IHS Chemical Week


Second-Generation Ethanol in Sight

11:19 AM MST | January 22, 2009 | By REBECCA COONS

Ethanol production capacity has exploded in the U.S. in recent years, driven largely by its use as a renewable fuel source. However, high corn prices may cause enthusiasm to wane for first-generation ethanol projects. At the same time, government incentives and improving technology are bringing the industry closer to constructing a commercial-scale second-generation ethanol plant. Corn stover and straw are considered to be the best candidates to become large-scale feedstock sources for these projects, says SRI Consulting (SRIC; Menlo Park).

According to a recent SRIC Process Economics Program report, the ethanol fermentation facilities currently under construction in the U.S. will "in all likelihood" be the last to be buillt in the U.S. utilizing corn feedstock.

The report analyzes the process designs and associated costs for the production of cellulosic ethanol via dilute acid prehydroylsis, concentrated acid hydrolysis, and ammonia pretreatment. The capital costs associated with building a manufacturing facility based on these processes are significantly higher than that needed for a corn dry milling plant, due in part to the additional costs incurred by more expensive construction materials and enzyme production equipment. However, recent legislation in the U.S. and large-scale initiatives, including the development of feedstock infrastructure and processing technologies that lower fixed capital requirements, could change the competitive situation in the longer term, SRIC says.

Government initiatives are set to expand even further. Congress may include renewable energy incentives in the economic stimulus under consideration, a decision that could speed up rescue funds for solar, wind, biofuels, and clean coal technologies, according to the Washington Post. The stimulus bill could allocate up to $25 billion in renewable funds, it says. And government support of biofuels in the U.S. is likely to expand under the Obama Administration, analysts say. Steven Chu, Obama’s choice for energy secretary, is a strong advocate for alternative fuels including ethanol, solar, and wind power, they say.

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