Economic competitiveness of Paulownia as a feedstock for ethanol and electricity production

Kuldeep Kumar Singh, Tennessee State University

Abstract

The role of bio-energy is significantly emphasized due to the continuous rise in oil price and environmental problems. Transformation of the renewable and abundant biomass resources into a cost competitive, high performance biofuel can reduce dependence on fossil fuel and enhance energy security. Short rotation woody biomass is arguably the best for biofuel production for southeastern region due to their high biomass yield and low input requirement. According to USDA-ARS briefing, the southeastern region has the greatest relative need for increased research investment, especially in the development and deployment of superior performing lignocellulosic feedstocks that can meet the needs of regional advanced biofuel facilities without displacing existing productive agricultural sectors or harming rural economics and environment. The major objectives of the research are to: conduct economic feasibility of on-farm feedstock production from Paulownia, assess economic viability of production of ethanol and electricity generation from Paulownia feedstock and perform sensitive analysis via simulation to determine the effect of uncertainty variables such as production costs, yield, and price of feedstock and conversion technology scenarios on economic feasibility.^ Benefit: cost model was used for the analysis. Secondary data obtained from various sources were used for the analysis. The annualized net revenue from feedstock production was calculated considering 15 year time period. The estimated gross revenue for Paulownia as a feedstock for ethanol ranges between $613 - $951/acre yr-1 and net revenue ranged between $345 - 685/acre yr-1 for price scenarios ranging between $40 - $62/ton. The results of the analysis further shows that production of Paulownia is not only economically feasible for higher dry matter price scenarios, but it shows promising returns under lower price scenarios. Moreover, feedstock production for electricity generation showed that producer could expect gross revenue between $471 - $586/acre yr-1 and highest net revenue expected was $383/acre yr-1 and lowest value was $268/acre yr-1 for dry matter price of $66 and $40/dry ton respectively. According to Monti Carlo simulation, the true average net profit was $338/acre yr-1 for feedstock production for ethanol. Further, there is a 4.3 percent chance that outcome will fall $179/acre yr-1 or below and 95.7th percentile shows net return of $479/acre yr-1 or more for feedstock for ethanol production. The net profit for electricity generation was lower compared to ethanol production scenario. The average profit generated across random samples for electricity generation was $149/acre yr-1 with five percent chance of outcome fall $56/acre yr-1 or below and 95th percentile shows outcome of $240/acre yr-1 or above for electricity generation. The estimated breakeven price for ethanol feedstock was $0.21/gallon and $0.042/kwh for production of ethanol and generation of electricity respectively.^

Subject Area

Agriculture|Agricultural economics

Recommended Citation

Kuldeep Kumar Singh, "Economic competitiveness of Paulownia as a feedstock for ethanol and electricity production" (2015). ETD Collection for Tennessee State University. Paper AAI10012272.
http://digitalscholarship.tnstate.edu/dissertations/AAI10012272

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