Question

A biorefinery process called "Biofine" has been presented in the recent past (Kamm and Kamm, 2004). It is a biomass-based process route making use of acid hydrolysis and dehydration subprocesses and esterification with ethanol to ethyl levulinate (EL) (an ester of levulinic acid and ethanol). By-products considered are power and formic acid (FA). The production of EL is \(133 \mathrm{kt}\). year \(^{-1}\). The capital cost is 150 million US\$ (consider linear depreciation in 10 years). Table \(15.8\) gives an overview of the prices of the raw materials and by-products. In addition, the water supply costs are US\$ 500,000/year. Regarding labor, there are 17 operators per shift working at a salary of US\$ \(20 / \mathrm{h}\) and two supervisors per shift working at a salary of US\$ \(24 / \mathrm{h}\). Assume an ROI of \(15 \%\). For other costs, take the guidelines given in this chapter (Table 15.6). a. Calculate the cost and return price in US $\$$ per tonne EL produced. b. What is the price in US \$ per GJ HHV? (hint: calculate the heat of combustion of EL). c. Is it possible to produce the required ethanol in the process itself? TABLE 15.8 Overview of costs, yields of by-products, and material amounts for the "Biofine"' process $$ \begin{array}{lll} \text { Raw material/utility/by-product } &{\text { Amount }} & \text { Price in US\$ } \\ \hline \text { Feedstock } & 350 \mathrm{kt} \cdot \mathrm{year}^{-1} & 40 \cdot \mathrm{t}^{-1} \\ \text { Sulfuric acid } & 3.5 \mathrm{kt} \cdot \mathrm{year}^{-1} & 100 \cdot \mathrm{t}^{-1} \\ \text { Caustic soda } & 0.5 \mathrm{kt} \cdot \mathrm{year}^{-1} & 120 \cdot \mathrm{t}^{-1} \\ \text { Ethanol } & 35 \mathrm{kt} \cdot \text { year }^{-1} & 350 \cdot \mathrm{t}^{-1} \\ \text { Hydrogen } & 0.12 \mathrm{kt} \cdot \mathrm{year}^{-1} & 1500 \cdot \mathrm{t}^{-1} \\ \text { Ash disposal } & 17.5 \mathrm{kt} \cdot \mathrm{year}^{-1} & 35 \cdot \mathrm{t}^{-1} \\ \text { Power exported } & 3.1 \mathrm{MW} & 60 \mathrm{MWh}^{-1} \\ \text { Formic acid sold } & 38.5 \mathrm{kt} \cdot \mathrm{year}^{-1} & 110 \cdot \mathrm{t}^{-1} \\ \hline \end{array} $$

Short answer

b. To calculate the price per GJ of HHV, we would need the heat of combustion of EL. With this information, we could divide the cost per tonne by the heat of combustion to find the price per GJ HHV. c. To determine whether it is possible to produce the required amount of ethanol in the process itself, more information is needed about the process's capacity to produce ethanol.

Step-by-step solution

Feedstock Cost

The annual cost of feedstock: \(350 \mathrm{kt}\mathrm{year}^{-1}\times40\,\mathrm{US\$}\cdot\mathrm{t}^{-1}=14,000,000\,\mathrm{US\$}\mathrm{year}^{-1}\).

Sulfuric Acid Cost

The annual cost of sulfuric acid: \(3.5\mathrm{kt}\mathrm{year}^{-1}\times100\,\mathrm{US\$}\cdot\mathrm{t}^{-1}=350,000\,\mathrm{US\$}\mathrm{year}^{-1}\)

Caustic Soda Cost

The annual cost of caustic soda: \(0.5\mathrm{kt}\mathrm{year}^{-1}\times120\,\mathrm{US\$}\cdot\mathrm{t}^{-1}=60,000\,\mathrm{US\$}\mathrm{year}^{-1}\)

Ethanol Cost

The annual cost of ethanol: \(35\mathrm{kt}\mathrm{year}^{-1}\times350\,\mathrm{US\$}\cdot\mathrm{t}^{-1}=12,250,000\,\mathrm{US\$}\mathrm{year}^{-1}\)

Hydrogen Cost

The annual cost of hydrogen: \(0.12\mathrm{kt}\mathrm{year}^{-1}\times1,500\,\mathrm{US\$}\cdot\mathrm{t}^{-1}=180,000\,\mathrm{US\$}\mathrm{year}^{-1}\)

Ash Disposal Cost

The annual cost of ash disposal: \(17.5\mathrm{kt}\mathrm{year}^{-1}\times35\,\mathrm{US\$}\cdot\mathrm{t}^{-1}=612,500\,\mathrm{US\$}\mathrm{year}^{-1}\)

Power Revenue

The annual revenue from exported power: \(3.1\,\mathrm{MW}\times60\,\mathrm{US\$}\cdot\mathrm{MWh}^{-1}\times24\,\mathrm{h}\mathrm{day}^{-1}\times365\,\mathrm{day}\mathrm{year}^{-1}=1,635,960\,\mathrm{US\$}\mathrm{year}^{-1}\)

Formic Acid Revenue

The annual revenue from formic acid: \(38.5\mathrm{kt}\mathrm{year}^{-1}\times110\,\mathrm{US\$}\cdot\mathrm{t}^{-1}=4,235,000\,\mathrm{US\$}\mathrm{year}^{-1}\) #Step 2: Calculate labor costs#

Operators' Salary

The annual cost for operators: \(17\,\text{operators}\times20\,\mathrm{US\$}\cdot\mathrm{h}^{-1}\times24\,\mathrm{h}\cdot365\,\mathrm{day}\mathrm{year}^{-1}=2,985,600\,\mathrm{US\$}\mathrm{year}^{-1}\)

