Economic implications of cotton gin trash and sorghum residues as alternative energy sources

Energy in Agriculture, 1 (1981--1983)267--280 Elsevier Scientific Publishing Company, Amsterdam -- Printed in The Netherlands

267

ECONOMIC IMPLICATIONS OF COTTON GIN TRASH AND SORGHUM RESIDUES AS ALTERNATIVE ENERGY SOURCES

S H A R I F M. MASUD 1, RONALD D. LACEWELL l and EDWARD A. HILER ~ 1Department o f Agricultural Economics, Texas A & M University, College Station, T X 77843 (U.S.A.) 2Department o f Agricultural Engineering, Texas A & M University, College Station, T X 77843 (U.S.A.) Technical article 17424 of the Texas Agricultural Experiment Station. This research was funded in part by the Center for Energy and Mineral Resources, Texas A & M University, and the Texas Energy and Natural Resources Advisory Council. Comments by anonymous reviewers and editing by Ms. Kathy Kendall are gratefully acknowledged. (Accepted 1 September 1982)

ABSTRACT

Masud, S.M., Lacewell, R.D. and Hiler, E.A., 1983. Economic implications of cotton gin trash and sorghum residues as alternative energy sources. Energy Agric., 1 : 267--280. This paper analyzes the economic implications of energy production from cotton gin trash and sorghum residues. Using cotton gin trash, on-farm cost of gasification ranged from $7.83 to $3.56 per million Btu, electricity generation, operating year around was about 6.15 cents per kwh. Cost of producing gas, using gin trash or grain sorghum residue, in a farmer cooperative was over $3.75 per million Btu. These costs are not economically attractive at this time. Using gin trash at the gin site, the cost of electricity generation was 5.3 cents per kWh and gas production was $2.75 per million Btu. A b o u t 70% of the electricity produced, however, must be sold for approximately 2 cents per kWh resulting in over $250,000 of costs not covered. Although gas production at the gin site is very competitive with the current market price of natural gas, the low Btu gas is not a comparable fuel. The cost of producing pellets from gin trash for energy ranged from $2.20 to $3.89 per million Btu. Gin trash pellets are not competitive with natural gas, but they are a potentially attractive alternative to diesel or fuel oil as a stationary engine fuel source.

INTRODUCTION T h e r e is m u c h i n t e r e s t in t h e e c o n o m i c p o t e n t i a l o f p r o d u c i n g e n e r g y f r o m a g r i c u l t u r a l b i o m a s s . A g r i c u l t u r a l b i o m a s s is a p o s s i b l e a l t e r n a t i v e t o s o m e o f the increasingly scarce and costly traditional energy sources. A l t h o u g h t h e p r o d u c t i o n o f s u b s t a n t i a l q u a n t i t i e s o f e n e r g y f r o m agric u l t u r a l b i o m a s s is t e c h n i c a l l y f e a s i b l e , c o n s i d e r a b l e u n c e r t a i n t y e x i s t s o v e r e c o n o m i c f e a s i b i l i t y . T h e p u r p o s e o f t h i s p a p e r is t o e x a m i n e s o m e s p e c i f i c c a s e studies and analyze energy production from agricultural biomass, the potential

0167/5826/83/0000--0000/$03.00

© 1983 Elsevier Scientific Publishing Company

268

for farms to become energy self-sufficient, and the economic implications that would be associated with producing energy from agricultural biomass. For onfarm energy production, grain sorghum residue and c o t t o n gin trash are evaluated in an electricity generation and gasification context. Next, the use of gin trash at the gin site to produce energy is presented. A large cooperative for production of low Btu gas from crop residues and grain sorghum is also discussed. Finally, a production process for converting gin trash to pellets as an energy source is described. For gin trash pelleting the total costs associated with each of the production processes, the costs in terms of energy (MBtu, 1 Btu = 1.055 kJ), and the sensitivity of costs to changes in some of the variables involved are discussed. ON FARM

The economic feasibility of developing energy from agricultural residues was analyzed based on 640 acres (259 ha) of irrigated land with four wells and good TABLEI Characteristics of typical 640-acre (259.2 ha) irrigated cotton farm relative to gin trash and energy potential from on-farm gasification using a dual-fluidized bed: unit size of 8.5 MBtu In and 5.2 MBtu Out per h Item

Unit

Value

Energy in gin trasha Gin trash produced Total gin trash energy Total energy recovery b Energy used for irrigationc Additional gin trash required Days 4 wells p u m p Days 2 wells p u m p Fluidized-bed combustor and automatic feederd Fixed cost on investment Fixed cost on investment e Operation costsf Operation costs Total costg

