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Stefano Consonni Politecnico di Milano
Department of Energy Engineering Cost-benefit
analysis of gasification-based biorefining at US
kraft pulp mills a study carried out with Eric D.
Larson, Princeton University Ryan Katofsky,
Navigant Consulting Inc. Kristiina Iisa and Jim
Frederick, Institute of Paper Science and
Technology
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Earlier work

• 1996-98
• Technical and economic assessment of 3 black
  liquor gasification technologies for BLGCC
• 2002-03
• Cost-benefit assessment of black liquor
  gasification for power generation in the PP
  industry. Focus on US South-East

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The bio-refinery concept
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Motivations
Replace Tomlinson boilers with BLG to improve
competitiveness higher energy efficiency,
reduced emissions, modified pulping strategies,
improved safety. Opportunity for new revenue
streams from sale of biofuels and bio-based
chemicals. Utilization of woody biomass (beyond
existing residues) for added revenue.
Pulp Paper Industry Benefits
Increasing need for clean fuels to meet fuel
formulation requirements and new Federal
Renewable Fuel Standard Helps meet rising demand
for renewable energy, e.g., Federal Renewable
Fuel standard, state renewable portfolio
standards, and state renewable fuels
mandates1 Helps pulp and paper producers maintain
competitiveness in global markets - can help
retain jobs and contributions of this industry to
the U.S. economy.
Energy Industry Benefits
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U.S. Kraft Pulp/Paper Industry

• Uses gt1.5 quads/yr bioenergy, mostly black
  liquor.
• Needs new technology to stay globally
  competitive.
• Aging black liquor boiler fleet provides window
  of opportunity for gasification.

• USA, Sweden efforts to commercialize BL
  gasification.
• USDOE and US forest products industry supporting
  gasification-based biorefining.

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Biorefinery Products Selected

• Fischer-Tropsch Liquids (FTL)
• Synthetic crude refinable to zero-sulfur,
  high-cetane, low-particulate diesel blendstock
  and gasoline blendstock
• Ongoing explosion of investment globally in GTL,
  and growing CTL investments (China, USA).
• Dimethyl Ether (DME)
• Propane substitute or blendstock
• No-sulfur, no-particulate, high-cetane diesel
  fuel.
• Strong commercial investment in China (coal)
  growing commercial interest in Japan (gas)
  Swedish interest (biomass)
• Mixed Alcohols (MA)
• Mixture of ethanol and higher alcohols as a
  gasoline blendstock or separate components as
  chemicals.
• No commercial technology.
• Catalysts are mostly modified methanol or
  modified FTL catalysts, but performance (at bench
  scale) does not yet approach MeOH or FTL catalyst
  performance.

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Reference 2010 Kraft Pulp/Paper Mill

• Same reference mill as in 2003 BLGCC study
• Uncoated freesheet (65 HW, 35 SW), Southeast
  USA
• 1,580 metric t/d unbleached pulp rate (bone dry)
• 1,725 metric t/d paper rate (machine dry).
• Process steam use for projected state-of-art 2010
  mill.
• Pulping technology adopted
• Conventional kraft with Tomlinson chemical
  recovery.
• Polysulfide with gasification chemical recovery.
• Power/fuels/recovery area
• 6 x 106 lbs/day black liquor solids (2721 metric
  t/d) with conventional kraft 5.4 x 106 lbs/day
  with polysulfide.
• Hog fuel from pulpwood purchased residues if
  needed.
• Delivers all mill process steam and some
  electricity.

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Black Liquor Gasifier

• Single gasifier design for all biorefinery
  designs to maximize learning relating to fuels
  vs. electricity.
• Pressurized, high-temperature, O2-blown (Chemrec)
  design selected.
• Prior BLGCC analysis indicated more favorable
  cost and performance than with low-temp BLG.

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Seven Biorefineries Designed

• 3 FT designs, 3 DME designs, 1 MA design
• Pressurized, high-temp. black liquor gasifier in
  all cases.
• Same black liquor availability in all cases.
• Choice of design/technology for power island and
  for fuel synthesis island determine woody biomass
  needs.
• For 6 out of 7 of the designs
• Pressurized fluid-bed gasifier for hog fuel and
  purchased wood wastes amount of purchased wood
  waste is 10 to 63 of pulpwood processed at mill
  prior to converting to biorefinery.
• Gas turbine combined cycle power island (GE 6FA
  in five cases)
• Hog fuel/wood waste boiler steam turbine in one
  design.
• Single-pass or recycle fuel synthesis island.

