Technoeconomic Analysis of Bio-Jet Fuel Production - Dr. Daniel Klein-Marcuschamer Director, Technoeconomic Analysis, JBEI, LBNL Manager, Technoeconomic Analysis, AIBN, UQ Christopher Turner Process Engineer, AIBN, UQ THANKS • JBEI – Harvey Blanch, Jay Keasling, Blake Simmons • SPONSORS: • AIBN (UQ) – DOE EERE – Peter Gray, Lars Nielsen, Bob McCarthy, Robert Speight, Chris Greig – Boeing • James Cook University – Kirsten Heimann, Rocky de Nys – IOR Energy • IMB (UQ) – Ben Hankamer, Evan Stephens – MacKay Sugar Factory • CILR (UQ) – Virgin Blue Airlines – Peter Gresshoff, Paul Scott • QAAFI (UQ) Group – Ralf Dietzgen – Queensland • QSAFI Consortium Members – Mark Allen, Craig Bernadie, Kelly Cox, Aidan Government Dargan, Rocky de Nys, Michael Edwards, John Hodgson, Shaun Jellett, Bryan Lavarack, David – GE White CONFIDENTIAL Petroleum resources are limited Source: The Association for the Study of Peak Oil and Gas, C.J. Campbell, 2004 … but demand is increasing… … leading to high and volatile oil prices Jet fuels present a challenge From WEF, Repowering Transport, 2011 CONFIDENTIAL People like flying From CSIRO, Sustainable Aviation Fuel Road Map, 2011 CONFIDENTIAL Life Without Oil : 2009:06 : ExCo Jet Fuel Source: IEA BIOENERGY:IEA Source: How expensive is it? Selling you drop-in biofuels SG Biofuels Incitor Sundrop Kior Primus Cool Planet Brent Crude, Nov Nov 15Crude, Brent Joule Ensyn $0 $20 $40 $60 $80 $100 $120 $/barrel Adapted from http://www.biofuelsdigest.com/bdigest/2012/11/12/ CONFIDENTIAL Results depend on assumptions MESP Feedstock/Process In 2009$ Reference ($/gal) Softwood (spruce), steam pretreatment, SSF $2.16 $2.54 (Wingren et al. 2003) Softwood (spruce), steam pretreatment $2.39 $2.81 (Wingren et al. 2003) (Eggeman & Elander Corn stover, dilute acid, SSF $1.34 $1.48 2005) (Eggeman & Elander Corn stover, AFEX, SSF $1.43 $1.58 2005) Corn stover, dilute acid $2.43 $2.43 (Aden & Foust 2009) (Hamelinck et al. Poplar, dilute acid $2.37 $2.71 2005) Corn stover, dilute acid, SSF $3.30 $3.30 (Dutta et al. 2009) Wood, dilute acid, SSF $1.28 $1.66 (So & Brown 1999) Community-updatable tool Wiki-based Models Model Renewable Jet-Fuels Pongamia Seeds Naphtha (C5-C10) Hydrocarbon Jet Fuel Sugarcane Intermediate (triacylglyceride or (C10-C16) farnesene) Diesel (>C16) Algae CONFIDENTIAL Methodology Experimental Literature Industry best data data practices Process Primary Parameters Inputs Material Energy Cost Calculations Balances Balances Estimation Preliminary design, Material Flows, Energy Use, Cash Flows Primary outputs Minimum Selling Derived outputs Price (MSP) CONFIDENTIAL CONFIDENTIAL Minimum selling price Pongamia Seeds Naphtha (C5-C10) Hydrocarbon Jet Fuel Sugarcane Intermediate (triacylglyceride or (C10-C16) farnesene) Diesel (>C16) Algae n n CFi (MSP V C)i NPV i i 0 i1 (1 r) i1 (1 r) CONFIDENTIAL Bio-Jet Fuel Processes 1. Pongamia oil extraction and refining 2. Sugarcane juice fermentation to hydrocarbons and refining 3. Algae growth, oil extraction, and refining CONFIDENTIAL Pongamia oil process • Pongamia pinnata is a leguminous tree and produces seeds with up to ~40% oil • The oil can be extracted and used for biodiesel, or can be refined to compounds that can replace jet fuel CONFIDENTIAL Pongamia oil process Seed Seeds crushing Oil Extraction Anaerobic Steam/Elec Digestion tricity Oil cleaning / UOP Biofuels degumming Refining CONFIDENTIAL Sugarcane molasses process • Sugarcane is a perennial grass with high sucrose content • Sugar content in cane may be 100-150 kg/MT • Sugar can be fermented to a variety of molecules, including compounds that can replace jet fuel use CONFIDENTIAL Sugarcane molasses process Crushing Sugarcane Steam/Elec Farnesene tricity Clarification/ Evaporation “A” Sugar Molasses Farnesene UOP Refining Fermentation separation Biofuels CONFIDENTIAL Algae oil process • Microalgae are photosynthetic microorganisms, some are capable of high lipid accumulation • Oil content in microalgae may be 20-50% (or more) • The oil can be extracted and used for biodiesel, or can be refined to compounds that can replace jet fuel CONFIDENTIAL Algae oil process (Nannochloropsis sp.) Algae CO2, N, P, Ponds Light Algae Water Harvesting