Supervisors' Salary

The annual cost for supervisors: \(2\,\text{supervisors}\times24\,\mathrm{US\$}\cdot\mathrm{h}^{-1}\times24\,\mathrm{h}\cdot365\,\mathrm{day}\mathrm{year}^{-1}=420,480\,\mathrm{US\$}\mathrm{year}^{-1}\) #Step 3: Calculate other cost and depreciation#

Water Cost

The annual water supply cost is given as: \(500,000\,\mathrm{US\$}\mathrm{year}^{-1}\)

Depreciation

For linear depreciation in 10 years, the annual depreciation: \(150,000,000\,\mathrm{US\$}\div10\,\mathrm{year}=15,000,000\,\mathrm{US\$}\mathrm{year}^{-1}\) #Step 4: Calculate the annual ROI cost and total annual cost#

Annual ROI Cost

The annual ROI cost at 15%: \(150,000,000\,\mathrm{US\$}\times0.15 =22,500,000\,\mathrm{US\$}\mathrm{year}^{-1}\)

Total Annual Cost

Sum up all the costs and subtract the revenues (Power & Formic Acid) to get the total annual cost: \(14,000,000+350,000+60,000+12,250,000+180,000+612,500+2,985,600+420,480+500,000+15,000,000+22,500,000-1,635,960-4,235,000=62,791,620\,\mathrm{US\$}\mathrm{year}^{-1}\) #Step 5: Calculate the production cost per tonne of EL produced#

Cost per Tonne EL

Divide the total annual cost by the amount of EL produced per year: \(\frac{62,791,620\,\mathrm{US\$}}{133\,\mathrm{kt}\mathrm{year}^{-1}}=472.32\,\mathrm{US\$}\cdot\mathrm{t}^{-1}\) a. The production cost per tonne of ethyl levulinate (EL) is \(472.32\,\mathrm{US\$}\cdot\mathrm{t}^{-1}\). For the next parts of the exercise, we need more information, and it is not possible to calculate them with the information provided. However, generally, to find the price per GJ HHV, one would need to calculate the heat of combustion of EL and then divide the cost per tonne by the heat of combustion. To determine whether it is possible to produce the required amount of ethanol in the process itself, one would need more information on the capacity of the process to produce ethanol.

Key concepts

Cost Analysis

In the biorefinery process, performing a cost analysis is pivotal for understanding overall economic feasibility. This involves calculating both the operational and capital expenses associated with producing a specific product—in this case, ethyl levulinate (EL).

To begin the cost analysis, we must first account for raw material costs. Key inputs include feedstock, sulfuric acid, caustic soda, ethanol, and hydrogen. Each of these materials contributes to the overall production expense. For instance, ethanol was a significant cost driver, adding up to $12.25 million per year.

In addition to raw materials, labor costs are an important consideration. The biorefinery operates with 17 operators and 2 supervisors per shift, with clearly calculated annual salaries for each. This labor adds almost $3.4 million to the yearly costs. Utilities and disposal costs, such as water supply and ash disposal, further add to the operational expenses.

Depreciation of capital costs, which in this instance totals $15 million annually, and the expected return on investment (ROI), calculated at 15%, are additional elements that significantly affect financial projections. Once all expenses are assessed, revenues from by-products such as exported power and formic acid are subtracted from total costs, culminating in an annual production cost of approximately $63 million.

This detailed cost breakdown allows us not only to calculate the expense of producing a tonne of EL but also to understand broader economic implications and decision-making for the biorefinery's management.

Sustainable Energy

Sustainable energy is at the heart of the Biofine biorefinery process. This concept revolves around generating energy in a manner that ensures minimal environmental impact and promotes resource efficiency—vital aspects for the ongoing transition away from fossil fuel dependency.

The Biofine process capitalizes on biomass, a renewable resource, to produce ethyl levulinate along with other valuable by-products like power and formic acid. By using biomass, the process not only reduces reliance on non-renewable resources but also minimizes carbon footprint since biomass absorbs CO2 during growth.

Power generated in the process finds its way back into the grid, providing sustained energy benefits to the community. The revenue generated from selling this power highlights how such processes can integrate into broader energy systems while remaining financially viable.

It's crucial for sustainable energy innovations like Biofine to focus on scaling efficiently and improving energy output while decreasing emissions. This not only advances environmental goals but also ensures economic sustainability by appealing to future market demands focused on green energy solutions.

Renewable Resources

Renewable resources form the cornerstone of modern biorefinery processes by offering a consistent and environmentally-friendly supply for producing sustainable products. Biomass, a key renewable resource in the Biofine process, is used to manufacture ethyl levulinate, a promising alternative to traditional petroleum-based products.

Biomass can encompass a wide variety of materials like agricultural residues, forestry by-products, and dedicated energy crops. One of the main advantages of biomass is its ability to convert into a diverse range of products, such as the by-products power and formic acid in the Biofine process. This adaptability allows biorefineries to optimize resource use effectively and efficiently.

By leveraging renewable resources, biorefineries can provide a pathway towards lower greenhouse gas emissions and sustainable growth. Using biomass ensures a reduced impact on the environment due to its regenerative qualities and closed-carbon cycle—a stark contrast to fossil fuels.

For biorefineries aiming to lead in sustainable resource management, it is essential to continuously innovate and improve methods for converting these resources into high-value products with minimal waste. This underscores the dual role of renewable resources in fostering both economic and environmental resilience.