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Two of our 3 DME biorefineries
DMEa
DMEb
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Third of our 3 DME biorefineries
DMEc
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Two of our 3 FT biorefineries
Pressurized, high- temp gasifier
Syngas cooling cleaning
Rectisol for H2S and CO2 removal
Once-thru LP FT synthesis
Black liquor (80 ds)
sulfur to polysulfide liquor preparation
condensed phase to causticizing
oxygen
Air separation unit
unconverted synthesis gas
air
clean biomass syngas
FTa
CRUDE F-T LIQUIDS (to existing refinery)
oxygen
Gas Turbine CC (Frame 6FA GT)
Fluidized-bed gasifier
Syngas cooling cleaning
Dryer
ELECTRICITY
process steam to mill
recovered process heat
Biomass chips (50 mc)
Pressurized, high- temp gasifier
Syngas cooling cleaning
Rectisol for H2S and CO2 removal
Once-thru LP FT synthesis
Black liquor (80 ds)
sulfur to polysulfide liquor preparation
condensed phase to causticizing
oxygen
Air separation unit
unconverted synthesis gas
air
FTb
clean biomass syngas
CRUDE F-T LIQUIDS (to existing refinery)
oxygen
Gas Turbine CC (Frame 7FA GT)
Fluidized-bed gasifier
Syngas cooling cleaning
Dryer
ELECTRICITY
process steam to mill
recovered process heat
Biomass chips (50 mc)
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Third of our 3 FT biorefineries
FTc
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Our Mixed Alcohol (MA) Biorefinery
Published kinetic data we used to build MA
synthesis model are dated, but only ones
available in the public domain. Large
uncertainties about potential Nth technology
performance (and cost).
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FTc Detailed Mass/Energy Balance
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Summary of Technologies
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Overall energy balances
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Efficiencies 1st-Law vs electrical equivalent
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Biomass chargeable to fuel production
?LHV of stand-alone biomass-fired plant
(bio-IGCC) 49.5
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Comparing Effective Liquid Fuel Yields
Integrating biorefinery with pulp mill
effectively reduces amount of biomass needed to
make a unit of liquid fuel versus stand-alone
biofuel production, since some biomass is charged
to services provided to the mill (chemical
recovery, process steam and power).
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Forest-to-Wheels Emissions Analysis
CO2, NOx, SO2, CO, VOC, PM10
The Forest Biorefinery Fuel Chain

• Net electricity purchases/exports
• Other fuel consumption

Developed in this study
Derived primarily from GREET model (Argonne
National Lab)
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CO2 Reductions in 2010
Net WTW (Forest-to-Wheels) CO2 emissions per
Biorefinery in 2010 (short tons)
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Capital Cost Estimation

• Nth plant costs, as for prior BLGCC study
• Factored equipment cost estimates from BLGCC
  study (or engineering firms data sources),
  supplemented by cost quotes for some equipment as
  needed.
• Indirect costs, contingencies, owners costs as
  for BLGCC.
• Uncertainty 30.
• For the F-T synthesis, direct estimate for
  small-scale system (no scaling of large synthesis
  reactor costs).
• For other major equipment (biomass gasifier,
  syngas cooler, particulate gas filter, Rectisol),
  largely based on Nexant in-house data.
• All costs expressed in mid-2005. Assume same
  site conditions and plant availability as for
  BLGCC study (98 availability with no spares,
  8500 hours/year).

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Nth Plant Installed Capital Costs
(a) From 2003 BLGCC study, with costs originally
in 2002 escalated to 2005. The BLGCC costs
shown here are for the case with mill-scale gas
turbine and high-temperature BLG. (h) Assumed to
be 4 of overnight installed capital costs
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Specific investment chargeable to fuel
Integrating a biorefinery with a pulp/paper mill
reduces the effective capital required to the
level characterizing very-large CTL facilities.
(An appropriate amount of the total capital is
charged against chemical recovery and energy
services provided to the mill).
Only technology options available in the
relatively near-term are shown.
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Mill-Level Financial Analysis

• Two energy price scenarios based on EIA Reference
  and High oil price scenarios (Annual Energy
  Outlook 2006)
• Reference Energy Price (REP) Scenario
• 25-yr levelized crude oil price 50/bbl
• Tight Supplies Energy Price (TSEP) Scenario
• 25-yr levelized oil price 78/bbl
• Additional sensitivity analyses on
• Capital cost estimates
• Biomass price (purchased for energy, not paper
  production)
• Electricity prices
• With and without different renewable energy
  incentives

