Ethanol Production Costs and Returns

We base our ethanol facility and production assumptions on a study conducted earlier by the California Energy Commission (8). That study examined the potential for using traditional biomass sources as feedstocks for producing ethanol in California. We extend that analysis by considering nontraditional feedstock alternatives, such as California-grown corn, sur­plus grapes and raisins, and culled oranges and other tree fruit produced in the San Joaquin Valley. We also consider almond hulls and whey, and we use updated estimates of energy prices in our analysis.

Some of the data we use are taken from the California Energy Commission’s 2001 report (8). Other data sources include the California Department of Food and Agriculture; the Raisin Administrative Commit­tee; the Renewable Fuels Association; and interviews with individuals in the tree fruit, citrus, almond, raisin, and grape industries.

We consider a new, 40 million-gal ethanol facility built in the San Joaquin Valley. Feedstocks for the facility include corn and surplus fruit products. Coproducts include dried distiller’s grain (DDG), and pomace, another animal feedstock. We assume that the facility operates throughout the year, using selected combinations of feedstock materials. The seasonal­ity of biomass availability is demonstrated in Table 2. Corn and raisins are available throughout the year, because both crops can be stored after har­vest (Table 2). Oranges also are available throughout the year, because we consider two varieties that are harvested at different times of the year.

Подпись: Applied Biochemistry and Biotechnology 102 Vol. 113-116, 2004

Table 2

Seasonality of Biomass Availability

Feedstock Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec.

Culled oranges Other tree fruit

— •

— •

— •

Grapes

Raisins

California corn

— •

Midwestern corn

— •

 

Table 3

Estimated Variable Costs of Operating a 40 Million-Gal Ethanol Facility

Item/reference

Estimated Cost in Dollars ($/gal of ethanol)

Natural gas (11,12)a

0.190

Electricity (9)

0.060

Water/sewage (10)

0.026

Maintenance (10)

0.003

Management and labor (9)

0.090

Processing materials (10)

0.110

Total variable costs

0.479

a Note that if the DG produced when using corn as a feedstock is dried, the natural gas cost rises to $0.310/gal and the total vari­able cost becomes $0.599/gal. The cost of natural gas was calcu­lated using the following tariff structure for large commercial customers of the Pacific Gas & Electric Company (11): summer rates (April 1-October 31): $0.77888 per therm for the first 4000 therms, $0.68719 per therm for additional therms; winter rates (November 1-March 31): $0.84189 per therm for the first 4000 therms, $0.72810 per therm for additional therms.

Other tree fruit and grapes are considered to be available only from May through October.

Fixed Costs

The estimated cost of constructing a 40 million-gal ethanol facility in the San Joaquin Valley is $55 million (9). Amortizing that investment over an expected useful life of 20 yr at a discount rate of 5% generates an amortized expense of $4.41 million/yr. Dividing that cost by the expected annual production of 40 million gal generates an average amortized cost of $0.11/gal of ethanol.