1 

## Final Deliverable Report

“ Opportunities to add cellulosic feedstocks to the corn dry milling industry ”
Kelly Ibsen, PE
Lynx Engineering LLC

Subcontract Number: LFT

- 9

- 99189

- 01

NREL Technical Monitor : Mike Cleary /Andy Aden

Date Submitted: D e c e m b e r 2 n d , 2009

Copies To:
Mike Cleary
National Renewable Energy Laboratory
1617 Cole Blvd., MS 3311
Golden, CO 80401

mike.cleary@nrel.gov

One electronic version Margaret Mortenson National Renewable Energy Laboratory
1617 Cole Blvd., MS 1533
Golden, CO 80401

One printed copy, including graphics NREL Publication Services
National Renewable Energy Laboratory
1617 Cole Blvd., MS 1713
Golden, CO 80401

judy.hulstrom@nrel.gov

One electronic version
One printed copy, including graphics2 

### Opportunities to add cellulosic feedstocks to the corn dry milling industry

Abstract The DOE/NREL “Bridge to Corn Ethanol” project in the late 1990s was one of the first attempts to understand and quantify the similarities and differences between ethanol production using

corn and cellulosic feedstocks. In 2004, NREL and the USDA conducted a study of corn and

cellulosic processing to understand what the key drivers are betwee n processing corn or

cellulose. The current study expanded upon the previous studies by exploring thre e options 1) dry mill expansion with cellulosics, 2) dry mill retrofit to cellulosics and 3) greenfield (i.e. a new plant) co

- processing of corn and cellulosics. All three options showed positive economics when a mature biochemical conversion process was paired with today’s dry milling facilities.

Introduction
The U

. S

. corn ethanol industry developed in the 1970s in response to rising oil prices and increasingly uncertain supplies and has become a significant part of the American rural economy. Technology to produce ethanol from corn is primarily of two types, wet and dry milling. While both are still used today, new installati ons tend to be dry mills due in part to lower capital costs and decreased demand for high fructose corn syrup, one of wet milling’s primary products

. To understand the economics of dry milling, models have been developed by several groups including the US DA (material and energy balance and economic models), University of Minnesota (economic model), and Iowa State University (economic model)

.

The DOE/ NREL “Bridge to Corn Ethanol” project in the late 1990s was one of the first attempts to understand and quantify the similarities and differences between e thanol production using

corn and cellulosic feedstocks

. DOE challenged companies to find economical ways to

comme rcialize cellulose to ethanol, looking to the corn ethanol industry’s development for guidance . The results of the five independent studies identified significant opportunities and more importantly barriers to not only co

- processing, but economic cellulosic processing in general

, such as the lack of robust enzymatic systems, which became a significant part the DOE’s Biomass R&D portfolio. In 2004 , NREL and the USDA conducted a study of corn and cellulosic technologies (Wallace, 2004) to understand what the key drivers are betwee n processing corn and cellulose. That study s howed that feedstock price, co

- product value s and utility costs can make cellulosic feedstocks more economically attractive than corn for ethanol production

. It also concluded that more integrated processing (i.e. combined fermentation and product recovery ) resulted in poor economics due to the change in DDGS composition from addition of cellulosic residue (e.g. lignin) and ultimately its value as an animal feed

. The current study expands upon the previous studies by exploring three options 1) dry mill expansion with

cellulosic s, 2) dry mill retrofit to cellulosic s and 3) co

- processing of corn and cellulosics.

Some companies have pr ojects underway to add cellulosic feedstocks to their dry milling

o perations. POET’s project LIBERTY, due to be complete in 2011, is expanding an existing 50MM gallon per year (gpy) dry mill to include corn cob and fiber conversion to produce an additional 25MM gpy. They are also expanding the corn ethanol production to make a final plant output of 125MM gpy. In 2008, C hippe wa Valley Ethanol implemented a phased plan to3 produce steam from ga sification of biomass ( corn cobs) followed by production of fuels or

chemicals fro m syngas (CVEC News, January 16, 2009)

. Abengoa Bioenergy has completed both a pilot plant and demonstration facility for cellulosic ethanol on two of their existing starch to ethanol sites and has an integrated biorefinery project investigating the opportunities for converting multiple feedstoc ks with both biochemical and thermochemical processes to a variety of products including ethanol and chemicals. Still other companies are looking at s wit ching dry
mills from e thanol to chemical production. Gevo Inc. has retrofitted and started up an etha nol

demo nstration plant for butanol production and Myriant Technologies LLC has announced it is investigating retrofit ting dry mills to make succinic acid ( The Wall Street Journal, Oct. 19, 2009)

.

