Conté: Part 1, Preliminary / A. Sala. Part 2, Upstream & production / L. Esteban. Part 3, Downstream & transesterification / A. López. Part 4, Economic summary /A. Carcelle

Carceller, A.

Esteban, L.

López, A.

Sala, A.

Universitat Autònoma de Barcelona. Facultat de Biociències

Carceller, Albert

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 DESIGN OF A BIODIESEL PRODUCTION FROM ALGAE PLANT  PART 4. ECONOMIC SUMMARY Carceller A., Esteban L., López A. and Sala. A  Treball de fi de grau, Grau de Biotecnologia. Universitat Autònoma de Barcelona    INTRODUCTION  The project undertaken in this report corresponds to a vision of the future of renewable energy and more specifically to the production of biofuels. The idea we start with is a biodiesel production plant with the capacity to meet 10% of demand for the biodiesel Catalonia planned for the coming years. The biodiesel will be produced from algae because its production capacity is much higher than other crop species used in the production of biodiesel like corn.              The structure of our plant is divided into three parts: 1. Carbon absorption infrastructure for capturing carbon that algae consume to grow up. 2. Upstream consists of a serie of reactors scaled to produce enough concentration of algae to produce subsequent extension in the sea bag photobioreactors. 3. Downstream that consist of separate biomass from algae oils and then, through a process of transesterification, to obtain biofuel. FUEL TODAY  The oil refining model of extensive fractionation in order to extract value from every last drop of the barrel of oil must be adapted and adopted for biofuel refineries [1]. Oil currently benefits from a relatively low raw material price (an advantage that is slowly being eroded), but oil-derived products also benefit from highly efficient, integrated processes that minimize capital and operating costs. Unless biorefineries adopt the same approach of extensive fractionation and effective process integration, they will fail to achieve competitive operation.        The objective of the current work was to develop process simulation tools by which to evaluate the potential of biofuel production from algae.  CAPITAL COST ESTIMATION  SuperPro Designer we used as the basis of the process does not fit with the plant model that we have designed. For this reason the calculation has been made manually using  the program economical statistic parameters [3].  Cost of the Major Equipment      Fixed Capital            EXECUTIVE SUMMARY  The summary of the whole project concludes that its viability with the actual situation is not possible since the price obtained for our product highly exceeds the current market price of the fuel without government subventions. As mentioned  on the Market of the product section, the annual output of our plant was 17 KTon/year (13 batches). We could not achieve the stated goal, reaching only 24.2% of the desired production.         INTRODUCTION  The cost estimation discussed in the previous section is valuable for economists, engineers and microbiologists because they are concerned with the long-run industry sustainability. Nevertheless, potential investors may be more concerned with the profitability of their investment. Profitability is typically measured by such indicators [4] as payback period, net present value (NPV) and internal rate of return (IRR) extracted of the Cash Flow of the project [5]. This section will analyze the profitability of the biofuel production plant, providing insights to potential investors who might be interested in this technology.  Financing     Revenues                   Cash flow As we said before this analysis is based on the idea that we will be able to sell the biofuel at the unit cost price because government subventions. In the figure below is analyzed which would be the result of the Net Present Value of the plant if the selling price of the biofuel changes.            EXECUTIVE SUMMARY     Total Capital Investment 571,536,370  $ Capital Investment Charged to this Project 611,543,915  $ Operating Cost 167,535,397  $/yr Production Rate 17,937,985.86  kg/yr Unit Production Cost 9.34  $/kg Total Revenues 236,399,220  $/yr Gross Margin 29.13  % Return On Investment 8.83  % Payback Time 11.33  years IRR (After Taxes) 6.70 % NPV (at 7.0% Interest) 496,546,450  $ Upstream 51% Downstream 49% Cost of the Major Equipment = 125,281,370 $  I I  MARKET OF THE PRODUCT  The Catalan Institute of Energy, the Department of Labor and the Industry of the Government of Catalonia expect that the use of biodiesel in 2015 will be of 741 KTN, 15% of total diesel distributed in Catalonia [2]. Our aim would be to produce 10% of the forecast consumption of biodiesel, the 10% of the 15% expected (74.100 tons per year of production). However, the real production of our plant reaches only to produce about 17 Kton per year (a 24.2% of the desired productivity).       