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Feasibility of an Adaptable Biorefinery Platform: Addressing the Delivery Scale Dilemma under Drought Risk

Published online by Cambridge University Press:  26 January 2015

Michael C. Farmer ,
Aaron Benson ,
Xiaolan Liu ,
Sergio Capareda  and
Marty Middleton
Michael C. Farmer
Affiliation:
Department of Agricultural and Applied Economics, Texas Tech University, Lubbock, Texas
Aaron Benson
Affiliation:
Department of Agricultural and Applied Economics, Texas Tech University, Lubbock, Texas
Xiaolan Liu
Affiliation:
Illinois Institute for Rural Affairs, Western Illinois University, Macomb, Illinois
Sergio Capareda
Affiliation:
Biological and Agricultural Engineering, Texas A&M University, College Station, Texas
Marty Middleton
Affiliation:
Department of Agricultural and Applied Economics, Texas Tech University, Lubbock, Texas
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Abstract

Conversion of biomass to electricity is often not economically feasible as a result of large transportation costs and low output prices. We build a model of an adaptable biorefinery situated at an agri-processing facility that already has biomass on-site and consider the optimal scale of the plant to achieve a price premium by selling peaking power given uncertain biomass deliveries year over year as a result of climatic variability. We find that, for conservative electricity prices, a plant situated near cotton gins in Texas could operate with positive expected net revenue while converting on average only 38% of available biomass for peak electricity prices.

Keywords

biomassbiorefinerydroughtQ4Q16
Type
Research Article
Information
Journal of Agricultural and Applied Economics , Volume 46 , Issue 1 , February 2014 , pp. 57 - 71
Copyright
Copyright © Southern Agricultural Economics Association 2014

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