Key barriers to corn and cellulose conversion
There are several s ignificant technical, political, economic and environmental barriers to ethanol production in the U.S. that affect both the continued growth of the corn ethanol industry and
commercialization of cellulosic ethanol. They include:
Technical

1. Cellulose conversion technology must be fully developed to an economically viable level

– high yields and competitive operating and capital costs.

2. Corn convers ion technology must continue to become more energy and process efficient to
decrease the effect o f energy price fluctuations.
Economic

1. Corn and cellulosics price and availability

2. Natural gas price

3. DDG value and market volume

4. Difficulty in securing financing for cellulosic processes, perceived to be high risk Policy /Public Perception

1. The current RFS limit of renewable biofuels to 15B gallons in 2015

– effect on corn ethanol

2. The current b lend limit of 10%

3. Food vs. fuel debates

4. Concern over genetically modified products

– feedstocks and biocatalysts
Envir onmental

1. Life cycle and emission effects

2. Land use debates

3. E nergy density and transportation of cellulosic feedstocks

The technical barriers continue to be addressed by a blend of industry, university and government groups funded by state, federal, and increasingly for cellulosics, non

- government sources. The multiple and complex factors affecting the agricultural and fuel markets make forecasting ethanol demand and production difficult. Policy has and will play a large role in the

outcome of both corn and cellulosic ethanol industrie s, and environmental issues as steadily gaining prominence in debates about the future of ethanol.

Information and a ssumptions used in this study
The a verage capacity of corn ethanol p lants has almost doubled in recent years, from 32.4MM gpy in 2000 to 62MM in 2009 (RFA 2009 Ethanol Industry Outlook , includes wet mill capacity ).4 If the trend continues , 70MM gpy will be the average in just a few years, and many new dry mills

are 100

- 110MM gpy , which could well be the average by 2022

. Since recent past growth has been spurred by robust federal and state policies it is difficult to predict w hat future plant sizes might be. 100MM gpy or smaller plant sizes were used for most of the scenarios in this study. For operating and capital cost information we c ompared various sources including models from
Iowa State University (Hofstrand, 2009)

, U niversity of Minn esota (Tiffany, 2003)

, and USDA (Taylor, 2007) . All had similar steam and electricity usage per gal lon of corn ethanol , but the
U SDA model included a material and energy balance with the natural gas and electricity inputs to various parts of the plant calculated so it was used to calculate dry mill utility requirements for expansion and co

- processing scenarios.

Table 1

. Corn dry mill n atural gas electric ity values from various models

Capital cost values were very different among the sources , which may be due in part to the year in which the study was done , the recent fluctuations in steel pricing, and the different plant sizes
studied. C apex (defined as total project investment per annual gallon) values included $1.53/gal for 40MM (USDA), $2.25/gal for 50MM (U of Minnesota) and to $ 1 .80 or $2.11 for 100MM ( U of Minnesota, ISU). No other recent sources of capital cost were found, so the 100MM gpy ISU model cost , the most recent of the sources, was used and assumed to be

2007 $ (probably 2008/2009, but definitely after the steel spike of 2004/2005)

. A standard

s caling exponent of 0.6 was used to calculate total project invest ment for the 70MM gpy dry mill plant size. When specific equipment costs were needed in the co

- processing scenarios, the USDA model data, which was the only one with discrete inst alled equipment costs, was used.

The ISU model, which collects price data from the USDA Ag Market News and Energy
Information Administration (EIA) for Iowa corn, DDGS, and natural gas

, (Table 2 ) was used for operating costs

. This study used the most recent values (September 2009) for corn, DDGS and natural gas, and the ISU mod el assumed values for other costs (e.g. chemicals and electricity )
for the mature corn dry mill costs . Finally, forecasted natural gas and electricity prices (used in the expansion scenarios, Table 8) were taken from EIA’s revis ed 2009 Annual Energy Outlook. Because no dry mill model had the same discounted cash flow rate of return calculation as the NREL model, n et production cost, defined to include fixed and variable operating costs and depreciation, but no interest or return on investment, was u sed to compare the corn ethanol and cellulosic ethanol results more directly. The cellulosic production cost with 10% return (termed Minimum Ethanol Selling Price by NREL) is included in the results when available.