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Product prices span a wide range, with mixed
alcohols expected to receive the greatest revenue
(/MMBtu).
Energy Price Analysis
Estimated Biorefinery Product Plant Gate Prices
No Incentives, constant dollars
Source Based on the DOE Energy Information
Administration Annual Energy Outlook 2006
national average price forecasts. The Tight
Energy Supplies scenario is based on the high
price case in the AEO and is consistent with an
extrapolation of current prices. The Reference
scenario is based on the reference price case
in the AEO and is based on a moderation of energy
prices consistent with petroleum in the
45-55/barrel range. FT Crude is based on low
sulfur crude oil on an energy basis. Mixed
alcohols are the same as ethanol on an energy
basis. Note that the AEO prices have been
corrected for wholesale vs. plant gate and other
factors. See main text for additional explanation
of the approach to estimating product prices.
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In Reference Energy Price scenario, all but one
option has IRR near or above the 15 hurdle rate,
without incentives.
IRR and NPV Reference Energy Prices
Biorefinery Economics No Incentives, Reference
Energy Price Scenario
Note All financial calculations are for the
incremental costs and savings relative to the New
Tomlinson Case, that is, the replacement of a
Tomlinson boiler that has reached the end of its
useful life.
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In Tight Supplies Energy Price scenario, most
options have IRR of 20 to 30, without
incentives.
IRR and NPV Tight-Supplies Energy Prices
Biorefinery Economics No Incentives,
Tight-Supplies Energy Price Scenario
Note All financial calculations are for the
incremental costs and savings relative to the New
Tomlinson, that is, the replacement of a
Tomlinson boiler that has reached the end of its
useful life.
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The U.S. pulp/paper industry has the capability
to produce 9 billion gallons/yr (34 billion
liters/yr) or more of liquid biofuel.
National Impact Analysis for the US

• Some Comparative Statistics
• 2012 RFS target 7.5 billion gallons (28.4
  billion liters)
• 2005 U.S. corn ethanol production 4 billion
  gallons (15 of corn crop)
• 2005 U.S. biodiesel production 75 million
  gallons (284 million liters)
• Annual U.S. gasoline diesel consumption ? 170
  billion gallons (643 billion liters)

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Conclusions - 1

• Gasification-based pulp mill biorefining, once
  fully commercialized, offers
• Potential for attractive investment returns to
  private sector.
• Contributions toward national petroleum savings,
  emissions reductions, improved energy security,
  and rural economic development that could be two
  times or larger the size of contributions from
  the existing U.S. corn-ethanol industry.
• Benefits arise, fundamentally, due to integration
  of biorefinery with pulp and paper mill
  biorefineries provide chemical recovery services,
  process steam, and process electricity to a mill
  in addition to exporting liquid fuel and
  electricity.
• Technologies for gasification-based biorefining
  are either commercially used today (in
  non-biorefinery applications) or are undergoing
  pilot-scale demonstration. This could lead to
  commercial-scale facilities beginning to be built
  in the next decade (2010-2020 timeframe).

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Conclusions - 2

• The first plants are subject to higher risk and
  can be expected to give lower financial
  performance. This may discourage private-sector
  commercialization efforts. Multiple public
  benefits justify private-public partnerships to
  commercialize pulp mill biorefining.
• Fuels production is largely outside the
  experience of todays forest products industry,
  and capital requirements are large, so strategic
  partnerships with other relevant industries
  (e.g., petroleum, electricity) would be
  beneficial.

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Full Report
http//www.princeton.edu/energy/publications/text
s.html

• Volume 1 Main Report.
• Volume 2 Detailed Biorefinery Design and
  Performance Simulation.
• Volume 3 Fuel Chain and National Cost-Benefit
  Analysis.
• Volume 4 Preliminary Biorefinery Analysis with
  Low-Temperature Black Liquor Gasification.

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Acknowledgements

• Steering Committee
• Craig Brown/Del Raymond Weyerhaeuser
• Theo Fleisch/Mike Gradassi BP
• Paul Grabowski U.S. Department of Energy
• Jennifer Holmgren UOP
• Tom Johnson Southern Company
• Mike Pacheco National Renewable Energy
  Laboratory
• Steve Kelley North Carolina State University
• Lori Perine American Forest Paper Association
• David Turpin MeadWestvaco
• Additional Resource Persons
• Ron Reinsfelder Shell Global Solutions
• Gord Homer Air Liquide
• Many Others!

• Primary funding from
• U.S. Department of Energy, Office of the Biomass
  Program
• American Forest and Paper Association
• Georgia Tech/IPST Gasification and Biorefinery
  Development Program

... and thanks to you for your attention !
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Potential Biorefinery Markets

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Catalytic Synthesis of Liquids
Slurry-type reactor
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Nth Plant Performance Summary
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NOx emissions in year 2010
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Biorefinery Installed Cost by Plant Area
Production of clean syngas accounts for 40-50 of
installed cost in most cases (60 for FTc). With
recycle of unconverted syngas in synthesis
island, the synthesis area is considerably more
costly than with once-through
synthesis. Fraction of cost due to acid gas
removal (AGR) varies substantially from one case
to another, depending on H2S and CO2 removal done.
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Capital cost chargeable to fuel production
Overnight cost of stand-alone biomass-fired plant
(bio-IGCC) 968 /kWel
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Effective Biofuel Production Cost
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Levelized 2010-2034 costs of energy commodities