Btu/kg 1000 kg MBtu MBtu MBtu 1000 kg days days $ S/year $/MBtu S/year $/MBtu $/MBtu

3,175.2 162.0 2,499.7 1,524.8 5,534.0 425.9 34.5 69.0 175,000.00 30,975.00 5.60 12,322.00 2.23 7.83

aSource: Oursboum et al. (1978). bSource: Beck and Parker (1979) (61% conversion). c Based on the improved furrow irrigation system, otherwise the value is 8788 MBtu. dBased on bids taken by Tex. A&M Univ. and as reported by Levelton and O'Connor (1978). e Based on total production of 5534 MBtu of gas. For 8788 MBtu of gas it would be

$3.53. f Derived from Beck and Parker (1979) by scaling down and deleting labor, income tax, and depreciation (part of fixed costs) and setting feedstock cost t o $15 per ton (907.2 kg) for moduling, handling, transportation and storage (Moore et al., 1982). g Does not include a distribution cost, gas clean-up cost or cost associated with derating an engine for the lower Btu gas.

269

groundwater (Lacewell et al., 1978). The region of emphasis was the Texas High Plains. However, most of the coefficients are applicable to any region of the U.S.A.

Gasification Cotton gin trash was considered as a feedstock to a fluidized-bed gasification system, as discussed b y Beck and Parker (1979}. The objective was to produce sufficient gas to exactly offset irrigation energy requirements of a c o t t o n farm (Table I). It is assumed that the gin trash is put in modules of 9071.8 kg each. The cost to purchase, module, transport and store gin trash is taken from Moore et al., 1982. The feedstock input rate was 544.3 kg per h or 13,063.2 kg per day. The system would be used at about one-tenth of capacity since irrigation does not occur throughout the year. For this system, operation costs alone approach current natural gas costs. Because the system would not be used all year long, cost per million Btu is very high, i.e., $7.83. This is compared to a current natural gas price of near $3.50 (Table I). Table II extends use of the system to 292 days per year. This is 80% utilization and approximates electrical generating facilities (Pollard, 1982). The plant over I year requires 3,859,935 kg of trash or gin trash from about 4374 TABLE

II

Year around operation of on-farm fluidized-bed gasification unit: unit size 8.5 MBtu In and 5.2 MBtu Out per h a Item

Unit

Value

Total gin trash required Total energy produced Investmentb Fixed costs Operation costs c Feedstock costs d Total annual cost Cost of gas production e Energy produced beyond irrigation

1000 kg MBtu $ S•year S/year S/year S/year $/MBtu MBtu

3,859.9 36,441.6 175,000.00 30,975.00 34,937.00 63,822.00 129,734.00 3.56 30,907.6

aBased on 8 0 % utilization or 292 days of operation annually. The gas produced must be cleaned up for use in an internal combustion engine. bBased on bids received by Tex. A & M Univ. c Derived by scaling d o w n Beck and Parker (1979) estimates. Costs of operation and maintenance are not well developed. dFeedstock costs are considered as cotton gin trash purchased, moduled, transported and stored at $15/ton (907.2 kg) (Moore et al.,1982). e Does not include clean-up of gas produced, distribution system or derating an engine for the lower Btu gas.

270

ha of c o t t o n production. In this system, gas production b e y o n d irrigation n e e d s would have to be sold for credit or used in other farm activities. The cost of gas production in this case looks much more attractive at $3.56 per million Btu. However, the cost estimate does not include a clean-up charge or cost to derate an engine to use the low Btu gas. Also, even clean low Btu gas is unsuitable for pipeline distribution. Thus, a direct comparison of low Btu gas to natural gas is n o t really feasible. The costs of production of the low Btu gas are expected to be slightly higher when using grain sorghum residue due to lower Btu per p o u n d and field baling and hauling (Lacewell et al., 1982).

Electricity generation The evaluation of an on-farm electrical generation unit also involves a fluidized-bed combustor, boiler and turbine. The size is sufficient to satisfy energy requirements of all four wells of the typical farm. Surplus electrical TABLE

III

On-farm electricalgeneration using cotton gin trash for use by irrigationwells with credit for surplus generation: unit size 7.7 M B t u In and 339 k W Out per h a Item

Unit

Value

Electrical output of generator Equipment investment b Other start-up costsc Cotton gin trash required d Energy produced e Energy produced Energy not used for irrigation Fixed cost on investment Feedstock costs Operating costsc Total costsf Total costsf Credit for sale Total creditg Net producer costs

kW $1000 $1000 1000 kg MBtu/year 1000 k W h 1000 k W h S/year S/year S/year S/year c/kWh c/kWh S/year S/year