It was assumed dry mills will not beco me significantly more efficient in the future; however significant advances like membranes for ethanol dehydration or higher starch corn varieties may challenge this assumption. ISU Model U of Minn Model USDA Model Natural gas cu ft/gal corn EtOH 30 34 32.2 Natural gas to DDGS dryer cu ft/gal corn EtOH

----- ----- 13.6 Natural gas to steam cu ft/gal corn EtOH

----- ----- 18.5 Electricity kWh/gal corn EtOH 0.9 0.75 0.925 Table 2

. Iowa Corn, DDGS and utility prices and net production costs ( USDA, EIA )

Note: $3.15/bu shel is equivalent to $132.40/dry ton for corn

For the ce llulosic conversion process , a m ature ( estimated year 2022) biochemical process was used. The model used for this study is a more recent version of the NREL 2022 one reported in the 11/3/2008 technical memo. This model returns a Minimum Ethanol Selling Price (which includes a ROI of 10%) of $1.25/gal compared to the earlier model at $1.21/gal. A 2,000 dry tonne per day feed rate provides 71 MM gpy ethanol with a yiel d of 91.9 gal/dry ton

. A 32 MM gpy plant model (900 dry tonne per day) was also developed to use in the expansion and co

processing scenarios. Capital costs are 2007 $. Refer to the NREL technical memo “Technical Modeling to Support the EPA Notice of Prop osed Rulemaking (NOPR)”, dat ed 11/3/2008 for
information on the detailed process parameters

.

The comparison of a mature biochemical ligno cellulose process with a dry mill operating with September 2009 costs s how s that the cellulosic process has potential for significantly lower operating costs but higher capital costs

. Tables 3 and 4 show the process details for 32MM and

71 MM gpy corn and cellulosic plants. There is uncertainty in the corn dry mill capital costs due
to lack of data across a range of plant sizes from a consistent source.

Table 3 . 3 2 MM gpy corn and cellulose process overview

Table 4. 7 1 MM gpy corn and cellulose process overview

One of th e questions that arose was how to select the size of facilities to investigate, both on the dry mill and cellulose side. The dry mill size was based on current average and emerging sizes, Current (9/09) Lowest Date Highest Date Corn ($/bushel) $3.15 $1.48 October-05 $6.45 June-08 DDGS ($/ton) $81 $68 January-05 $186 July-08 NG ($/1000 cu ft) $4.38 $4.38 August-09 $12.18 October-05 Electricity ($/kWh) $0.05 $0.05 NA $0.05 NA Net production cost ($/gal) $1.42 $1.06 September-05 $2.49 June-08

Corn Dry Mill Greenfield Cellulosic Ethanol Production Cost with 10% return ($/gal) NA $1.45 Ethanol Production Cost with 0% return ($/gal) $1.55 $1.02 Annual Production, corn OR cellulosics (MM gal/yr) 30 32 Yield (gal/bu or gal/dry ton) 2.8 91.9 Feedstock Cost ($/bu or $/dry ton) $3.15 $45.90 Total Project Investment ($MM) $97.3 $107.7 TPI per Annual Gallon ($/gal) $3.24 $3.37

Model ISU 30MM GPY KI I0910A30

Corn Dry Mill Greenfield Cellulosic Ethanol Production Cost with 10% return ($/gal) NA $1.25 Ethanol Production Cost with 0% return ($/gal) $1.45 $0.908 Annual Production, corn OR cellulosics (MM gal/yr) 70 71 Yield (gal/bu or gal/dry ton) 2.8 91.9 Feedstock Cost ($/bu or $/dry ton) $3.15 $45.90 Total Project Investment ($MM) $167 $185 TPI per Annual Gallon ($/gal) $2.39 $2.61

Model ISU 70MM GPY KI I0910A6 70 to 100MM gpy , as discussed earlier

. One way to determine cellulosic plant sizes for the expansion and co

- processing scenarios was to look at the ratio of per acre corn and stover yields , assuming that the first cellulosic feedstock supplied to an expanded dry mill would be
stover from the co rn suppliers. For corn yields around 140 bu shels per acre ( USDA reported

average for 2000

– 2009) , the stover production is about 1:1 with the corn grain. Assuming 50% of the stover can be sustainably harvested, the rat io of grain to harves t ed stover is 2:1 . If grain yield continues to increase, as agricultural experts expect, the ratio coul d be slightly less, as the 1:1 ratio does not hold at higher yields (ISU Extension, 2002)

. Additionally, harvesting practice could allow a greater amount to be removed sustainably. A ratio of 1.87:1 corn: stover was used for this study based on the analy sis and assumptions of 0.8:1 stover to grain grown, and 67% harvested, as shown in Table 5. This ratio of feed rates translates into a corn ethanol to cellulosic ratio of around 2:1, or roughly a 30MM gpy stover plant in conjunction with a 70MM gpy dry mill for the expansion and co

- process ing scenarios. Additionally, a 70MM gpy dry mill
with a 70 MM gpy cellulosics plant was also investigated in both the expansion and co

processing scenarios; this assumes the plant is sub sidized with additional cellulosic feedstock such as switchgrass or poplar, which could be in production by 2022. Table 5 also shows the potential ethanol per acre from combined corn and stover for current trends and if estimates of

increased per acre yie ld, high er starch varieties and improved harvesting practice become reality

.

