Economic Viability of Ethanol Production from Mallee Biomass in Western Australia
In Western Australia (WA), mallee is adopted as a key strategy to tackle the serious dryland salinity problem in the low to medium rainfall ‘wheatbelt’ agricultural areas. Potential mallee biomass production in WA is estimated to be ~10 million dry tonnes per year. Mallee production in WA achieves an energy ratio of 41.7 and an energy productivity of 206.2 GJ/ha/year, considerably higher than the typical 10 and <140 GJ/ha/year of annual or other short-lived agricultural crops, indicating they are best placed to become competitive sources of biomass feedstocks for biofuels production.
In this paper, an economic analysis is carried out based a 2000 dry tonne ethanol/day conceptual plant, which produces ethanol from green mallee biomass using the NERL lignocellulosic process. A discounted cash flow analysis was performed to determine the minimum ethanol selling price, which is the selling price of ethanol that makes the net present value of the biomass to ethanol process equal to zero. The analysis indicates that a minimum ethanol selling price of $0.65-0.75/L is required, considering the total project investment estimate margin of +25%/-10%. The results strongly suggest that the mallee-derived ethanol be competitive to gasoline. A base case scenario analysis was further carried out for the Narrogin region. The optimal size of an ethanol plant is determined by the trade-off between increasing transportation costs for feedstocks versus decreasing average plant costs as the plant size increases.