339 275 13.2 3,496.7 53,961.6 2,375.7 2,094.0 48,675.00 57,816.00 39,560.00 146,051.00 6.15 2.00 41,880.00 104,171.00

aBased on a 259.2 ha farm with 4 irrigation wells. It is assumed the system is operated year around using a fluidized-bed combustor, boiler and prime mover to generate electricity. bBased on bids received by Tex. A & M Univ. Includes an allowance for an automatic feeder to the fluidized-bed combustor. c Derived from Beck and Parker (1979) estimates and scaled down. dThis is trash from over 2,268,000 kg of cotton lint or 385 modules. e Based on 8 0 % utilizationor 292 days per year (K. Pollard, Dep. Agric. Eng., Tex. A & M Univ., personal communication, 1982). f Does not include cost of distribution and assumes cotton gin trash is purchased, moduled, transported and stored for $15 per ton (907.2 kg) (Moore et al.,1982). Operation and maintenance costs are not well developed. glncludes a credit of $8982 for irrigation fuel costs provided by the system.

271

generation would need to be put into a grid system for a credit. An on-farm electrical generation unit requires about 500 kg of gin trash per h or 3.504 million kg a year based on 292 operating days. Total investment for the plant is $275,000. Annual fixed costs would be about $50,000, cost to module, deliver and store c o t t o n gin trash $57,816 and operating costs $39,560. This means an annual outlay of nearly $150,000 to produce 2,375,700 kWh of electricity. This amounts to a cost of 6.15 cents per kWh (Table III). Some $8900 of electricity purchase is avoided by using the on-farm generation plant, and 2 million kWh of electricity are available for sale. This study used an arbitrary 2 cents per kWh credit. The net result of electrical generation is $104,171 of costs not covered. COTTON GIN

The most advantageous place to use gin trash for energy is at the cotton gin. For this analysis, a large super-gin concept is applied (Lacewell et al., 1981). The gin size is set at 40,000 bales (9,072,800 kg of lint) per year which is much greater than the average. This gin would have 13,607,800 kg of gin trash available or 1500 modules of 9071.8 kg each (Table IV). TABLE IV Characteristics of gin trash utilization for energy production at the gin site Item

Unit

Value

Gin size Gin trash a Energy generation Gin trash use Energy in trash Fluidized-bed combustor b Boiler and prime mover b Gin energy use c

1000 kg lint/year 1000 kg days/year kg/h MBtu/h $ investment $ investment kWh/bale

9,072 13,607.8 292 1,941.8 30 520,000 348,400 120

aThis would be 1500 modules each 9071.8 kg. A fire and deterioration cost are not included. bBased on bids received by Tex. A&M Univ., 1978 (B. Holm, Tex. A&M Univ., personal communication, 1978). CBased on C. Parnell, Dep. Agric. Eng., Tex. A&M Univ., personal communication (1979). Typically 60 kWh of energy are used in ginning and 60 kWh in drying each bale (226.8 kg) of cotton lint.

It is assumed that only the gin trash available at this case study gin would be used for energy generation. Basically, energy would be produced as either electricity or gas via gasification. In both cases a fluidized-bed would be used. The rate of use of gin trash would be 30 million Btu per h (1944 kg) based on a 292 days o f operation per year.

272

Elec trical genera tion F o r t h e basic s i t u a t i o n o u t l i n e d a b o v e , t h e i m p l i c a t i o n s o f using a fluidizedb e d in c o n j u n c t i o n w i t h a boiler and t u r b i n e t o g e n e r a t e e l e c t r i c i t y w e r e investigated. T h e e x p e c t e d i n v e s t m e n t in e q u i p m e n t w o u l d b e $ 8 6 8 , 4 0 0 a n d t h e e l e c t r i c i t y p r o d u c e d w o u l d be 7 . 7 7 5 million kWh p e r y e a r . T h e gin uses 2.4 m i l l i o n kWh p e r y e a r o f e l e c t r i c i t y f o r ginning a n d a like a m o u n t o f e n e r g y f o r d r y i n g t h e c o t t o n (Table V). TABLE V Economic implications of electricity generation using gin trash at the gin site a Item

Unit

Value

Energy input Energy output Investment Annual fixed costs Cost of gin trash b Variable costs of operation c Total costs Total energy produced Cost per unit Gin electricity replaced Gin drying energy replaced d Electricity sold e

