Optimal allocation of sugarcane bagasse for producing bioelectricity and second generation ethanol in Brazil: Scenarios of cost reductions

Lucio Guido Tapia Carpio and Fábio Simone de Souza

Renewable Energy, 2017, vol. 111, issue C, 771-780

Abstract: The consolidation of second generation ethanol will provide a greater amount of ethanol without increasing sugarcane acreage, but two technologies have emerged that use sugarcane bagasse as a feedstock: the generation of bioelectricity and second generation ethanol. As a result, a new discussion has arisen for the future configuration of the sugarcane industry: should bagasse be used to generate bioelectricity or produce second generation ethanol? Due to the high volatility of prices, for both electricity and anhydrous ethanol, the decision is complex, and higher volatility of price is associated with greater risk in this decision. This article presents a bi-objective optimization model to decide efficiently the percentage of the available sugarcane bagasse that should be allocated to each of these options in order to maximize the average return and, at the same time, minimize the risk inherent in price level volatilities. The results for four possible scenarios are presented; it is concluded that the scenario that presents a bioelectricity production cost of US$ 50/MWh and a cost of second generation ethanol production of US$ 0.30/liter has a higher return and lower risk to the investor. In this scenario, the allocation of bagasse for second generation ethanol production is 84%.

Keywords: Optimal allocation; Sugarcane bagasse; Cogeneration; Cellulosic ethanol (search for similar items in EconPapers)
Date: 2017
References: Add references at CitEc
Citations: View citations in EconPapers (22)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0960148117304007
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:renene:v:111:y:2017:i:c:p:771-780

DOI: 10.1016/j.renene.2017.05.015

Access Statistics for this article

Renewable Energy is currently edited by Soteris A. Kalogirou and Paul Christodoulides

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