Price uncertainty, policy, and the economic feasibility of cellulosic biorefineries

This paper quantifies the impacts of commodity price uncertainty and major renewable energy policies on the economic feasibility of cellulosic biorefineries. Four n^th plant cellulosic biorefinery scenarios are developed via techno-economic analysis to calculate 20-year net present value (NPV) probability distributions and probabilities of default. While individual policy scenarios are unable to make the pathway scenarios economically feasible in the form of positive median 20-year NPVs and low probabilities of default, combinations of policy scenarios that reflect the existing operating environment are able to do so. This result is seemingly incongruous with the large cellulosic biofuel production shortfall that currently exists in the United States but a pioneer plant analysis finds that current policies are unable to make ‘first-of-their-kind’ cellulosic biorefineries economically feasible. The results of the pioneer plant analysis suggest that additional policy support is needed if cellulosic biorefineries are to overcome the pioneer plant hurdle.