MBtu/h kW/h $ $ S/year S/year S/year 1000 kWh c/kWh 1000 kWh 1000 kWh 1000 kWh

30 1,321 868,400 153,700 75,000 183,550 412,250 7,775 5.30 2,400 2,400 5,375

aBased on a 40,000 bale (9,071,800 kg) per year gin using trash from this gin only. Based on 30 MBtu/h of gin trash being burned in a fluidized-bed with 17% efficiency in the electricity generation process. bBased on a gin trash cost of $5 per ton (907.2 kg) to module and store with no transportation or purchase costs (Moore et al., 1982). c Estimated based on Beck and Parker (1979). Cost of operation of the boiler and turbine are not well established. dIt is assumed waste heat is used for drying the cotton. eIt is assumed electricity is placed into a system for a credit of 2 c/kWh. No provisions for distribution have been included.

A n n u a l c o s t s o f g e n e r a t i n g t h e 7 . 7 7 5 million kWh o f e l e c t r i c i t y is e s t i m a t e d t o b e $ 4 1 2 , 0 0 0 . T h i s m e a n s t h e c o s t p e r kWh is a b o u t ~5.3 cents. This c o s t is c o m p e t i t i v e w i t h c u r r e n t rates in t h e region ( T a b l e VI). H o w e v e r , t h e e c o n o m i c feasibility is n o t d i r e c t l y b a s e d o n local rates f o r e l e c t r i c i t y . F o r t h e case s t u d y it is e s t i m a t e d t h a t t h e gin will use w a s t e h e a t f o r drying. Also, all e l e c t r i c i t y r e q u i r e m e n t s o f t h e c o t t o n gin are satisfied. T h e e l e c t r i c i t y r e p r e s e n t s $ 1 6 8 , 0 0 0 o f e x p e n s e s n o t i n c u r r e d b y t h e gin. T h e 5 . 3 7 5 million k W h o f surplus e l e c t r i c i t y {above gin needs) are sold to a d i s t r i b u t o r f o r 2 c e n t s p e r kWh w h i c h is far b e l o w t h e 5.3 c e n t s c o s t t o generate. T h e 2 c e n t s p e r k W h is a basic c r e d i t c u r r e n t l y p r a c t i c a l in t h e region a n d a m o u n t s

273 TABLE VI Summary of electrical generation at gin site using gin trash Item

Unit

Value

Energy produced Surplus energy produced Cost of generation Cost of generation Typical gin electricity costs a Typical gin energy costsa Gin credits from generation Energy costs not purchased Electricity soldb Total Net cost of electrical generation

1000 kWh 1000 kWh S/year c/kWh S/year S/year

7,775 5,375 412,250 5.30 168,000 36,000

S/year S/year

204,000 107,500 311,500

S/year

100,750

--4-

aGiven a 40,000 bale (9,071,800 kg) per year gin which is much larger than the average. bBased on 5,375,000 kWh sold at 2 c/kWh. to the cost o f fuel f or electrical generation by t he p o w e r com pany. These sales give an income o f $107,500. Thus, total credit for electrical generation is an estimated $311,500. Since total costs of p r o d u c t i o n were $412,000, there are a b o u t $ 1 0 0 , 7 5 0 of expenses n o t covered.

Gasification F o r gasification, the fluidized-bed is used with a 61% efficiency o f Btu's in and Btu's available as a gas (Beck and Parker, 1979). The basic assumptions above apply except there is no boiler or turbine. The cost o f the fluidized-bed is $520,000. Total annual cost of gas production is an estimated $ 3 6 0 , 0 0 0 with 127,670 million Btu of gas produced. Thus, the cost per million Btu is an estimated $2.75. This is very competitive with the current market price of natural gas (Table VII). F o r this overall analysis, it must be emphasized t h a t there is no consideration o f costs required for distribution or gas clean-up. Also, an engine would need to be derated to use the low Btu gas produced. Operation costs of the boiler and turbine f or electricity generation are not well established. Many of the estimates are f r om different sources and require scaling up or down. Thus, there are serious limitations to comparing the cost of producing a low Btu gas to the natural gas m a r ket price. In all cases, year-round use of energy producing facilities is essential and means mo r e energy is p r o d u c e d than is needed by the gin. Thus, sales of surplus are required and normally the credit is substantially less than current m a r k e t price; i.e., electricity credit is 2 cents per kWh while the m arket price is over twice th e 2 cents.

