Viability of a distributed manufacturing network for chemicals from biomass using local renewable-powered electrochemistry

Motahareh Kashanian, Shayan Tohidi and Sarah M. Ryan

The Engineering Economist, 2025, vol. 70, issue 3, 152-188

Abstract: Electrochemistry offers a promising pathway for converting biomass into chemicals within distributed facilities powered by renewable electricity. Unlike the fermentation and purification steps that precede and follow it, the electrochemical conversion process does not exhibit substantial economies of scale. This reduction in scale economies suggests that small scale plants could minimize supply chain costs, including energy and transportation costs, while providing environmental benefits. To test this hypothesis, this study employs a two-step optimization framework to minimize costs, including the social cost of carbon emissions. First, the REopt tool from the US National Renewable Energy Laboratory is used to determine optimal wind, solar, and energy storage capacities for each candidate location and facility size. Second, a mixed-integer program optimizes the facility locations and sizes to meet chemical demand. Sensitivity analyses highlight key economic, technical, and environmental factors that influence the viability of distributed manufacturing for emerging electrochemical technologies. By integrating local renewable electricity generation and storage, this work examines the interplay of feedstock proximity, customer locations, renewable energy availability, and partial economies of scale in shaping the sustainability and feasibility of distributed electrochemical manufacturing. The viability of a distributed configuration relies on modest scale economies for the non-electrochemical processing steps, substantial incentives for investment in local renewable energy, high costs assigned to carbon emissions, and long plant life.

Date: 2025
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DOI: 10.1080/0013791X.2025.2541925

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