Table 5. Ethanol production per acre cropland

– current and forecasted

Notes: Estimate of potential yield with seed improvements = 300 bu shel per acre average by 2030 (Monsanto)

. Estimate of potential yield with high starch varieties = 2

- 4% increase (Growers for Biotechnology, Inc.)

Scenarios and Results The 2004 NREL/USDA study only considered a greenfield corn/cellulose co

- processing facility.

The current s tudy looked at expanding or retrofitting dry mills in addition to new installations. Current Corn Data bu/acre dry ton/acre gal/bu gal/dry ton gal/acre Corn grain 147 4.88 2.77 408 Corn:Stover, grown (1:1) 4.88 Stover, collected (50%) 2.44 91.9 224
Corn:Stover ratio 2.00 Total ethanol per acre 632
Corn Etoh:Stover Etoh ratio 1.82

Future Corn Estimates Corn grain 300 8.40 2.85 856 Corn:Stover, grown (1:0.8) 6.72 Stover, collected (67%) 4.50 91.9 414
Corn:Stover ratio 1.87 Total ethanol per acre 1,270
Corn Etoh:Stover Etoh ratio 2.07 Ethanol Yields Feed Yields7 Expansion Scenario s These scenario s considered the benefits of e xpand ing an existing corn dry mill with the ability to
convert cellulose to ethanol . POET’s LIBERTY project is an example of this scenario, using corn cobs and expanding an existing 50MM gpy corn dry mill with 25MM gpy cellulosic ethanol capacity. POET also plans to expand the corn ethanol capacity by an additional 50MM gpy, making the plant capacity 1 25MM gpy total. For this study, a 70MM gpy dry mill was expanded by adding either 30 or 70MM gpy cellulosic ethanol capacity. It was assumed there was no extra capacity in the dry mill’s product recovery, utilities or waste handling systems

.

For the cel lulosic plant addition, the operating costs are the same as a greenfield plant with the added cost of additional biomass to supply steam for the added dry mill burden

– for the purposes of this study, this cost is passed on to the dry mill and offset by the gas and power savings

. A bigger combined heat and power (CHP) island (in the form of a fluidized bed

combustor and st eam turbogenerator) adds to the capital cost, but the savings in natural gas and electricity from the dry mill are larger than the co mbined costs of biomass and increased
CHP capital . There c ould also be some additional, minor savings in fixed costs, site prep and permitting for the expansion (not included)

. One could also consider a gasifier for supplying the steam and power to the p rocesses. The cellulose expansion costs are compared to the greenfield costs in Tables 6 & 7. The emissions estimate s for the expansion are in Table 11.

Table 6. 32MM gpy greenfield and expansion costs

Cellulosic Process - greenfield Cellulosic Process - expansion Ethanol Production Cost with 10% return ($/gal) $1.45 $1.65 Ethanol Production Cost with 0% return ($/gal) $1.02 $1.11 Annual Production (MM gal/yr) 32 32 Yield (gal/dry ton) 91.9 91.9 Feedstock Cost ($/dry ton) $45.90 $45.90 Total Project Investment ($MM) $107.7 $131.2 TPI per Annual Gallon ($/gal) $3.37 $4.11

Model I0910A30 I0910DME7030 Capital Costs by Area Feed Handling $0 $0

Pretreatment $11,300,000 $11,300,000 Neutralization/Conditioning $800,000 $800,000

Saccharification & Fermentation $5,300,000 $5,300,000 Distillation and Solids Recovery $13,500,000 $13,500,000

Wastewater Treatment $2,000,000 $2,000,000 Storage $1,500,000 $1,500,000 Boiler/Turbogenerator $24,500,000 $38,900,000

Utilities $3,600,000 $3,400,000 Total Installed Equipment Cost $62,500,000 $76,700,000

Added Costs $45,200,000 $54,500,000 (% of TPI) 42% 42% Total Project Investment $107,700,000 $131,200,000 Operating Costs

Feedstock $0.500 $0.500

Biomass to Boiler $0.000 $0.178
CSL $0.024 $0.024
Cellulase $0.075 $0.075
Other Raw Materials $0.142 $0.141 Waste Disposal $0.015 $0.020 Electricity -$0.087 -$0.229
Fixed Costs $0.178 $0.194 Capital Depreciation $0.169 $0.2078 Table 7. 71MM gpy greenfield and expansion costs

The dry mill has the same operating costs as without the expansion minus the natural gas to the boiler and electricity costs; there are still natural gas costs for the DDGS dryer and thermal oxidizer. The natural gas boiler is idled ; it could be used for start

- up or other intermittent use. The savings to the dry mill are offset by the costs of the additional biomass and CHP capacity required to supply the dry mill with steam and electricity. Table 8 shows the savings for several
forecasted natu ral gas and electricity prices

