
The Neutralysis process will only produce power competitively at MSW disposal credits of $100 a tonne.
Biogas from industry and animal wastes will produce heat at less than $5 a GJ if credits can be realised from fertiliser sales and waste disposal
BIOMASS IN THE ENERGY CYCLE
costs and power is sold at between 3 and 7cents a Whe. Small scale biogas plant for animals sized for around 50 head of cattle looks particularly attractive.
Fig. 5.2.10 shows the economics of oxygenate production from biomass derived ethanol and methanol for in-refinery and grass roots sites. In- refinery costs lie between 75cents and $1.05 a litre, whilst large scale plant using mixed butanes at a greenfield site will result in a cost range 35cents - 70cents a litre.
Initial estimation of the cost of producing furans from biomass in the newly developed CSIRO process indicate a furan price of between 40cents and 60cents a litre in a very tight price range
5.2.4 S u m m a r y
Energy production costs from biomass for various technologies at small and large capacities and a range of raw material prices have been calculated at two rates of investment to provide a relative measure of attractiveness.
These have been summarised on Table 5.2.1
Sensitivities are apparent to the return on investment required and raw material prices and or by-product opportunity.
The calculations serve as a basis for the selection process, both for the biomass-to-energy technologies and the biomass resources.
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I BIOMASS IN THE ENERGY CYCLE
TABLE 5.2.1 : Summary of Biomass Energy Production Costs