The technology for conversion of biomass to first generation biofuels is well established and also commercialized. The technologies for second-, third — and fourth — generation biofuels are still at research stage. Hence, the production of second-, third-, and fourth-generation biofuels is presently costlier than the first — generation biofuels. In general, the overall cost of production decreases as the scale of the production unit increases. As the newer biomass conversion tech­nologies reach the stage of maturity required for large-scale production, the costs of production of these second-, third-, and fourth-generation biofuels is likely to become comparable to the first-generation biofuels. The current focus of research is therefore aimed at economizing the production technologies by way of reducing various costs, integrating various technologies on the basis of pinch analysis, increasing the scale of production and diversifying the product range to include value-added products wherever possible. Techno-economic analysis of the dif­ferent individual biomass conversion processes has been carried out. Comparative studies of the different biomass conversion technologies have also been done. Points of cost reduction can be identified and the scope of process integration can studied for the production of biofuels. As there are no commercial-scale produc­tion units for second-generation onwards biofuels, in most cases, the production costs are estimated on the basis of models developed using different production technologies. The entire life cycle right from generation of the biomass to its collection and transportation to the biorefinery/power plant to waste disposal subsequent to the generation of energy is considered for the economic assessment of the biomass conversion process.

Dwivedi et al. [59] have reviewed the economics of ethanol production from cellulose using different conversion technologies. The conversion technology used has a greater impact on the cost of production compared to the type of feedstock used hence, such a study is expected to bring the cost of ethanol production from cellulose feedstock comparable to that from starch-based feedstock. In other words, proper selection and integration of conversion technology is likely to bring the production of second-generation bioethanol comparable in cost to the first- generation bioethanol. The economics of several hydrolysis-based conversion

technologies show that the cost is highest for concentrated acid hydrolysis, neu­tralization, and fermentation technology and lowest for simultaneous saccharifi­cation and fermentation technology (Table 1.14).

Thermoeconomic modeling is carried out to evaluate the various available technologies for a process and select the most suitable one from among them, and to establish optimum operating conditions for the process after identifying critical parameters which will affect the economy of the selected process. This will enable one to assess the competitiveness of different processes and select that or those processes which are likely to offer the greatest economic advantage, energy pro­duction and are at the same time environment friendly and sustainable. Tock et al. [60] have carried out thermo-economic modeling for thermochemical production of liquid fuels (FT fuels, methanol, and dimethyl ether) from biomass with respect to process description and process integration. A thermodynamic model has been developed and used to calculate liquid-vapor and chemical equilibrium; an energy model has been developed to minimize the energy consumption taking place in a process, by carrying out thermodynamic calculations to get feasible energy targets which can be achieved by optimizing the process operating conditions, heat recovery, and energy conversion. This is based on identification and definition of hot and cold streams, temperature-enthalpy profiles, and their minimum approach temperature. Economic model is developed considering the size of all such equipments required and type of construction material required for fabricating them that are responsible for the productivity of the overall process. The cost of equipment is estimated from capacity-based correlations. For evaluating the pro­duction costs, the total annual costs for the system, which include the annual investment cost, cost of operation and maintenance, cost of raw material, and electricity supply and demand are divided by the amount of fuel produced. The electricity and fuel sale price is calculated using the biomass break-even cost (expressed in terms of the expenditure per MWh of biomass) that defines the maximum resource price for which the process is profitable.

Caputo Antonio et al. [61] studied the economics of biomass to energy con­version in combustion and gasification plants with specific reference to the effect of logistics variables with the aim of assessing the feasibility/profitability of direct production of electric energy from biomass. The study was carried out on com­bustion and gasification plants in the capacity range of 5-50 MW. The scale effects were found to be very significant in that profitability of both combustion and gasification systems increased with scale-up of plant size. Also, the influence of logistics on economic performance reduced with increasing plant size. The logistics included purchase and transport cost of biomass, operating labor, main­tenance, and ash transport/disposal costs. The effects of these on the total capital investment and total operating cost were evaluated. In terms of capital and operating costs, combustion-based process showed a lower total capital investment but a higher total operating cost compared to the gasification system. The gasifi­cation system has a lower biomass consumption compared to combustion system and thus, has a lower operating cost. However, in spite of the lower operating cost, the high capital investment, especially in absence of fiscal incentives and adequate financial support, makes the gasification system less profitable than the combustion system. The biomass purchase cost and biomass transportation cost for a gasifi­cation process is much more significant compared to the operational labor, maintenance, and ash transport/disposal costs. It is therefore possible to improve the performance and profitability of a gasification-based approach to the extent that it is comparable to the combustion-based approach by taking advantage of the technological advances and by improving the logistics of biomass procurement and transportation.

With advances in technology and ever increasing fossil fuel and electricity costs, the profits incurred by biorefineries and other biomass conversion technol­ogies is likely to increase enormously due to an added advantage of value-added products generated during the conversion plus the carbon credits earned due the environment friendly processes used, which would give additional monetary and non-monetary benefits to the company. However, the advanced efficient conversion technologies would require a concurrent improvement in the biomass generation collection and transportation efficiencies and improved fuel/energy transport efficiencies. We are gradually moving from carbon neutrality toward carbon negativity, where the amount of carbon generated as a result of con­sumption of the fuel/energy would be significantly less than that used up by the biomass during its generation.