274 TABLE VII Economic implications of gas production using gin trash at the

gin site a

Item

Unit

Value

Gas production Gas production Investment Fixed costs Cost to module trash b Variable cost of production c Total cost of production Total cost of production d

MBtu/h MBtu $ S/year~ S/year S/year S/year $/MBtu

18.3 127,670 520,000 92,040 75,000 183,550 350,590 2.75

aBased on 40,000bales (9,071,800 kg) per year using gin trash from this gin only. Based on 30 MBtu/h being burned in a fluidized-bed with 6 1 % efficiency (Beck and Parker, 1979) in gas production. bBased on a gin trash cost of $5 per ton (907.2 kg) to module and store with no transportation or purchase costs (Moore et al.,1982). c Estimate based on Beck and Parker (1979) scaled down. dDoes not include a cost to clean-up the gas nor any consideration of actual distribution.

ENERGY

COOPERATIVE

To provide insight into the feasibility of organizing a farmer cooperative to produce gas, a 1000-ton (907,200 kg) per day gin trash facility and 3000ton (2,721,600 kg) per day grain sorghum residue facility were considered. Cotton gin trash at 907,200 kg per day is fed to a fluidized-bed for gasification. A plant this size requires the gin trash from nearly three quarters of a million bales of cotton; i.e., 29,100 modules of trash at 9071,8 kg each. This represents approximately 1600 farmers with 200 ha of c o t t o n each. The costs of production were estimated to be $5.84 for one million Btu, b e y o n d economic feasibility particularly since there was no consideration of gas cleanup or distribution (Table VIII). Since grain sorghum residue may be much more dense with the added biomass production, and Beck and Parker (1979) indicate some economies of size, a 2,721,600 kg per day gasification facility was considered. Sorghum varieties are currently being developed which will produce in excess of 11,200 kg of residue per ha (F.L. Miller, Dep. Soil & Crop Sci., Tex. A & M Univ., personal communication, 1980). Assuming 11,200 kg of residue per ha with 2240 kg remaining on the land, leaves 8960 kg available for energy production. Some residues cannot be harvested and 1 t o n per acre (2,240 kg per ha) is required for erosion control and to protect soil productivity (OTA, 1980). F o r a 2,721,600 kg per day plant, grain sorghum residue from 88,300 ha of grain sorghum production would be required (Table IX). Cost of producing the gas is an estimated $3.78 per million Btu (Table VIII). Quantity of gas that could be produced would be 6,390,000 million Btu or

275 TABLE VIII Best case 1000-ton (907,200 kg) per day large-scale cooperative gasification of gin trash Item

Unit

Value

Associated cotton lint Gin trash a Total gas produced b Cost of gasificationc Cost of produced gasd Current cost of natural gas

106 kg 106 kg MBtu 10 ~ S/year $/MBtu $/MBtu

220.7 364.0 2,493,600 14.57 5.84 3.50

aA module of a compacted 10 ton (9071.8 kg) unit of cotton gin trash stores well and can be easily moved with specialized equipment. bBased on Beck and Parker (1979) conversion of 61%. c Based on wheat straw estimates of Beck and Parker (1979) with a feedstock cost of $10 per ton (907.2 kg) for moduling, transporting and storing gin trash (Moore et al., 1982), and deletion of income tax since the cooperative would not be directly taxed by the Internal Revenue Service (IRS). dDoes not include cost of gas clean-up for use in internal combustion engine, distribution of gas or derating an engine for use of low Btu gas.

TABLE IX Best case 3000-ton (2,721,600 kg) per day large-scale cooperative gasification of grain sorghum residue Item

Unit

Value

Sorghum residue energy a Sorghum residue required Sorghum residue required Total gas produced b Cost of gasificationc Cost of produced gas d Current cost of natural gas

Btu/kg 106 kg 1000 ha MBtu 106 S/year $/MBtu $/MBtu

2,722 792 88.39 6,390,000 24.155 3.78 3.50

aSource: Oursbourn et al. (1978). bBased on Beck and Parker (1979) conversion of 61%. c Based on Beck and Parker (1979) estimates with $6.9 million income tax deleted. The feedstock cost of $10 per ton (907.2 kg) approximate cost to bale and haul grain sorghum residues with 4 ton harvested per acre or (8960 kg per ha). There is no charge allotted to purchasing feedstock. dDoes not include cost to clean-up gas for use in internal combustion engine, distribution cost or any payment to farmer for feedstock and allowance for storage of a very large quantity of residue. enough to irrigate over 486,000 ha with a low pressure sprinkler system. With t h e $ 3 . 7 8 p e r m i l l i o n B t u p r o d u c t i o n c o s t a n d gross a s s u m p t i o n s o f n o c o s t f o r gas c l e a n - u p a n d n o c o s t o f d e r a t i n g a n e n g i n e f o r t h e l o w B t u gas, it c a n b e c o n c l u d e d t h a t t h i s large c o o p e r a t i v e g a s i f i c a t i o n s y s t e m is n o t n e a r - t e r m t e c h n o l o g y n o r is it e c o n o m i c a l l y f e a s i b l e .