. For the 30MM gpy cellulose expansion, $0.053

- $0.124 /gal corn ethanol savings are predicted. For the l arger 70MM gpy expansion, $0.023

- $0. 094 /gal corn ethanol savings are predicted. Another way to look at it is that th e average ethanol price from the 2 standalone plants (one corn, one cellulosic) would be $1.27/gal for 100MM gpy (Table 3, ($1.55 x 30 + $1.02 x 32)/62) or $1.18/gal for 140MM gpy while the average cost for t he expanded plant is $1.23/gal for 100MM gpy (Table s 3, 6 & 8 (2020 values)

, ( $1.55

– $0.198) x 30 + $1.11 x 32)/62) or $1.11/gal (140MM gpy)

.

Advantages to an expansion are the savings in natural gas, especially when gas prices are high. Of course, a dry mill could just install a biomass

- fed CHP s ystem to see the same savings. For the cellulosic plant, there could be some advantage to an existing site, experienced labor and having some permitting in place . A disadvantage could be that one is Cellulosic Process - greenfield Cellulosic Process - expansion Ethanol Production Cost with 10% return ($/gal) $1.25 $1.33 Ethanol Production Cost with 0% return ($/gal) $0.908 $0.972 Annual Production (MM gal/yr) 71 71 Yield (gal/dry ton) 91.9 91.9 Feedstock Cost ($/dry ton) $45.90 $45.90 Total Project Investment ($MM) $185 $196 TPI per Annual Gallon ($/gal) $2.61 $2.76

Model I0910A I0910DME7070 Capital Costs by Area Feed Handling $0 $0

Pretreatment $18,300,000 $18,300,000 Neutralization/Conditioning $1,400,000 $1,400,000

Saccharification & Fermentation $9,300,000 $9,300,000 Distillation and Solids Recovery $23,300,000 $23,300,000

Wastewater Treatment $3,100,000 $3,100,000 Storage $2,400,000 $2,400,000 Boiler/Turbogenerator $43,600,000 $51,100,000

Utilities $6,000,000 $5,100,000 Total Installed Equipment Cost $107,300,000 $113,900,000

Added Costs $77,700,000 $81,900,000 (% of TPI) 42% 42% Total Project Investment $185,000,000 $195,800,000 Operating Costs

Feedstock $0.500 $0.500

Biomass to Boiler $0.000 $0.048
CSL $0.024 $0.024
Cellulase $0.075 $0.075
Other Raw Materials $0.151 $0.149 Waste Disposal $0.015 $0.016 Electricity -$0.098 -$0.093
Fixed Costs $0.112 $0.119 Capital Depreciation $0.130 $0.1479 forced to a smaller plant size due to land constraints or feedstock supply, and the benefits of
economies of scale are lost.

Table 8 . Savings from adding a cellulosic process expansion to a dry mill

Retrofit Scenario s
A brief literature search found one retrofitting study (Laser et al , 2007). That study showed that the decision to retrofit a dry mill from corn to cellulose depended on a variety of factors including corn price, cellulosic operating cost and the cost to retrofit the plant. The study suggested what areas of the dry mill could be reused and that information was used in determining the potential for equipment re

- use in this study.

The retrofit scenario s considered taking an existing 100MM gpy corn dry mill and convert ing it to

a 70MM gpy cellulose to ethanol facility

. Another retrofitting option that is gaining much interest
is converting a dry mill from ethanol to chemicals production

. For this study, it was found that a 100MM gpy dry mill provides close to the required ferm entation and distillation c apacity needed
fo r a 70MM gpy stover plant using mature biochemical technology. The ethanol concentration is

the bottleneck

– cellulosic feedstocks can provide up to about 10% by volume ethanol; corn can

make 12

- 20% by volume (USDA, POET). This means the same equipment c ould only process

50

- 80% cellulosic derived ethanol. Since the NREL model used here is 71MM gpy, the fit was good. An optimistic and less optimistic set of assumptions were used to determine the range of possible savings, and the cellulosic capital costs were either zeroed out or reduced from a starting g reenfield scenario. Optimistic assumptions included using the entire product recovery system (beer column, rectifier, mol sieve), evaporators, wastewater treatment

, utilities (recycle water, cooling wate r, air ( add ed filter press requirements), and ethanol, gas and propane storage as is. Some of the dry mill fermentors were assumed suitable for the later stages of
cellulosic fermentation and as a beer well, so only 50% new fermentors were considered required. All new f eed handling , pretreatment

