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Economic Feasibility of Sugar Beet Biofuel Production in North Dakota

Economic Feasibility of Sugar Beet Biofuel Production in North Dakota. Thein Maung and Cole Gustafson North Dakota State University The Economics of Alternative Energy Resources and Globalization: The Road Ahead November 15-17, 2009, Orlando, FL.

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Economic Feasibility of Sugar Beet Biofuel Production in North Dakota

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  1. Economic Feasibility of Sugar Beet Biofuel Production in North Dakota Thein Maung and Cole Gustafson North Dakota State University The Economics of Alternative Energy Resources and Globalization: The Road Ahead November 15-17, 2009, Orlando, FL

  2. Non-Food Sugarbeet Feedstock to Advanced Biofuels NDSU Green Vision Group “Architects For Rural Development” Heartland Renewable Energy (HRE) “Sugar Is The New Oil”

  3. Project Goal • Develop sugar beet to biofuel industry across North Dakota with five irrigated production regions. • First biofuel non-food sugar beet processing plant to be built in 2012. • Provide local economic opportunity

  4. Introduction • Energy Independence and Security Act (EISA) of 2007 defines three classes of biofuels: • Conventional biofuel – 20% GHG reduction • Advanced biofuel – 50% GHG reduction (Highlands EnviroFuels LLC conducted LCA of GHG emissions) • Cellulosic – 60% GHG reduction

  5. Introduction • Sugar beets and sugarcane are uniquely qualified as advanced biofuels under EISA. • By 2022, about 15 billion gallons per year of advanced biofuels will be required

  6. Introduction • North Dakota has great potential to expand irrigated sugar beet production, minimizing land competition with existing sugar beet food crops. • Because of their high sugar content, sugar beets can yield higher ethanol production per acre. • Growing sugar beet feedstock can reduce nitrogen requirements, water use and reduces CO₂ emissions

  7. Literature • USDA (2006) • Examined the feasibility of ethanol production from sugar in the U.S. • Outlaw et al. (2007) • Analyzed the feasibility of integrating ethanol production into existing sugar mill that uses sugarcane juice • Yoder et al. (2009) • Investigated the potential development of an ethanol industry in Washington State using sugar beets

  8. Technology Overview • The plant makes most of it’s own energy. • Stillage waste from fermentation process is spray-dried and burned to produce thermal and electrical energy supplying about 75% of the plant’s energy needs. • Patent has been successfully lab tested by HRE and now needs commercial scale test .

  9. Spent Yeast Sugar Beets Dryer Slicing/Grinding Recovered Yeast Wet Pulp Pressing/Juice Extraction Dryer Beet Pulp/Feed Molasses Cooking and Sterilization Ash/Fertilizer Steam Boiler Fermentation Distillation Dehydration Denaturing Fuel Ethanol Storage Evaporation Dryer Dried Powder Stillage Syrup

  10. Methodology • Divided into four sections: • Production assumptions • Balance sheet • Income statement • Cash flow financial statement

  11. Production Assumptions

  12. Results from Income Statement

  13. Data and Distribution Assumptions

  14. Simulation Results

  15. Simulation Results

  16. Simulation Results

  17. Simulation Results

  18. Summary and Conclusions • One of the most important factors that affect the profitability of the investment is the price of ethanol. • Changes in prices of co-products have a relatively minor affect on the profitability of investment • The ethanol plant can tolerate the feedstock price increase to a certain level without having a critical impact on profits.

  19. Additional Research and Study Needs • Commercial scale burn test of fermentation sediment material to be used for plant energy • Optimal design of feedstock supply chain • Environment lifecycle of the biofuel produced • Impacts on rural employment 19

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