Effects of corn stover year-to-year supply variability and market structure on biomass utilization and cost

Rajdeep Golecha and Jianbang Gan

Renewable and Sustainable Energy Reviews, 2016, vol. 57, issue C, 34-44

Abstract: The availability of corn stover can vary considerably from year to year in a region due to annual changes in yield and area planted with corn. Such variations interacting with biomass market structures can affect biomass cost and utilization rate. This study first characterizes year-to-year variations in corn stover supply for the US in general and for selected major US corn producing counties in particular. There have been 20–30% year-to-year variations in stover supply in the US since 1975. Game theoretic analysis is then applied to examining corn stover utilization rate and production cost in three market structures. The analysis reveals that a free market structure will take the form of oligopoly–oligopsony, where large stover supply variations will expose both biorefineries and farmers to significant price volatility. Price equilibrium will shift significantly from year to year. Of the three market structures analysed, the “Derisked” supply market structure will be most favorable to biorefineries and farmers. Under this structure, biorefineries will maintain a stover supply region that is based on “Derisked” (lower than average) yield density to buffer for the supply uncertainty associated with annual variations. This market structure results in significantly less volatility in biomass cost while on average only 63% of collectable stover will be used for biofuel production. Our findings suggest that year-to-year variation in corn stover availability will increase feedstock cost and reduce its potential for biofuel production.

Keywords: Corn stover variability; Supply market structure; Game theoretic analysis; Cellulosic biofuel (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1364032115014586
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:rensus:v:57:y:2016:i:c:p:34-44

Ordering information: This journal article can be ordered from
http://www.elsevier.com/wps/find/journaldescription.cws_home/600126/bibliographic
http://www.elsevier. ... 600126/bibliographic

DOI: 10.1016/j.rser.2015.12.075

Access Statistics for this article

Renewable and Sustainable Energy Reviews is currently edited by L. Kazmerski

More articles in Renewable and Sustainable Energy Reviews from Elsevier
Bibliographic data for series maintained by Catherine Liu ().