Pelletization is the only preprocessing step considered in the biomass supply system. The base case pellet plant has a production capacity of 6t/hour with the annual production of

45,0 t (Sokhansanj et al. 1999). The plant operates 24 hours for 310 days annually (annual utilization period 85%). Table 7.4 summarizes the cost of pellet production including variable costs using the system. For the base case, wood shavings at 10% (w. b.) moisture content was considered as a burner fuel with a fuel cost of $40/t delivered to the pelleting plant. Cost of wood shavings is considerably high because of the high demand for animal bedding materials and as a fuel for the pulp mills. The capital and operating cost of producing biomass pellets are $5.64 and $25.18/t of pellet production, respectively. The cost of producing pellets ($30.83/t) may be further reduced if the plant capacity is increased. Sokhansanj and Turhollow (2004) calculated a cost for cubing of corn stover at $26.17/t using corn stover as source of heat in the biomass dryer.

For the energy inputs to produce pellets, a sum of 0.821 GJ/t is calculated for the entire process. The sum is roughly 5% of the 16 GJ energy content in a ton of dry switchgrass. The most energy-consuming operation is the dryer (assumed drying from 50% to 10% moisture content), which constitutes more than 40% of the entire energy used for pelleting. Next in the list is the pelleting process followed by the grinder.

There are a number of means of lowering pellet costs and energy consumption. It is pos­sible to move the grinding operation to the field and grind to a bulk density as high as 128 kg/ m3. This change in the process sequence would reduce the cost of transporting loose stover and give almost the same density as a bale without the baling cost. Costs might be lowered by as much as $10/t. Operating the pelleting facility 300 days instead of 240 days/year will reduce costs. Achieving a higher density cube and higher pellet mill throughput, as with alfalfa, would also contribute to lowering costs. Other additional opportunities to reduce costs

would include having multiple feedstocks that are available as a fresh supply for as much as 180 to 240 days of the year.