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Economic Analysis of a Mobile Indirect Biomass Liquefaction System

As I described in last month’s column, the Energy & Environmental Research Center (EERC) has built and tested a mobile system for converting wood waste into liquid products such as methanol. The system uses a unique gasifier to convert the wood waste into synthesis gas, which is cleaned, compressed, and converted in a reactor to a variety of possible liquid products. We have initially focused on the production of methanol because it can easily be reformed into hydrogen to power fuel cells to make electricity at remote sites separate from the biomass resource. The gasifier was specially designed by the EERC to handle wet wood waste with up to 40% moisture, thereby saving the need to separately dry the wood before gasification, as most commercial gasification units require.

We have found that the maximum wood feed rate of the system is largely determined by the size of the compressor which can fit on the trailer. The production rate of methanol is greatly enhanced at higher pressures, so we compress the gas to 900 psi before it enters the gas-to-liquids reactor. Given our current configuration, we are limited to converting approximately 160 standard cubic feet a minute of gas into methanol liquids using a system mounted on a single trailer. This is the amount of gas produced from gasifying approximately 200 lb of wet wood an hour.  The information gained from recent tests was used to validate a computer model of the system based on gas production rates and composition. Using the model results, engineers have come up with several improvements to the system that should increase the hydrogen content of the syngas and permit production rates as high as 100 gallons/ton.

At that production rate, the 300,000 tons of unused forest residue produced each year in Minnesota could be converted to approximately 30 million gallons of methanol. A fuel cell uses approximately 1 gallon of methanol to create 5 kWh of electricity, so 30 million gallons of methanol could be used to create 150,000 MWh of electricity by fuel cell in remote locations.

The system is primarily operated via computer control that can be largely automated. This significantly reduces labor requirements to that of handling upset conditions such as plugged filters, rather than continuous monitoring. Therefore, the system is designed to be operated at sites where labor is available sporadically from other ongoing  activities, significantly reducing labor costs.  One of the biggest operating costs is the price of electricity needed to run the compressor. One way to reduce this cost would be to use excess syngas to fire a modified generator to produce the electricity on-site, technology that the EERC is currently developing in cooperation with a generator manufacturer. If we assume that electricity is purchased at 7 cents/kWh, then production costs are predicted to be $1.58/gallon using grid power, but as low as $0.95/gallon if electricity is produced using excess syngas. Both of these costs are based on using wood waste that has no commercial value and is, therefore, free of charge.

In addition to the operating cost of the system, the capital cost of the system must be paid off. We estimate that the cost of the trailer-mounted system with an additional syngas-fired generator and other improvements to increase the production rate to 100 gallons/ton would be approximately $1 million. Assuming an 8% interest rate and payoff of the loan over 10 years, the combined capital and operating cost is approximately $3.05/gallon using grid power or $2.59/gallon using onboard generation. These costs are considerably higher than the current delivered cost of methanol created from natural gas, especially because of the low cost of shale gas being produced. However, in some situations, even these relatively high costs are acceptable, in particular, operation in very remote locations where the delivered cost of methanol may be very high or cases where additional incentives, such as carbon credits, are available. More commonly, production of other liquids, such as Fischer–Tropsch fuels or other organic chemicals, may be more economical at this time than methanol production, at least at the scale of a mobile system mounted on a single trailer.

Project funding is provided by customers of Xcel Energy through a grant from the Renewable Development Fund and the U.S. Department of Energy.By John P. Hurley, Senior Research Advisor, Energy & Environmental Research Center (EERC)