Course: BFM 101 Biofuels Fundamentals

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Infrastructure
The Chicken and Egg Dilemma

Storage and Transportation Costs
Storage and Transportation Costs

In most regions of the U.S. biomass materials are grown seasonally and must be stored for later use.  Ideally, biomass materials are stored such that decomposition (i.e., loss of carbon) and moisture content are controlled.  Ability to control feedstock quality during storage will depend on where storage occurs (in-field versus in-warehouse) and by whom (farmer versus warehouse company).

Compared to grains, cellulosic feedstock materials have a lower bulk density.  That is, on a per weight basis cellulosic materials take up greater volume of storage and transportation space than grains.  These characteristics make cellulosic materials more costly than grains to store, handle and transport.  Storage costs can be reduced through densification – the process of compressing biomass materials into pellets or bricks to increase bulk density.

Transportation of feedstocks is a major contributor to overall costs of bioenergy production.  Some estimates place 50% or more of cellulosic ethanol production costs as the result of feedstock transportation and handling.  To limit these costs conversion facilities locate where required feedstock is abundant. This results in an area surrounding a bioenergy conversion facility from which feedstock is acquired, often referred to as the “fuelshed” ( figure 4.8.)  Transportation costs push large-scale commercial conversion facilities against the economies of scale necessary to operate competitively and efficiently.  That is, in large projects that must go further and further distances to acquire needed biomass, the marginal costs of biomass transport can become greater than the marginal savings from use of larger equipment.

On the other hand, decentralized community-scale bioenergy projects, especially combined biomass heat and power, have the potential to source biomass locally with within transportation and other infrastructure costs.  However, community-scale facilities may not have sufficient volume of end product to generate the types of revenues necessary for satisfying investors.

Pre-treatment of biomass materials potentially reduces transportation costs.  Depending on the conversion technology, preprocessing could occur on-farm, at community-scale satellite facilities, or adjacent to large-scale conversion facilities. Transportation and storage logistics are likely to drive pretreatment technology choices and the location of pretreatment facilities.

Figure 4.8. Current and planned corn processing and ethanol plants in Iowa (10/26/06); stars mark the location of the processing facility and circles represent the area from which corn grain is likely acquired. Overlapping circles indicate potential competition for corn, and which may influence upward pressure on food and feed prices. (Wisner, 2007, Iowa State University.)

Storage and Distribution of Bioenergy End-Products

In addition to transportation and storage of feedstocks, storage and distribution of bioenergy end products (biopower, bioethanol, or biodiesel) also incur costs.  These energy end products must be moved from where they are produced to the consumer and the location of their use.  The logistics of energy distribution and infrastructure development present engineering and economic challenges:

- For biopower, new biomass burning facilities must be built or older coal-fired plants must be retrofitted with biomass boilers and added to the existing power grid.  New roads or railroads may be necessary to bring the necessary biomass to these facilities.
- Ethanol is incompatible with current fuel pipeline distribution systems and tank storage facilities.  Therefore construction of new infrastructure is necessary to accommodate the mandated volume of biofuels to be produced in the U.S. , contributing to overall costs of bioenergy.

Further economic analysis is necessary to better understand the cost trade-offs between scale and location of conversion facilities, feedstock preprocessing technologies and the scale and location of preprocessing facilities, and storage and transportation of end products.

Resources provided by the eXtension Farm Energy Community of Practice at http://www.extension.org/ag+energy

Infrastructure
The Chicken and Egg Dilemma