Cost Estimates from Model

A summary of estimated costs for supplying a biorefinery with a flow of switchgrass biomass feedstock is provided in Table 11. For the average net yield of 10 Mg/ha, the estimated cost to deliver a flow of switchgrass is $60/Mg (Table 11). This cost is less than the conventional budget estimate reported in Table 5 of $79/Mg based on a yield of 8.97 Mg/ha. If the budgeted yield estimate in Table 5 is set equal to 10 Mg/ha, the budget cost estimate would decline to $75/Mg. The cost estimates between the two methods for establishment, land rental, and fertilizer are very similar. However, the cost estimates differ for harvest and transportation.

Based on the conventional budget, the harvest cost estimates, assuming a yield of 10 Mg/ha would be $32/Mg. This cost is twice as much as the $16/ Mg estimate obtained from the programming model. This cost difference reflects the potential economies that could result from a coordinated harvest system and a nine-month harvest window. The estimated transportation costs are $10.40/Mg for the budget and $16.06/Mg for the model. These costs differ because the average field to biorefinery distance is assumed to be 48 km in the budget, but is estimated to be 76.55 km by the model. The

Table 11. Comparison of estimated costs with 2011 prices and with price of diesel fuel used for harvest and transportation doubled and with land rental prices doubled.

Category

Units

Base

Fuel Price Doubled

Land Rent Doubled

Land rent

$/Mg

12.22

12.47

24.08

Establishment and maintenance cost

$/Mg

7.61

7.69

7.54

Fertilizer cost

$/Mg

8.10

8.16

8.02

Harvest cost

$/Mg

15.73

18.92

15.56

Field storage cost

$/Mg

0.48

0.48

0.48

Transportation cost

$/Mg

16.06

25.39

16.86

Total cost of delivered feedstock

$/Mg

60.20

73.11

72.32

Average net yield

Mg/ha

10.01

9.94

10.10

Source: Griffith (2012).

average transportation distance is sensitive to the size of the biorefinery and biomass requirements and to the imposed restriction to limit switchgrass to no more than 10 percent of a county’s cropland and improved pasture land.

If the price of fuel used to harvest and transport biomass doubled from the base level of $0.79/L to $1.58/L, the cost to deliver switchgrass increases to $73/ Mg (Table 11). The land lease rates are doubled and the model solved to determine sensitivity to land rental rates. The estimated cost to deliver biomass increases by $12/Mg from $60/Mg (base scenario) to $72/Mg when the land rental rate is doubled.

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