276

PELLETING COTTON

GIN T R A S H

An approach that is expected to improve the economic potential for convetting gin trash to energy is compressing the gin trash into modules to facilitate storage and handling. The modules can then be transported to a centrally located plant for conversion to a pelletized solid fuel. The purpose of this section is to estimate the economic potential of this alternative means of energy production. Lubbock, TX, U.S.A., was chosen as the site for a hypothetical pelleting plant because it is the center of the most intensive stripperharvesting of cotton in the U.S.A. As of 1980, there are 231 active gins located within a 50-mile (78 km) radius of Lubbock; they gin approximately 1 million bales (226.8 million kg) of lint in a typical year. The amount of trash available for pelleting in a typical year would average 276,876 ton (253 million kg) for the 231 gins, or an average of almost 1200 ton {1,088,600 kg) per gin (Moore et al., 1982).

Costs of feedstock Costs associated with producing and delivering feedstock to a pelleting plant in L u b b o c k and of pelleting the feedstock are estimated by budgeting (Moore et al., 1982). Costs are estimated with the following base set of assumptions: (1) payment to gins of $5 per ton (907.2 kg) for use of the gin trash; (2) no pallets and tarpaulin used with modules; and (3) an average loss in heat value of 10%, equivalent to a maximum loss of 20% over a full 12-month period. This means that each kg of gin trash, rather than yielding 15,432 Btu, would yield 13,889 Btu's. The estimated cost of acquiring, handling and pelleting the product up to marketing is indicated in Table X. To show the effect on volume and on costs of acquiring feedstock from varying distances from Lubbock, the results are shown for three sets of assumptions regarding range of acquisition distances. One column in Table X shows the results if the acquisition of gin trash is restricted to within a 30-mile (47 km) radius of Lubbock. A second column shows results if acquisition is expanded to a radius of 40 miles (63 km), and a third column shows the results if expanded to a radius of 50 miles (78 km). If gin trash hauls are restricted to within a 47 km radius of Lubbock, total costs of feedstock to the pelleting plant would average $1.13 per MBtu. This compares with averages of $1.17 per MBtu if the hauls are expanded to within a radius of 78 km (Table X). Of the four components of feedstock costs considered (payments to gins, moduling, storage and transportation) payments to gins were the largest, amounting to $0.40 per MBtu or slightly over one-third of total feedstock costs. The costs of transportation were the second largest of the four components of feedstock costs. Transportation of gin trash hauled from a 78 km radius averaged $0.39 per MBtu, only 4 cents higher than the $0.35 per MBtu average if hauls were restricted to a 47-km radius. The profitability of hauls

277 TABLE X Production cost summary assuming a $5 per ton (907.2 kg) payment to gins, no use of pallets and tarp, and a 10% loss of heat value in feedstock Distance from Lubbock

Production Trash available (1000 kg/year) Energy production (MBtu/year) a

47 km radius

63 km radius

78 km radius

75,583 1,050,000

165,337 2,297,000

251,182 3,488,000

Cost of production ($/MBtu) Cost of feedstock to pelleting plant: Payment to gins Moduling Storage Transportation Total feedstock cost Cost of pelleting: Electricity Diesel fuel, lubes Repairs Salaries, labor, employment benefits Insurance, property taxes, rent, etc. Depreciation Total pelleting cost Total Production Cost

0.40 0.23 0.15 0.35

+

0.40 0.23 0.15 0.37

I-

0.40 0.23 0.15 0.39

1.13

1.15

1.17

0.39 0.07 0.40 0.48 0.11 0.33 +

0.39 0.07 0.40 0.45 0.10 0.30

0.39 0.07 0.40 0.44 0.09 0.30

1.78

1.71

1.69

2.91

2.86

2.86

~-

aAssuming an average of 13,889 Btu per kg of gin trash residue, which reflects heat loss of 10% from the original 15,432 Btu per kg.

f r o m l o n g e r distances, however, s h o u l d be evaluated in t e r m s of marginal r a t h e r t h a n average c o m p a r i s o n s .