recycle Biofuels Oil UOP Oil extraction Cleaning Refining Nutrient recycleNutrient Anaerobic Steam/Elec digestion tricity CONFIDENTIAL Summary of the Results CONFIDENTIAL Likely current economics Pongamia Sugarcane Algae Total Capital Investment ($M) $506 $259 $3,451 Annual Operating Cost ($M) $303 $253 $984 Facility-dependent Costs1,2 31.93% 18.84% 84.17% Raw Materials1 57.86% 70.89% 10.11% Utilities1 5.56% 8.13% 4.43% Labor Cost1 4.53% 2.14% 1.25% Consumables1 0.12% 0.01% 0.04% Minimum Selling Price $373.68 $301.35 $1,343.18 ($/barrel eqv.) 1 As percentage of annual operating cost 2 Facility-dependent costs include depreciation, maintenance, insurance and overhead CONFIDENTIAL Capex breakdown CONFIDENTIAL Costs of Harvesting Source: Shelef, SA, Green M. Microalgae Harvesting and Processing. Carbon Dioxide Information Analysis Center (1990) Sensitivity analysis CONFIDENTIAL Sensitivity analysis CONFIDENTIAL Sensitivity analysis DAF CONFIDENTIAL Likely current and future economics CONFIDENTIAL CONFIDENTIAL Technology progress $67,108,864 $16,777,216 $4,194,304 $1,048,576 ~500,000-fold less $262,144 $65,536 $16,384 $4,096 $1,024 $256 Logarithmic Scale Logarithmic MSP (Arbitrary (Arbitrary Units) MSP $64 $16 $4 $1 CONFIDENTIAL Community-updatable tool http://qsafi.aibn.uq.edu.au Model Questions? Daniel Klein-Marcuschamer Email: [email protected] CONFIDENTIAL Pongamia model validation Raw Materials Capex $590/MT $54.4M for oil extraction ~20% more Range for soybean oil expensive than extraction is $56-78M* soybean Overall process MSP of $440/MT for meal and $1150/MT for oil Similar to market prices for soybean meal and oil * Source: Soares et al., FEASIBILITY STUDY & PRELIMINARY BUSINESS PLAN FOR A MICHIGAN SOYBEAN CRUSH PLANT, 2006 Sugarcane model validation Raw Materials $190/MT molasses Capex Validated by Not publicly available Mackay Sugar Ltd. Overall process MSP of the farnesene intermediate $4.30-$7.10/gal Farnesene for non-fuel target markets start at ~$6.40/gal* * Source: http://www.biofuelsdigest.com/bdigest/2011/05/03/amyris-the-owners-manual/ Algae model validation Overall process Raw Materials MSP $1340/bbl ($32/gal oil) Unimportant IHI Japan reported current fuel price at $48/gal* Capex** $34,000/ha $197,000/ha $22,000/ha $5,600/ha ($12,000/ha with refining) Sources: * http://www.yomiuri.co.jp/dy/business/T121108003031.htm ** Benemann, J.R. & Oswald, W.J. Final Report to the Pittsburgh Energy Technology Center (1996). Need for R&D Source: Benemann, J.R. & Oswald, W.J. Final Report to the Pittsburgh Energy Technology Center (1996). Source: Shelef, SA, Green M. Microalgae Harvesting and Processing. Carbon Dioxide Information Analysis Center (1990) QSAFI: Building a Biorefinery europe.org - www.biocore Concept Pre- Feasibility Business Analysis feasibility Study / Implement Operations Case QSAFI Study FEED CONFIDENTIAL Economic Estimates • CAPEX based on data from various NREL and ORNL reports, vendor quotes, and Aspen calculators • Refining equipment numbers were validated by IOR • Minimum selling prices (MSP) included a discount rate (i.e. a WACC) of 10% for 25 years, a debt-equity split of 60/40, with an interest rate of 8% (admittedly optimistic, under the assumption of government support. These can be changed) CONFIDENTIAL Economic Estimates • Analysis includes annual operating costs (AOC), breakdown of CAPEX by section, and minimum selling prices (MSP) • MSP analysis was carried out by varying the prices of naphtha, aviation fuel, and diesel simultaneously. – This analysis gives the equivalent price of oil that would make the biorefinery competitive with an oil refinery CONFIDENTIAL TEA: Value proposition • For Government agencies (DOE, USDA, etc.) – Assess the potential impact of a grant or program, advise policy, provide independent evaluation on technology • For researchers at early stages – Evaluate different research directions, prioritize efforts, apply for grants • For start-ups and researchers with technologies close to commercialization – Attract capital, make informed decisions, apply for grants • For venture capital and industry – Due diligence, valuate intellectual property, analyze competitive advantage of proprietary technologies .