, enzymatic hydrolysis and CHP equipment was required. T he c orn handling and saccharification/liquefaction equipment becomes idle as does Industrial Prices (2007$, April 2009 AEO) 2010 2015 2020 2030 Natural gas $/thou cu ft $5.65 $6.51 $7.68 $8.94 Electricity $/kWh $0.057 $0.059 $0.064 $0.070 Utilities Cost per Gallon Corn Ethanol
Natl Gas to DDGS $/gal Corn EtOH 0.075 $ 0.086 $ 0.102 $ 0.119 $
Natl Gas to steam $/gal Corn EtOH 0.102 $ 0.117 $ 0.139 $ 0.161 $ Electricity $/gal Corn EtOH 0.053 $ 0.054 $ 0.059 $ 0.065 $ NG & Electricity costs $/gal Corn EtOH 0.155 $ 0.172 $ 0.198 $ 0.226 $ Expansion Scenario - 70MM gpy corn ethanol, 70MM gpy cellulosic ethanol
Stover cost actual $/gal Corn EtOH 0.049 $ 0.049 $ 0.049 $ 0.049 $ Increase in capital cost $/gal Corn EtOH 0.079 $ 0.079 $ 0.079 $ 0.079 $ Elec revenue decrease/(inc) $/gal Corn EtOH 0.004 $ 0.004 $ 0.004 $ 0.004 $ NG & Electricity savings $/gal Corn EtOH (0.155) $ (0.172) $ (0.198) $ (0.226) $ Net cost/(savings) to dry mill (0.023) $ (0.040) $ (0.066) $ (0.094) $ Expansion Scenario - 70MM gpy corn ethanol, 30MM gpy cellulosic ethanol
Stover cost actual $/gal Corn EtOH 0.081 $ 0.081 $ 0.081 $ 0.081 $ Increase in capital cost $/gal Corn EtOH 0.084 $ 0.084 $ 0.084 $ 0.084 $ Elec revenue decrease/(inc) $/gal Corn EtOH (0.064) $ (0.064) $ (0.064) $ (0.064) $ NG & Electricity savings $/gal Corn EtOH (0.155) $ (0.172) $ (0.198) $ (0.226) $ Net cost/(savings) to dry mill (0.053) $ (0.070) $ (0.096) $ (0.124) $10 the natural gas boiler. Some site development was assumed needed for the new equi pment, so
the ratio of indirect costs to new equipment was kept the same. Less optimistic assumptions included assuming a new b eer column is needed along with all new fermentors and 50% additional cooling water capacity. Table 9 shows that th e capital cost s can be greatly reduced.

Table 9

. Cost reductions from a dry mill retrofit to process cellulosic feeds (70MM gpy)

Advantages to a retrofit are the reduced capital investm ent, already developed site and potentially shorter construction time. Disadvantages include idled grain processing equipment, and the risk and cost associated with altering equipment designed for one purpose to another.

Figure 1 compares the production and capital costs of several types of 70MM gpy plants. Less mature cellulosic processes (i.e. with higher costs or lower yields) will be higher than the mature 2022 technology used in this study.

Figure 1. Comparison of greenfield and retrofitting options f or corn and cellulose ethanol Greenfield Cellulosic Optimistic Dry Mill Retrofit Less Optimistic DM Retrofit Ethanol Production Cost with 10% return ($/gal) $1.25 $1.11 $1.15 Ethanol Production Cost with 0% return ($/gal) $0.908 $0.858 $0.872 Annual Production, Corn/Cellulosics (MM gal/yr) 71 71 71 Yield (gal/dry ton) 91.9 91.9 91.9 Feedstock Cost ($/dry ton) $45.90 $45.90 $45.90 Total Project Investment ($MM) $185.0 $134.5 $148.7 TPI per Annual Gallon ($/gal) $2.61 $1.90 $2.10

Model I0910A I0910A optimistic DM retrofit I0910A less optimistic DM retrofit Capital Costs by Area Feed Handling 0 0 0
Pretreatment 18,300,000 18,300,000 18,300,000 Neutralization/Conditioning 1,400,000 1,400,000 1,400,000
Saccharification & Fermentation 9,300,000 7,100,000 9,300,000 Distillation and Solids Recovery 23,300,000 6,300,000 9,000,000
Wastewater Treatment 3,100,000 0 0 Storage 2,400,000 1,000,000 1,000,000 Boiler/Turbogenerator 43,600,000 43,600,000 43,600,000
Utilities 6,000,000 700,000 4,100,000 Total Installed Equipment Cost 107,300,000 78,400,000 86,600,000
Added Costs 77,700,000 56,100,000 62,100,000 (% of TPI) 42% 42% 42% Total Project Investment 185,000,000 134,500,000 148,700,000

$0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00

Production Costs CAPEX$/gal Ethanol Corn Dry Mill vs. Mature Biochemical Cellulosics Processing
70MM GPY each

