Techno-Economic Analysis of Biofuels Production Based on Gasification Ryan M. Swanson, Justinus A. Satrio, and Robert C. Brown Iowa State University Alexandru Platon ConocoPhillips Company David D. Hsu National Renewable Energy Laboratory NREL is a national laboratory of the U.S. Department of Energy, Office of Energy Efficiency & Renewable Energy, operated by the Alliance for Sustainable Energy, LLC. Technical Report NREL/TP-6A20-46587 November 2010 Contract No. DE-AC36-08GO28308 Techno-Economic Analysis of Biofuels Production Based on Gasification Ryan M. Swanson, Justinus A. Satrio, and Robert C. Brown Iowa State University Alexandru Platon ConocoPhillips Company David D. Hsu National Renewable Energy Laboratory Prepared under Task No. BB07.7510 NREL is a national laboratory of the U.S. Department of Energy, Office of Energy Efficiency & Renewable Energy, operated by the Alliance for Sustainable Energy, LLC. National Renewable Energy Laboratory Technical Report 1617 Cole Boulevard NREL/TP-6A20-46587 Golden, Colorado 80401 November 2010 303-275-3000 • www.nrel.gov Contract No. DE-AC36-08GO28308 NOTICE This report was prepared as an account of work sponsored by an agency of the United States government. Neither the United States government nor any agency thereof, nor any of their employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately owned rights. Reference herein to any specific commercial product, process, or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply its endorsement, recommendation, or favoring by the United States government or any agency thereof. 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Foreword The purpose of this techno-economic analysis is to compare a set of biofuel conversion technologies selected for their promise and near-term technical viability. Every effort is made to make this comparison on an equivalent basis using common assumptions. The process design and parameter value choices underlying this analysis are based on public domain literature only. For these reasons, these results are not indicative of potential performance, but are meant to represent the most likely performance given the current state of public knowledge. iii List of Acronyms AGR acid gas removal ASU air separation unit BTL biomass to liquids CFB circulating fluidized bed DCFROR discounted cash flow rate of return DME dimethyl-ether FCI fixed capital investment FT Fischer-Tropsch GGE gallon of gasoline equivalent HRSG heat recovery steam generator HT high temperature IC indirect costs IGCC integrated gasification combined cycle IRR internal rate of return ISU Iowa State University LHV lower heating value LT low temperature MEA monoethanolamine MJ megajoule MM million MTG methanol to gasoline MW megawatt Nm3 normal cubic meter NREL National Renewable Energy Laboratory PSA pressure swing adsorption PV product value Sasol South African Coal, Oil, and Gas Corporation SPR slurry phase reactor SMR steam methane reforming SWGS sour water-gas-shift TCI total capital investment TDIC total direct and indirect cost TIC total installed cost tpd tons per day TPEC total purchased equipment cost WGS water-gas-shift iv Executive Summary This study compares capital and production costs of two biomass-to-liquid production plants based on gasification. The goal is to produce liquid transportation fuels via Fischer-Tropsch synthesis with electricity as a co-product. The biorefineries are fed by 2,000 metric tons per day of corn stover. The first biorefinery scenario is an oxygen-fed, low-temperature (870°C), non- slagging, fluidized bed gasifier. The second scenario is an oxygen-fed, high-temperature (1,300°C), slagging, entrained flow gasifier. Both are followed by catalytic Fischer-Tropsch synthesis and hydroprocessing to naphtha-range (gasoline blend stock) and distillate-range (diesel blend stock) liquid fractions. (Hydroprocessing is a set of refinery processes that removes impurities and breaks down large molecules to fractions suitable for use in commercial formulations.) Process modeling software (Aspen Plus) is utilized to organize the mass and energy streams and cost estimation software is used to generate equipment costs. Economic analysis is performed to estimate the capital investment and operating costs. A 20-year discounted cash flow rate of return analysis is developed to estimate a fuel product value (PV) at a net present value of zero with 10% internal rate of return. All costs are adjusted to the year 2007. The technology is limited to commercial technology available for implementation in the next 5–8 years, and as a result, the process design is restricted to available rather than projected data. Results show that the total capital investment required for nth plant scenarios is $610 million and $500 million for high-temperature and low-temperature scenarios, respectively. PV for the high- temperature and low-temperature scenarios is estimated to be $4.30 and $4.80 per gallon of gasoline equivalent (GGE), respectively, based on a feedstock cost of $75 per dry short ton. The main reason for a difference in PV between the scenarios is because of a higher carbon efficiency and subsequent higher fuel yield for the high-temperature scenario. Sensitivity analysis is also performed on process and economic parameters. This analysis shows that total capital investment and feedstock cost are among the most influential parameters affecting the PV, while least influential parameters include per-pass Fischer-Tropsch-reaction-conversion extent, inlet feedstock moisture, and catalyst cost. In order to estimate the cost of a pioneer plant (first of its kind), an analysis is performed that inflates total capital investment and deflates the plant output for the first several years of operation. Base case results of this analysis estimate a pioneer plant investment to be $1.4 billion and $1.1 billion for high-temperature and low-temperature scenarios, respectively. Resulting PVs are estimated to be $7.60/GGE and $8.10/GGE for high-temperature and low-temperature pioneer plants, respectively. v Table of Contents Introduction ................................................................................................................................................. 1 Background ................................................................................................................................................. 2 Biorenewable Resources ............................................................................................................2 Gasification ................................................................................................................................2 Reactions ..............................................................................................................................3 Gasifier Types ......................................................................................................................4 Biomass Preprocessing ..............................................................................................................7 Syngas Cleaning.........................................................................................................................9 End-Use Product ......................................................................................................................10 Power Generation ...............................................................................................................10 Synthetic Fuels and Chemicals ..........................................................................................11 Methanol to Gasoline .........................................................................................................11 Fischer-Tropsch .................................................................................................................12 Techno-Economic Analysis .....................................................................................................13 Methodology .............................................................................................................................................. 16 Down-Selection Process ..........................................................................................................16 Preliminary Criteria ...........................................................................................................17