Total Cost Per Gallon: The True Measure of Success

Finding the sweet spot requires a holistic view of optimization
By Jason M. Blake | February 22, 2012

Lowering a plant’s total cost per gallon to the optimum level is a daunting task, but it is possible already today. The key is finding the optimal sweet spot. For each and every cellulosic ethanol plant there is a unique sweet spot—that one specific point where all its parameters converge flawlessly to attain the lowest total cost per gallon possible. Cellulosic ethanol plants that have mastered identifying and optimizing their process sweet spot have been able to obtain the financing they require and travel down the path to commercialization. Yet, the optimal sweet spot is not easy to find. A myriad of variables must be skillfully balanced that take the right tools, a deep understanding of each variable and its synergies with others, and a holistic view of optimization.

By utilizing this sweet spot mindset and methodology, itemized costs become less relevant as the spotlight is moved towards the total cost per gallon—matched up against the expected selling price of the ethanol. In fact, focusing on reducing all input costs separately without recognizing the interdependencies among the variables could have the opposite effect of driving up the total cost per gallon and thus also the selling price needed to make the investment case bankable. Proper modeling allows us to understand the total cost drivers and tweak them to achieve competitive total cost per gallon.
Game of Trade-offs
Making ethanol from lignocellulosic feedstock is a game of trade-offs. Due to the relatively complex structure of biomass in its native feedstock form, it is, to a large extent, impervious to enzyme and microorganism attack, and pretreatment must be applied to open up the structure. The product stream that results from the chosen pretreatment often contains both physical and chemical characteristics that can prevent the enzyme proteins from catalyzing the depolymerization of the cellulose and hemicelluloses into monomeric sugars, thus inhibiting further fermentation into ethanol.

The research and development team at Novozymes A/S has identified that modeling can play a key role in identifying and realizing the lowest total cost per gallon. The focus of the approach is on parameters such as plant design and construction, as well as process optimization to achieve targeted overall cost goals. The sweet spot approach facilitates an understanding of the many process variables and the synergistic effects they have on one another. This enables well-informed economic decisions to be made by utilizing a dynamic cost modeling tool.

For processes with a homogeneous and well-defined raw material (such as corn) going to a single product (glucose), simple correlations based upon laboratory data can be used to point to the most economical process. For the considerably more complex biomass-to-energy process, cost modeling can simplify and expedite component accounting. This complicated accounting allows for many factors to change simultaneously and arrive at a process cost for each combination of values.  For example, in the hydrolysis step alone, there are numerous factors to consider, some of the most relevant being:  enzyme dose, total solids loading, hydrolysis time, reaction temperature and mixing strategy. Although it sounds optimal, getting to 100 percent conversion is probably not the best case scenario. The sweet spot model takes into account total production parameters and optimizes in a holistic way (see Figure 1).

Enzyme Key
While enzyme cost is no longer one of the major cost components as it was in years past, it is still essential to increase efficiency and lower costs for these key ingredients. The newest product on this path from Novozymes  is Cellic CTec 3, a cellulase that unlocks new ways to optimize pretreatment and hydrolysis enabling plants to lower the total cost per gallon to a level that is fast approaching that of corn ethanol and fossil-based fuels. The new enzyme promises the following improvements:

• Significant reduction in a plant’s total cost per gallon.
• An improvement in hydrolysis cost-efficiency across processes and substrates.
• Lower dose required.
• Shorter hydrolysis time needed.
• Consistent higher biomass conversion to sugar (with no glucose inhibition).
• The possibility for higher total solids loading.
• An opportunity to reduce pretreatment severity.

Finding Fiberight’s Sweet Spot
Fiberight LLC, a developer of a conversion process for municipal solid waste (MSW) to biofuel, has been extensively collaborating with Novozymes for the past three years. The two companies focused on sharing R&D work and obtaining process optimization to specifically meet Fiberight’s unique needs. Resulting pretreatment optimization found efficiencies throughout the process and brought down the total cost per gallon as well as the enzyme cost from $5 to $1 per gallon. With the performance improvement gained and the move to Cellic CTec3, Fiberight was able to reduce its enzyme dosing by 80 percent and at the same time increase its biomass conversion to glucose by 50 percent. Another key goal achieved was higher conversion yields on actual MSW biopulp material (75 percent on substrate with 60 percent cellulose), which has improved profitability and frees capital to make investments in other optimization efforts. Also, a move to milder pretreatments—from a high temperature process to simple jet cooking—significantly improved energy efficiency and facilitated a redesign of the entire plant process. Fiberight has achieved the lowest total cost per gallon for its process, which has spurred the decision to upgrade its Blairstown, Iowa, demonstration plant to commercialization level in the first half of 2013.

Partnerships Enable Commercialization
Ultimately it’s only total cost per gallon of cellulosic ethanol that matters, but reaching the absolute lowest possible level is extremely hard to achieve. Reducing total cost per gallon to a commercially relevant level required for scale-up, can only be achieved by skillfully balancing many variables—not the least of which is overall capital and enzyme costs. This process requires insights and decision making that only comes though close partnerships. This is the premise that Novozymes has been following for over a decade. Working together with partners to share the load, and in the process gaining the insights, the approach to partnering and the tools needed to enable our partners to move to commercialization ahead of the pack.

Author: Jason M. Blake
Global Director, Biomass Business Development,