Supplier Breakeven - Parameter Assumptions
Parameter Feedstock Mean Value (Likeliest if Skewed) Statistical Distribution of Cost Estimates1
Opportunity Cost (COpp) Stover (CS) - -
Switchgrass (MW) $150/acre6 Log Normal
Switchgrass (MW_low) $100/acre Log Normal
Switchgrass (App) $75/acre Normal
Switchgrass (SC) $50/acre Normal
Miscanthus (MW) $150/acre Log Normal
Miscanthus (MW_low) $100/acre Log Normal
Miscanthus (App) $75/acre Normal
Wheat Straw $1.80/acre ($0) Maximum Extreme
SRWC - -
Forest Residue - -
Alfalfa (1st year w/ fert) $175/acre Fixed

 

Supplier Breakeven - Parameter Assumptions
Parameter Feedstock Mean Value (Likeliest if Skewed) Statistical Distribution of Cost Estimates1
Oil Price (POil) All $52/barrel $191/barrel Fixed
$111/barrel (3 scenarios)
Energy Equivalent Factor (EV) All 0.68 (0.65) Maximum Extreme
Tax (T) All $1.01/gal Fixed
Byproduct value (VBP) Stover $0.16/gal Fixed
Switchgrass (All) $0.18/gal Fixed
Miscanthus (All) $0.18/gal Fixed
Wheat Straw $0.18/gal Fixed
SRWC $0.14/gal Fixed
Forest Residue $0.14/gal Fixed
Alfalfa $0.18/gal Fixed
Octane (VO) All $0.10/gal Fixed
Capital Cost (CI) All $0.91/gal ($0.85) Maximum Extreme
Non-enzyme Operating Cost All $0.36/gal Fixed
Enzyme Cost All $0.50/gal ($0.46) Minimum Extreme
Yield (YE) All – current 70 gal/ton Normal
All – future 80 gal/ton Normal

1 The cost estimates taken from several published studies cited in Appendix L are not necessarily normally distributed. This column reflects the statistical distribution that the cost observations tended to best fit and that was used in the Monte Carlo process to derive statistical “mean” and “most likely values” if the statistical distribution of costs was skewed.

2 Average hauling distance is calculated using the formulation by French (1960) for a circular supply area with a square road grid. Technically, the distance is not fixed since it is a function of stochastic parameters including biomass density and yield. French, B. 1960. Some considerations in estimating assembly cost functions for agricultural processing operations. Journal of Farm Economics 62:767-778.

3 Equivalent to 2,205 tons per day delivered to a biorefinery operating 350 days per year.

4 Switchgrass establishment seeding cost is amortized over 10 years at 10 percent, Miscanthus establishment and seeding cost is amortized over 20 years at 10 percent, and woody biomass is amortized over 15 years at 10 percent. The values presented in the table are annual payments per acre.

5 All per acre costs are converted to per ton costs using the yield assumptions provided in the table.

6 Midwest opportunity cost is assumed to be positively correlated with corn yield through stover yield with a correlation of 0.75.



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