Today's Dry Mill costs

2005

- 2009 Lowest Dry Mill Costs

Greenfield Cellulosic Processing

Optimistic Retrofitted Corn Mill to Cellulosic Feeds11 Co

- processing Scenario s These scenarios looked at building a highly integrated greenfield corn a nd stover processing facility ; effectively a 70MM gpy corn facility combined w ith either 32 or 71 MM gpy cellulose

process to create roughly 100MM or 140MM gpy facilities

. Depending on the RFS limits on renewable biofuels (currently capped at 15 MM gpy in 2015) , this may not be an attractive scenario in the future compared to an all cellulosic facility. As in the expansion scenarios, the

32 MM gpy cell ulose portion was selected to show processing costs for all the c orn and stover per acre. The 71 MM gpy cellulose portion assumes additional cellulosic feeds like switchgrass or poplar would be used to supplement the corn feeds.

The earlier NREL/USDA stud y on co

- processing found that mixing the streams before fermentation resulted in a low protein, lignin containing solid co

- product with dubious value as livestock feed, so this study (Figure 2) investigated removing the solids (lignin and some

unconverted cellulose) after enzymatic hydrolysis and before fermentation. A separation step was added after enzymatic hydrolysis and then the corn mash and hydrolyzed liquor were mixed and fermented together . If the enzyme is still active at fermentation temperature (i.e. an SSF) , some cellulose conversion will be lost with this design because the cellulose will not be in
the fermentation vessel

. Some sugars are also lost with the solids; however this c an be reduced by a washing separation process (not s tudied).

Figure 2. Integrated co

- processing of corn and cellulosics 

### Corn Stover

Milling

Ethanol Milling

DDG Cooking

Liquefaction

Saccharification

Co

- Fermentation Pretreatment

Enzymatic Hydrolysis

Ethanol
Purification DDGS Recovery

CHP, WWT & Other
Utilities Ethanol Stripping Lignin to CHP S/L Separation

Syrup to CHP12 Another method to remove the lignin prior to mixing with the corn grain solids are fractionation technologies such as ARP or clean fractionation to take the lignin out in a pretreatment step. Adding the corn mash resulted in higher sugar and ethanol concentrations in fe rmentation; the 70MM gpy corn/32 MM gpy cellulosics case has 20 wt% sugars and 11.7 wt% e thanol and the 70MM gpy corn/71 MM gpy cellulosics case has 17 wt% s ugars and 10 wt% ethanol. In comparison, the corn ethanol industry has had success pushing the ethanol concentration up to 18 wt%; however, the robustness of the ethanologen comes into play, both in the sugar and

ethanol concentrations and the glucose/xy lose ratio. Current co

- fermenting organisms preferentially consume glucose and xylose inhibition will be greater with more glucose available. The syrup from the evaporators was sent to the burner; however, some of this could also be sprayed onto the DDG to make DDGS (distillers dried grains with soluble s ) which is standard practice in the dry milling industry.

The co

- processing scenarios were not rigorously model ed; rather the corn m ash stream and
steam demands were added to the cellulose material and energy balance model and all other change s were made via the Excel cost model. E lectricity, natural gas and other dry mill variable
costs for grain handling, sacc h arification and liq uefaction and DDG drying/handling were added

as well as the installed equipment costs for these operations from the USDA model

. September 2009 Iowa values for corn and natural gas price and DDG value were used from the ISU model. Dry mill variable costs other than corn (enzymes, chemicals) totaled $4.5MM per year or about $0.04/gal ethanol. Labor and other fixed costs were scaled by the combined corn/stover feed

rate to plant with a 0.25 exponent.

The DDG drying was not modeled in Aspen, bu t the solids portion of the DDG stream from the

mode l was used to calculate the D DG value in the Excel cost model

. The emissions estimate
for the DDG dryer vent is from the USDA model and the other emissions (Table 12 ) are from the

combined model . A much more detailed Aspen model would be required to develop a rigorous

energy balance; however it can be said that the feedstocks and natural gas to the DDG dryer are the primary energy input s while the ethanol and DDG are the primary output s . Other outputs include the flue gas and vent gas streams and the cooling tower evaporation

.

Comparing the 100MM gpy models ( Table 10 and Figure 3 ) , the ethanol production cost is lower for the combined plant than the dry mill and the capex is virtually the same. A corn to ethanol yield of 2.77 is equivalent to 118 gal/dry ton corn, so the yie ld is lower with the combined plant, an effect of the lower yields for cellulosics throughout the process. The larger 140MM gpy combined plant benefits from the economies of scale which reduces the capex.