Costs of pelleting T o t a l costs o f pelleting average $ 1 . 7 8 per MBtu if the gin trash pelleted is d r a w n f r o m within a 4 7 - k m radius o f L u b b o c k , c o m p a r e d with costs o f $ 1 . 6 9 p e r M B t u if the trash is d r a w n f r o m w i t h i n a radius o f 78 km. The slightly l o w e r unit costs w h e n hauls are e x p a n d e d t o a 7 8 - k m radius reflect slight size e c o n o m i e s in the salaries, insurance, taxes and d e p r e c i a t i o n c o m p o nents. A c t u a l l y , these size e c o n o m i e s were sufficient t o o f f s e t the effects o f higher t r a n s p o r t a t i o n o n the f e e d s t o c k costs. T o t a l p r o d u c t i o n costs (feeds t o c k and pelleting costs c o m b i n e d ) average $2.91 per MBtu f o r hauls within

278

a radius of 47 km compared with an average of $2.86 per MBtu for hauls within a radius of 78 km (Table X).

Sensitivity analysis Costs per MBtu with alternative assumptions in several of the variables are shown in Table XI. These alternative assumptions include the choice of whether or not to use pallets and tarp, payments per ton (907.2 kg) to gins of 0, $5, and $10, and average annual rates of heat loss of 0, 6% and 10%. Pallets and tarp are by far the most important of the cost variables consider ed. For pallets and tarp to be justified, savings in heat loss would have to be greater than the range considered here, or use would have to be justified on the basis of other factors, such as ease in handling and transportation. The significance of the level of payments to gin is reflected in Table XI. TABLE XI E s t i m a t e d cost p e r M B t u u n d e r a l t e r n a t i v e a s s u m p t i o n s regarding use of pallets a n d t a r p , p a y m e n t s t o gins, a n d energy loss d u e to d e t e r i o r a t i o n o f f e e d s t o c k a Use o f Pallets and Tarp

P a y m e n t ($) t o gins p e r t o n ( 9 0 7 . 2 kg)

Average % h e a t loss 0

6

10

Cost of f e e d s t o c k to pelleting plant ($) Yes Yes Yes No No No

0 5 10 0 5 10

Yes

0 5 10 0 5 10

1.27 1.63 1.98 0.68 1.04 1.40

1.35 1.73 2.11 0.73 1.11 1.49

1.41 1.81 2.20 0.76 1.17 1.55

Cost of pelleting ($) Yes Yes No No No

1.52 1.52 1.52 1.52 1.52 1.52

1.62 1.62 1.62 1.62 1.62 1.62

1.69 1.69 1.69 1.69 1.69 1.69

T o t a l p r o d u c t i o n c o s t ($)

Yes Yes Yes No No No

0 5 10 0 5 10

2.79 3.15 3.50 2.20 2.56 2.92

2.97 3.35 3.73 2.35 2.73 3.11

3.10 3.50 3.89 2.45 2.86 3.24

a A s s u m i n g t h e f e e d s t o c k is h a u l e d f r o m w i t h i n a radius o f 78 kin.

279 For each increase of $5 per 907.2 kg in payments, costs of feedstock increase from $0.35 to $0.40 per MBtu. It is expected the cost of feedstock delivered to a pelleting plant in L u b b o c k would range between $10 and $30 per ton (907.2 kg). CONCLUSIONS This paper is concerned with the analyses of low Btu gas production, electricity production and pelletized solid fuel production from agricultural biomass. The paper assesses some of the economic implications of agricultural biomass as an alternative source of energy. The results indicated that the cost per million Btu for gasification of cotton gin trash to exactly offset irrigation energy requirements of a 259-ha cotton farm was a b o u t $7.83. However, with year around gas production, a cost nearer to $3.56 per million Btu was estimated. These costs are expected to be slightly higher for grain sorghum residue due to field baling and hauling. Larger gasification plants (energy cooperative) using cotton gin trash or grain sorghum residue gave an estimated cost per million Btu's ranging from $3.78 to $5.84. On-farm electricity generation using cotton gin trash in a fluidized-bed combustor, boiler and turbine and operating year around was estimated to cost 6.15 cents per kWh. Much of the electricity produced could not be used on a farm and would be available for sale. Basically, the results for the irrigation farm analyses indicated that energy production potential from residues and gin trash are sufficient to offset total energy use on the farm where improved management techniques are being applied. But, the costs of gasification and electricity generation were greater than conventional fuels and thus do not appear to be economically attractive at this time. In addition, there were limitations of the study associated with storage of materials on a year around basis relative to distributing gas and electricity. However, in the future, as fuel prices adjust and new technology is developed, some of the on-farm energy production process may become more economically competitive. Based on a very large gin o f 40,000 bales (9,071,800 kg) per year, the use of gin trash at the gin site to produce electricity and gas is analyzed. The estimated cost of generating electricity was 5.3 cents per kWh. However, about 70% of the electricity must be sold for 2 cents per kWh resulting in over $250,000 of costs not covered. The cost per million Btu of gas produced was $2.75 which is very competitive with current costs of natural gas. However, these cost estimates do not include cost to clean up the gas, cost to derate engines for a low Btu gas, or any consideration of distribution of surplus power. Furthermore, even clean low Btu gas is unsuitable for pipeline distribution. A solid fuel from c o t t o n gin trash converted to energy pellets would cost between $2.20 and $3.89 per million Btu at Lubbock, TX. This does not include costs of distribution from L u b b o c k to the point of use. It would be

