Biofuels system economics

Biofuels, or fuels produced from biomass resources, represent an environmentally responsible source of liquid fuels. The combustion of petroleum and coal releases large volumes of carbon dioxide which have been stored millions of years ago that contribute to the enhanced greenhouse effect. Biomass resources sequester carbon during their growing period, and when processed, this recently stored carbon is released as carbon dioxide. If biomass is replanted after harvesting, the carbon is again sequestered, resulting in a short cycle carbon loop. Another growing problem is waste disposal. Biomass wastes such as wood residues and municipal solid waste (MSW) often are landfilled and produce methane, another greenhouse gas. Diverting these wastes to a processing facility can eliminate methane production from landfilling. The Tennessee Valley Authority (TVA) is developing technology to convert biomass resources to fuels, chemicals, and solid residue that can be used for power generation. There is an estimated 1,118 to 2,945 million tons of biomass resources available annually that can be converted to renewable fuels using newly developed conversion processes. Economic evaluation of these processes have shown promise. This paper compares the economics of six biomass conversion systems. Prices and costs vary for site-specific areas, and the cost numbers usedmore » in the TVA comparison represent general systems. The rate of return on investments vary from 15.5% to 19.8% depending on the feedstock, process, and products. TVA is continuing research and development activities to improve economics of biomass systems and make them more attractive to commercial users. These technologies are environmentally friendly and can help to reduce the rate of atmospheric carbon dioxide and methane accumulation.« less