The potential for centralised second generation hydrocarbons and ethanol production in the Australian sugar industry

Abstract

A major economic hurdle for the viability of second generation biofuel production is the highly dispersed nature of biomass feedstocks and the associated costs of recovery and transport to a biofuel production facility. The sugar industry is unique in that the processing of cane into sugar results in a highly localised and relatively abundant source of biomass fibre for bioelectricity and biofuel production. Despite this localised abundance few Australian mills produce bagasse in quantities sufficient to achieve the economies of scale required for commercially viable biofuel production. In addition most mills are situated in regions which are relatively remote from major fuel distribution and population centres. This paper explores the potential for significant cost reductions through industry-wide factory-based energy densification and transport of bagasse and trash for large scale centralised biofuel production. Energy densification by pelletisation of raw and of torrefied bagasse is compared with unprocessed bagasse in terms of the associated impacts on transport and centralised biofuel production costs. Enzymatic hydrolysis with dilute acid pre-treatment and Fischer-Tropsch (FT) technologies are assumed for the production of ethanol and hydrocarbons respectively. Costs associated with centralised biofuel production based at processing plants in Brisbane and Townsville are considered. The overall lowest costs (on an energy basis) in this study are reached for a sub-scenario in which FT fuel is produced from torrefied and pelletised bagasse and trash located at Townsville at final fuel costs of 48 A$/GJLHV (1.6 A$/L of hydrocarbon fuel). The lowest cost ethanol production scenario is observed for a centralised plant using unprocessed bagasse and trash at Townsville with final costs of 49 A$/GJLHV (1.0 A$/L of ethanol). A Monte Carlo analysis was undertaken to quantify the impact of uncertainties associated with inputs used in calculating unit biofuel production costs. It was found that a deviation from the base case costs is more likely to occur for FT fuel production, which is especially sensitive to export power price and capital investment parameters.