Supply analysis of preferential market incentive for energy crops
Abstract
Abstract This analysis explores the valuation of feedstock quality attributes of switchgrass and miscanthus – two energy crops poised for future expansion – and compares the relative economic availability of these two crops under two scenarios: (i) uniform price assumptions (i.e., no incentive for quality), and (ii) a scenario of a price premium based on convertibility (i.e., an incentive for quality). Given data on cellulose content, hemicellulose content, and their relative convertibility, miscanthus is expected to be 11% more efficient at conversion to biofuels than switchgrass under the biochemical conversion route. Based on this scenario of improved conversion efficiency and associated profit, we simulate an 11% price premium for miscanthus over other feedstocks in a base‐case scenario. By adding this price premium, supplies of miscanthus increase over the base case by about 4 million (44%), 94 million (64%), and 166 million (94%) tons in year 0, 10, and 20 after simulated contracts for production are initiated respectively. These results emphasize that custom simulations are needed to quantify feedstock availability if supplies are intended to reflect grower response to industry demands for feedstock quality specifications. Farmers can grow ‘peas or carrots’, and price signals from biorefineries will influence what energy cropsmore »
- Authors:
-
[1];
[1];
[1]
- Oak Ridge National Lab. (ORNL), Oak Ridge, TN (United States)
- Univ. of Tennessee, Knoxville, TN (United States)
- Publication Date:
- Research Org.:
- Oak Ridge National Laboratory (ORNL), Oak Ridge, TN (United States)
- Sponsoring Org.:
- USDOE Office of Energy Efficiency and Renewable Energy (EERE)
- OSTI Identifier:
- 1784149
- Alternate Identifier(s):
- OSTI ID: 1804542
- Grant/Contract Number:
- AC05-00OR22725
- Resource Type:
- Accepted Manuscript
- Journal Name:
- Biofuels, Bioproducts & Biorefining
- Additional Journal Information:
- Journal Volume: 15; Journal Issue: 3; Journal ID: ISSN 1932-104X
- Publisher:
- Wiley
- Country of Publication:
- United States
- Language:
- English
- Subject:
- 09 BIOMASS FUELS; billion-ton report; policy analysis system model; supply uncertainty; quality variability
Citation Formats
Oyedeji, Oluwafemi, Langholtz, Matthew H., Hellwinckel, Chad, and Webb, Erin. Supply analysis of preferential market incentive for energy crops. United States: N. p., 2021.
Web. doi:10.1002/bbb.2184.
Oyedeji, Oluwafemi, Langholtz, Matthew H., Hellwinckel, Chad, & Webb, Erin. Supply analysis of preferential market incentive for energy crops. United States. https://doi.org/10.1002/bbb.2184
Oyedeji, Oluwafemi, Langholtz, Matthew H., Hellwinckel, Chad, and Webb, Erin. Mon .
"Supply analysis of preferential market incentive for energy crops". United States. https://doi.org/10.1002/bbb.2184. https://www.osti.gov/servlets/purl/1784149.
@article{osti_1784149,
title = {Supply analysis of preferential market incentive for energy crops},
author = {Oyedeji, Oluwafemi and Langholtz, Matthew H. and Hellwinckel, Chad and Webb, Erin},
abstractNote = {Abstract This analysis explores the valuation of feedstock quality attributes of switchgrass and miscanthus – two energy crops poised for future expansion – and compares the relative economic availability of these two crops under two scenarios: (i) uniform price assumptions (i.e., no incentive for quality), and (ii) a scenario of a price premium based on convertibility (i.e., an incentive for quality). Given data on cellulose content, hemicellulose content, and their relative convertibility, miscanthus is expected to be 11% more efficient at conversion to biofuels than switchgrass under the biochemical conversion route. Based on this scenario of improved conversion efficiency and associated profit, we simulate an 11% price premium for miscanthus over other feedstocks in a base‐case scenario. By adding this price premium, supplies of miscanthus increase over the base case by about 4 million (44%), 94 million (64%), and 166 million (94%) tons in year 0, 10, and 20 after simulated contracts for production are initiated respectively. These results emphasize that custom simulations are needed to quantify feedstock availability if supplies are intended to reflect grower response to industry demands for feedstock quality specifications. Farmers can grow ‘peas or carrots’, and price signals from biorefineries will influence what energy crops they produce. Recognizing that the energy crop mix is tractable according to quality characteristics is relevant both for near‐term and long‐term biofuels research and development. We recommend accounting for market preferences for quality attributes when estimating potential future supplies of energy crops. © 2021 Society of Chemical Industry and John Wiley & Sons, Ltd},
doi = {10.1002/bbb.2184},
journal = {Biofuels, Bioproducts & Biorefining},
number = 3,
volume = 15,
place = {United States},
year = {Mon Feb 01 00:00:00 EST 2021},
month = {Mon Feb 01 00:00:00 EST 2021}
}
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