Stochastic Techno-Economic Analysis of Alcohol-to-Jet Fuel Production

Guolin Yao, Mark Staples, Robert Malina and Wallace Tyner

No 235479, 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts from Agricultural and Applied Economics Association

Abstract: This study assesses the alcohol-to-jet (ATJ) biofuel production pathway for three biomass feedstocks, and advances existing techno-economic analyses (TEA) of biofuels in three ways. First, we incorporate technical uncertainty for all by-products and co-products though statistical linkages between conversion efficiencies and input and output levels. Second, future price uncertainty is based on case-by-case time-series estimation. Third, breakeven price distributions are developed to present profitability at each price level. The stochastic dominance results show that sugarcane is the lowest cost feedstock over the entire range of uncertainty, followed by corn grain and switchgrass, with the mean breakeven jet fuel prices being $0.96/liter ($3.65/gal), $1.01/liter ($3.84/gal), and $1.38/liter ($5.21/gal), respectively. With a 75% profitability level, the breakeven prices for corn grain, sugarcane and switchgrass become $1.07/liter ($4.05/gal), $1.05/liter ($3.97/gal), and $1.53/liter ($5.81/gal), respectively. Sensitivity analyses show that technical uncertainty significantly impacts breakeven prices and NPV distributions.

Keywords: Environmental Economics and Policy; Research and Development/Tech Change/Emerging Technologies; Resource/Energy Economics and Policy; Risk and Uncertainty (search for similar items in EconPapers)
Pages: 2
Date: 2016
New Economics Papers: this item is included in nep-ene
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea16:235479

DOI: 10.22004/ag.econ.235479

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