280 necessary t o develop m a r k e t s f o r the gin trash pellets and assure t h e users o f a stable l o n g - t e r m supply. T o evaluate t h e c o m p e t i t i v e p o s i t i o n o f c o t t o n gin trash pellets as an energy source, a p p r o x i m a t e costs o f c u r r e n t fuels is useful. A natural gas price in the range o f $ 3 . 5 0 p e r million B t u is c u r r e n t l y reasonable. Diesel fuel at $ 1 . 0 0 per gal ( $ 0 . 2 6 4 p e r 1) is equivalent t o a b o u t $ 7 . 5 7 per million Btu; i.e., t h e r e are 7.57 gal {28.67 l) o f diesel per million Btu. C o t t o n gin trash pellets d o n o t p r e s e n t l y a p p e a r t o be c o m p e t i t i v e with natural gas, b u t as a s t a t i o n a r y engine fuel source t o replace diesel or fuel oil, t h e y o f f e r a possibly a t t r a c t i v e alternative. Thus, t h e r e is p o t e n t i a l f o r the use o f c o t t o n gin trash as an alternative energy source. L i m i t a t i o n s t o this alternative include d e v e l o p m e n t o f a m a r k e t f o r c o t t o n gin trash pellets, cost t o t r a n s p o r t t h e pellets f r o m p o i n t o f origins to users, and assured l o n g - t e r m supply o f c o t t o n gin trash pellets. B e f o r e i m p l e m e n t i n g any o f the e n e r g y g e n e r a t i o n systems a m o r e detailed s t u d y is essential. A careful analysis o f cash-flow, l a b o r r e q u i r e m e n t s , and m a i n t e n a n c e costs m u s t p r e c e d e an i n v e s t m e n t decision.

REFERENCES Beck, S.R. and Parker, H.W., 1979. Assessment on energy from biological processes, Task V, Part I: Engineering aspects of thermochemical conversion. Draft Report to Office of Technology Assessment, U.S. Congress, Dep. Chem. Eng. Tex. Tech. Univ., 100 pp. LaceweU, R.D., Condra, G.D., Hardin, D.C., Zavaleta, L. and Petty, J., 1978. The impacts of energy shortage and cost on irrigation for the High Plains and Trans Pecos Regions of Texas. Tex. Water Resour. Inst. TR-98, Tex. A&M Univ., 62 pp. Lacewell, R.D., Taylor, C.R. and Hiler, E.A., 1981. Energy generation from cotton gin trash: an economic analysis. Monograph Series, Cent. Energy Miner. Resour., Tex. A&M Univ., 12 pp. Lacewell, R.D., Hiler, E.A., Masud, S.M. and Kay, R.D., 1982. Assessment of integrated agricultural and energy production systems. Cent. Energy Miner. Resour. MS-4, Tex. A&M Univ., 39 pp. Levelton, B.H. and O'Connor, D.V., 1978. An Evaluation of Wood-Waste Energy Conversion Systems, Prepared by B.H. Levelton and Associates, Printed by Environmental Canada, Western Forest Products Lab., Vancouver, B.C., 187 pp. Moore, D.S., Lacewell, R.D. and Parnell, C., 1982. Economic implications of pelleting cotton gin trash as an alternative energy source. Tex. Agric. Exp. Stn. B-1382, 13 pp. OTA, 1980. Energy from Biological Processes, Vol. III--Appendices --Part B: Agriculture, Unconventional Crops, and Select Biomass Wastes. Prepared by Faculty and Staff of the School of Agriculture, Purdue University. Office of Technology Assessment, U.S. Congress, Washington, DC, 323 pp. Oursbourn, C.D., LePori, W.A., Lacewell, R.D., Lam, K.Y. and Schacht, O.B., 1978. Energy potential of Texas crops and agricultural residues. Tex. Agric. Exp. Stn. MP-1361, 82 pp.