[Gasification] cellulosic ethanol technology breaking new costrecords

Mon Mar 17 15:12:50 CDT 2008

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-----Original Message-----
From: gasification-bounces at listserv.repp.org
[mailto:gasification-bounces at listserv.repp.org] On Behalf Of Roger Samson
Sent: Monday, March 17, 2008 2:37 PM
To: 'Discussion of biomass pyrolysis and gasification'
Subject: [Gasification] cellulosic ethanol technology breaking new
costrecords

Just look at this news piece from Canada’s national newspaper the Globe and
Mail on Saturday March 15,2008. It is projected to cost $500 million dollars
for a new cellulose ethanol plant that is to produce a 90 million litres a
year. At an energy content of 0.21 GJ/l that’s 1.9 million GJ or $263/GJ
Capital investment. Corn ethanol plants have investments of $20-25/GJ of
energy output. Pellet plants typically cost $10 million to build a plant
that produces 100,000 tonnes per year or about $5/GJ. With an energy content
of 19 GJ/tonne for wood or switchgrass pellets, that’s the same amount of
annual energy production as the cellulosic ethanol plant (1.9 million GJ)
that cost 50 times more to build. The greenhouse gas abatement would be also
about the same as they both technologies have similar fuel switching C02
offset values/GJ.

If you put interests costs at 6% on the cost of the ethanol plant that’s
$16/GJ in interest costs alone. Grass pellets cost about $8/GJ for all
costs, or ½ the cost of the $16/GJ annual cost for interest for building an
ethanol plant. Cellulose ethanol isn’t going commercial soon with these
disconcerting numbers in terms of record breaking capital costs.    

You could build fifty 100,000 tonne per year wood or grass pellet plants
with the same 500 million dollars and produce 95 million GJ of renewable
energy to replace heating oil and natural gas instead of 1.9 million GJ’s of
cellulosic ethanol. Is anybody in government doing due diligence on
cellulosic ethanol?  

Roger 

  _____  

Ottawa weighs funding Iogen ethanol plant

Reuters

March 14, 2008 at 5:02 PM EDT

WINNIPEG — The federal government said Friday it is performing due diligence
on a proposal to help fund a commercial-scale cellulosic ethanol plant
planned by Iogen Corp. for the province of Saskatchewan.

“It's a huge step in the commercialization process,” said Jeff Passmore, an
Iogen official, in an interview.

By 2011, the $500-million plant would produce about 90 million litres of
ethanol a year, along with enzymes and other byproducts, using straw left
over from the wheat harvest in Canada's breadbasket,

Canada has said it will spend $500 million to help commercialize
“next-generation biofuels” with repayable loans for up to 40 per cent of
project costs.

“They need to know that this is a sound investment,” Mr. Passmore said,
adding that government officials began meeting with Iogen engineers and
other company officers last month to study the project, with the due
diligence process set to wrap up next month.

Traditionally made from corn and other food crops, ethanol is a fuel
additive hailed as a way to extend the longevity of limited global oil
supplies and reduce the climate-changing greenhouse gas emissions of
vehicles.

But rising concerns about food inflation have pushed governments to invest
in cellulosic ethanol, which currently costs about twice as much to produce
as corn-based fuel, and is not yet produced on a commercial scale.

The United States will consume about 9 billion gallons (34 billion litres)
of ethanol this year, but the recent U.S. energy bill calls for 36 billion
gallons of renewable fuel by 2022, including 16 billion gallons from nonfood
stocks.

Privately held Iogen, backed by Royal Dutch Shell PLC and Goldman Sachs
Group Inc., is working a similar-size project in Idaho selected for U.S.
federal funding last year.

“We're proceeding with due diligence there as well,” Mr. Passmore said.

The timetable for the Idaho project is still to be determined, he said.
Iogen hopes to have financing in place to start building the Saskatchewan
plant later in 2008 or early in 2009.

Iogen has run a demonstration plant in Ottawa for four years that can
produce about 2.5 million litres of ethanol per year from straw.

“I'm not sure what stage our competitors are at, but we're the only ones who
have had four years of operating experience at a demo plant, and that's
taught us a lot about what works and what doesn't,” Mr. Passmore said.

Iogen eventually hopes to build plants producing 200 million to 250 million
litres of ethanol to attain better economies of scale, he said.

  _____  

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