Marginal cost of delivering switchgrass feedstock and producing cellulosic ethanol at multiple biorefineries

Limited information is available regarding the change in cost to deliver dedicated energy crop feedstock as the quantity of required feedstock increases. The objective is to determine the marginal cost to produce and deliver switchgrass feedstock to biorefineries. A mathematical programming model that includes 77 production regions (Oklahoma counties), monthly feedstock requirements, integer activities for harvest machines and integer activities for each of 16 potential biorefinery locations was constructed. The model was initially solved for a single biorefinery. The number of plants was incremented by one and the model resolved until nearly 10% of the cropland and improved pasture land was converted to switchgrass. The estimated cost to deliver 1.0 Mg of feedstock to a single 189 dam³ y⁻¹ capacity biorefinery is 55 $. The cost to deliver feedstock increases as additional biorefineries are constructed and the cost for the ninth biorefinery of 87 $ Mg⁻¹ is 58% greater than the cost to deliver to the first biorefinery. The cost difference is primarily due to differences in transportation cost. Initial cellulosic biorefineries will have an opportunity for establishing a feedstock cost advantage by carefully selecting land for conversion to switchgrass and by negotiating long term leases.