Yield Remains Key to Determining Profitability

By Dave Kelsall | September 08, 2008
Increased corn prices, inclement weather, decreased ethanol prices and record-high crude oil have put the ethanol industry on a rollercoaster ride the past few months. Due to a combination of these factors, the industry has suffered from having an agricultural product as a raw material and selling its principal product on an energy market in which prices dance to a different tune.

Market conditions make ethanol yield increases critical, often distinguishing the difference between profit and loss. For the purposes of understanding this situation more clearly, let's use an example of a 50 MMgy corn-based ethanol plant using locally grown corn in the U.S. Midwest.

First, industry stakeholders have become used to talking about yield in a manner that someone would find odd if not used to the terminology of the American farmer. Yield is discussed in gallons of absolute ethanol per bushel of corn. This doesn't tell us everything needed to know how much alcohol can be obtained from a bushel of corn. Alcohol is produced by converting the starch in corn. Corn oil, protein, husk and water are not converted into alcohol. Therefore, the amount of alcohol obtained from a bushel of corn is determined by how much starch the corn contains. How many of the billions of gallons of U.S. ethanol are produced from corn paid for based on its starch content? How many ethanol plants even have an instrument capable of measuring the starch content of incoming corn?

Consider a 50 MMgy ethanol plant with a yield of 2.65 gallons per bushel. It would need to purchase approximately 18.9 million bushels of corn per year. The plant would spend approximately $66 million per year on corn if the average bushel price was $3.50. This is by far the plant's largest expenditure, and the alcohol yield is vital in determining its profitability.

Now consider what an increase in yield of 0.1 gallons per bushel would do for the plant, assuming the same quantity of corn is used. Production would reach approximately 52 MMgy, an increase of 1.9 million gallons. If that alcohol was sold for $2 per gallon, plant revenue would be increased by $3.8 million per year. This represents more than 5 percent of the annual costs of corn and is a relatively modest yield increase likely within the reach of most ethanol producers.

When corn prices are high and ethanol prices are low, increased yield becomes critical to the bottom line. The past few months have brought a slowdown in planned ethanol facilities. Yield increasesnot just throughputbecome critical in order for the industry to continue successfully moving forward.

The difference between throughput and yield is that throughput adds volume but at the requirement of additional materials, energy and other variable costs. Because of this, the additional benefit of throughput is generally subject to the percentage of plant profitability being applied to any benefits.

Yield improvement does not require additional materials, energy or other variable costs and is generally 100 percent additional profit. Additionally, if the alcohol concentration is increased in addition to increased ethanol volume, energy costs will also be lowered as well. This adds further to the additional alcohol contribution gained by yield increases.

Accurately Measuring Yield
When dealing with items as varied as a bushel of corn, it's important to accurately measure the yield of each fermentation batch (most plants make 500 or more batches per year) and control that yield so it's immediately known whether it was above or below average, and why. This is the secret of fermentation management and why it is so critical.


* based on $2 per gallon ethanol

SOURCE: LALLEMAND ETHANOL TECHNOLOGY


Most modern ethanol plants have computer process control systems that continuously monitor the plant and determine trends within the facility. Commonly known as a distributed control system (DCS), it scans plant devices every few seconds. One way to measure yield is to measure the mash density in the slurry vessel every few seconds to calculate the average mash density over the fermentor fill period. If the accurate average mash density and final alcohol content of the fermentor is known, yield can be determined by dividing the drop alcohol (as measured by high-performance liquid chromatography) by the average mash density. The units of this yield measurement are not gallons per bushel, but percent alcohol per unit of mash density. However, this technique isn't perfect.

A true measure of yield is determined by the gallons of ethanol per pound of starch. Considering the constraints of modern measurement methods, the alcohol level per unit of mash density offers an easily measured figure that is extremely accurate. Further, the DCS can calculate the standard deviation of this yield measurement. A graph of the yield against a fermentation batch number can then be plotted.

A cause must be determined when ethanol yield falls outside of plus-or-minus one standard deviation. Knowing why things are going well or poorly allows plant management to take actions that improve the process and continually improve yield. One way to achieve this is to ensure that processing aids are operating in an environment suitable for optimal
yield. This includes making sure that pH and temperature are within the operating parameters for both yeast and enzymes. Yeast optimization is a critical area within fermentation.

Yeast must be in its growth phase, which produces ethanol 33 times faster than any other phase, in order for it to produce ethanol at its full potential. Yeast needs proper nutrition in order to maintain its vitality and produce ethanol as long as possible.

In the current market, it is essential to monitor the yield of every batch of alcohol that the plant produces. When so much of the cost of running a plant is locked into the raw material, the yield of every batch is important to overall profitability. The efficiency of fermentation determines the bottom line for every ethanol plant. Yield is made in the fermentor and modest yield improvements can significantly affect profitability.

Remember, the only thing that makes alcohol is yeast (a living cell). At best, the percent efficiency of the conversion of starch to alcohol is about 92 percent. The remainder goes to growing yeast, glycerol, organic acids (lactic and acetic) and higher alcohols. Optimizing the conversion from starch to ethanol requires a good, trusted partnership between enzyme and yeast suppliers. Knowing how to optimize the fermentation process can lift yields to higher levels.

Adapting these recommendations can help prolong profitability during times of economic difficulty. Fermentation management and yield maximization is a trend that will continue to pay back ethanol producers into the future.

Dave Kelsall is the technical service manager for Lallemand Ethanol Technology. Reach him at dkelsall@lallemand.com.