ET F T E P CT INTRODUCTION  Annual operating cost         Unit of product cost             OPERATING COST ESTIMATION UNIT COST - PROCESS SUMMARY   Operating cost ($) 167,535,397 Total production (Kg) 17,937,986 Cost per Kg biofuel ($/Kg) 9.34 PROFITABILITY  ANALYSIS FINANCING - PROCESS SUMMARY   Total Capital Investment 571,536,370 Interest (7%) 40,007,546 TOTAL 611,543,915 Biofuel 71% Biomass 23% Glycerol 1% CO2 5% Total Revenues = 236,399,220 $  -800000-600000-400000-200000020000040000060000080000010000000 2 4 6 8 10 12 14NPV of the project (thousands of $) Price of the selling biofuel ($/kg) Impact of the biofuel price on the project viability Figure 1. Comparison of the land needed to replace 50% of current petroleum diesel in the U.S. with different types of crops. Source: U.S. Department of Energy. Catalonia Reference  €/L €/Kg $/kg Gasoline (taxes included) 1.52 2.23  2.90 Diesel (taxes included) 1.342 1.58 2.06 Gasoline 0.751 1.10 1.44 Diesel 0.765 0.90 1.17Table 1. Catalonia fuel price references with and without taxes. The monetary change is 1€=1.30US$. Source: Information sheet of the cost of the energy n. 443, 15th of January of 2013 (Catalan Institute of Energy, Department of Labor and Industry of the Government of Catalonia). 0200400600800Biofuelrequirement(prevision)DesiredproductionReal productionBiofuel KTon Biofuel market in Catalonia (2015) Figure 2. Prospective biofuel requirement and desired production versus the real production of our plant. Source: Energy Plan 2006-2015 (Catalan Institute of Energy, Department of Labor and Industry of the Government of Catalonia). Table 2. Executive Summary of the project assuming we can sell the biofuel at the unit production cost in the market due to government subventions. Figure 3. Comparison of the cost of the major equipment between upstream and downstream sections. Upstream includes the cost of the photobioreactors and the carbon absorption. Table 3. Fixed capital estimation.  Source: SuperPro Designer economic parameters. a. The cost of the port has been estimated according to the cost of a construction port project in Catalonia. It has been supposed that due to the nature of our project we could ask for an European competitive financial aid (FEDER), 50% of the cost subvention. b. Covering labor, raw material, utilities and waste treatment cost. c. Algae bags plus hexane (Reusables section). 33% 14% 36% 4% 13% Annual operating cost = 167,535,397 $ Raw MaterialsLabor-DependentFacility-DependentReusablesUtilitiesFIXED CAPITAL ESTIMATE SUMMARY        Cost ($)    Cost ($) Total Plant Direct Cost (TPDC)     Total Plant Cost  (TPC)   1. Equipment Purchase 65,435,605   TPDC + TPIC 365,231,813 2. Installation 9,815,341   Contractor's Fee & Contingency (CFC) 3. Process Piping  22,902,462   12. Contractor's fee 18,261,591 4. Instrumentation 26,174,242   13. Contingency 36,523,181 5. Insulation 1,963,068   TOTAL 54,784,772 6. Electrical 6,543,561   Direct Fixed Capital (DFC)  7. Buildings 29,446,022   TPC + CFC 420,016,585 8. Yard Improvement 9,815,341   Total Capital Investment (TCI) 9. Auxiliary Facilities 26,174,242   Start up/Validation cost 21,000,829 10. Porta 30,000,000   Working Capital (30 days)b 6,791,190 TOTAL 228,269,883   Direct Fixed Capital (DFC) 420,016,585 Total Plant Indirect Cost (TPIC)    Reusable material initial capitalc 123,727,765 10. Engineering 57,067,471   TOTAL 571,536,370 11. Construction 79,894,459      TOTAL 136,961,930      3.03 $ 1.30 $ 3.38 $ 0.39 $ 1.23 $ Biofuel unit cost ($/Kg) Raw MaterialsLabor-DependentFacility-DependentReusablesUtilitiesFigure 5. Biofuel unit cost divided into the sections that add up the total cost. Total = 9.34 $/Kg  Table 4. Unit cost of the product calculated as the quotient of the operating cost divided by the total production. Source: SuperPro Designer output production values.  Figure 4. Comparison of the annual operating cost items. MARKET OF THE PRODUCT  [1] Mustafa, M. A., Misailidis, N., Mateos-Salvador, F., Du, C., J Sadhukhan, J., Campbell, G. M., Feasibility of co-producing arabinoxylans and ethanol in a wheat biorefinery. HGCA. 2007.  [2] Associació Catalana del Biodiesel: http://www.acbiodiesel.net/CAT/catalunya.htm [3] Petrides, D., Cooney, C. L., Evans, L. B., Field, R. P., Snoswell, M., Bioprocess simulation: an integrated approach to process development. Computers Chemical Engineering. 1989.  [4] Petrides, D., Bioprocess Design. Intelligen, Inc. 2001. [5] Zhuang, J., Economic analysis of cellulase production by Clostridium Thermocellum in solid state and submerged fermentation. University of Kentucky Master's Theses. 2004. REFER NCES Table 5. Project financing based on a 7% interest rate bank credit.  TOTAL REVENUES       Revenue Kg/batch Kg/year Cost ($/Kg) Guany ($)  Biofuela  1379845.07 17937985.86 9.34 167,535,397  Dry biomassb  2112100.21 27457302.75 2.00 54,914,605  Glycerolc  144309.58 1876024.538 0.70 1,313,217  CO2d  10800000 140400000.5 0.09 12,636,000      TOTAL  236,399,220 Table 6. Total revenues summary.  a.Biofuel is sold at unit cost price supposing government subventions. b. Dry biomass is sold at 2$/Kg for animal feed. Source: Wageningen University and Research Centre. Industrial production of biodiesel feasible within 15 years, researchers predict. ScienceDaily, 13th Aug. 2010.  c. Glycerol 50-80%  of purity is sold for industrial use. Source: alibaba.com d. CO2 emission cost prediction in 2020 (90 $/ton). Source: Wilson, R., Luckow, P., Biewald, B., Ackerman, F., Hausman, E., Carbon Dioxide Price Forecast. Synapse Energy Economics, Inc. 4th Oct. 2012.   Figure 6. Contribution to the total annual revenues of every item. Figure 8. Variation of the NPV of the project at different selling prices of the biofuel. The selling price of the biofuel can be reduced to 5.38-5.39$ to obtain a NPV of 0$, so we could be not so far of the market price of the fuel. 

Design of a biodiesel production from algae plant

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Design of a biodiesel production from algae plant

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