387811 A Framework for Defining the Economic Feasibility of Cellulosic Biofuel Pathways

Tuesday, November 18, 2014: 3:37 PM
International C (Marriott Marquis Atlanta)
Tristan Brown, Department of Forestry and Natural Resources Management, State University of New York - College of Environmental Science & Forestry, Syracuse, NY and Mark Mba Wright, Mechanical Engineering, Iowa State University, Ames, IA

This paper incorporates pathway-specific financial assumptions into techno-economic analyses of cellulosic biofuel pathways under price uncertainty. Five cellulosic biofuel pathway scenarios are developed in a discounted cash flow rate of return spreadsheet to determine pathway-specific costs of debt. Cost of equity for the scenarios is calculated based on the financial characteristics of the U.S. biorenewable industrial sector. A 20-year net present value (NPV) and probability of default for each scenario are stochastically calculated. Mean NPVs vary from a low of -$774 million to a high of -$135 million. Probabilities of default range from a high of 100% to a low of 80.5%. A sensitivity analysis finds that the use of pathway-neutral financial assumptions overestimates NPV and underestimates probability of default.

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