The advantages of co

- processing include utilizing the entire crop from an acre of corn and having the ability to run a variety of feedstocks. The disadvantages come from the more complex process and potential issues with high glucose in mixed sugar fermentation, and this would require some R&D to unders tand the options and limitations.13 Table 10 . Cost s for dry milling of corn vs. integrated co - processing corn and cellulosics

Figure 3 . Comparison of greenfield and co

- processing op tions for corn and cellulos e Corn Dry Mill Ethanol Production Cost with 10% return ($/gal) NA $1.46 $1.35 Ethanol Production Cost with 0% return ($/gal) 1.42 $1.18 $1.09 Annual Production, Corn/Cellulosics (MM gal/yr) 100/0 102.6 137.7 Yield (gal/bu or gal/dry ton) 2.8 104 97.6 Feedstock Cost ($/bu or $/dry ton) $3.15 (corn) $3.15/$45.90 $3.15/$45.90
Ratio of corn to cellulosic feedstock 1:0 1.87:1 0.83:1 Total Project Investment ($MM) $211 $217.0 $277 TPI per Annual Gallon ($/gal) $2.11 $2.12 $2.01

Model ISU 100MM GPY KI I0910D5 I0910C3 Capital Costs by Area Feed Handling $0 $0

Pretreatment $11,200,000 $18,200,000 Neutralization/Conditioning $800,000 $1,400,000

Saccharification & Fermentation $9,900,000 $14,300,000 Distillation and Solids Recovery $25,200,000 $30,100,000

Wastewater Treatment $2,400,000 $3,400,000 Balance of Dry Mill $24,400,000 $24,400,000 Storage $2,400,000 $3,200,000 Boiler/Turbogenerator $45,800,000 $60,700,000

Utilities $5,100,000 $6,500,000 Total Installed Equipment Cost $127,100,000 $161,900,000

Added Costs $89,900,000 $115,100,000 (% of TPI) 41% 42% Total Project Investment $217,000,000 $277,000,000 Operating Costs

Feedstock $0.156 $0.257

Biomass to Boiler $0.000 $0.000
Corn $0.824 $0.614
CSL $0.015 $0.018
Cellulase $0.023 $0.038
Other Raw Materials $0.087 $0.109 Waste Disposal $0.004 $0.007
Natural Gas $0.044 $0.033 Electricity -$0.063 -$0.085
DDG -$0.102 -$0.081
Fixed Costs $0.086 $0.076 Capital Depreciation $0.105 $0.100 Corn/Cellulose Co-processing

$0.00 $0.50 $1.00 $1.50 $2.00 $2.50

Production Costs CAPEX$/gal Ethanol Corn alone vs. Corn & Stover Co

- processing
100MM GPY each

Corn only at today's Dry Mill costs

Corn & Cellulosics Co

- processing14 Table 11. Estimate major emissions from cellulosic expansion of 70MM gpy dry mill

Table 1 2 . Estimated major emissions from co

- processing corn and c orn stover Fermentation off gas Boiler Ash Flue gas Fermentation off gas Boiler Ash Flue gas Aspen stream # 308 809 810 308 809 810 Mass flow (kg/hr)
CO2 9,551.0 51,416.0 21,225.0 78,817.0

N2 0.0 164,855.0 0.0 256,512.0
O2 80.0 8,044.0 177.0 12,587.0
Methane 0.9 2.1
NO2 47.2 72.0
SO2 1,011.0 2,588.0
CO 47.0 72.0
Water 191.0 43,692.0 423.0 80,850.0
Ethanol 242.0 0.0 549.0 0.1
Furfural 2.2 0.1 5.0 0.2

HMF 0.8 1.8
Other solubles 2.0

- 605.7 1.1

- 1,332.1
Ash 2,629.0 31.9 4,726.0 57.4
Other solids 191.2 2.3

- 239.6 2.9 71MM gpy cellulosic expansion 32MM gpy cellulosic expansion

Fermentation off gas Boiler Ash Flue gas DDGS Dryer Vent Fermentation off gas Boiler Ash Flue gas DDGS Dryer Vent Aspen stream # 308 809 810 66VENT 308 809 810 66VENT Mass flow (kg/hr)
CO2 32,523.0 56,624.0 43,011.0 96,286.0

N2 0.0 181,714.0 0.0 309,064.0
O2 165.0 8,662.0 253.0 14,998.0
Methane 1.1 2.1
NO2 57.3 93.7
SO2 888.0 2,474.0
CO 57.3 93.7
Water 642.0 45,342.0 42,864.0 855.0 108,651.0 42,864.0
Ethanol 1,103.0 0.0 15.5 1,298.0 0.1 15.5
Furfural 2.3 0.3 5.0 0.6

HMF 0.8 1.7
Other solubles 2.0

- 317.4

- 2.3

- 422.9

- Ash 1,901.0 23.1 4,224.0 51.3
Other solids

- 78.1 0.9

- - 166.6 2.0

- 140MM gpy co-processing 100MM gpy co-processing