Costs of joint production of ethanol and industrial sugar juice using energy beets in the Northern Plains of the United States

Abstract

This study evaluates the economic feasibility and profi tability of producing industrial sugar juice and ethanol using energy beets in the Northern Plains of the United States. An enterprise budget is constructed to estimate the breakeven price of energy beets that triggers farmers to produce the crop. This breakeven price is used to estimate the long-run breakeven prices for industrial sugar juice and ethanol. Stochastic models are developed to account for price and parameter variability in the estimation of enterprise budgets and breakeven prices. Results show that the simulated breakeven price of producing ethanol is 518 $m -3 and that of industrial sugar juice is 351 $t -1 , using a 36 $t -1 breakeven delivered cost of energy beets. Energy beet ethanol investment could be profi table at the breakeven prices of energy beets and ethanol computed, and could attract new capital investment into the ethanol industry.

Investment, Irreversibility, and Uncertainty in Energy Beet–based Ethanol

“…Sugar from whole beets or extracted juice may be fermented into ethanol. Like corn starch ethanol, the process by which ethanol is produced from energy beets provides coproducts, such as pulp that may be sold as livestock feed and stillage powder for thermal heat generation (Asadi, 2007;Maung and Gustafson, 2011;Shapouri, Salassi, and Fairbanks, 2006;Wamisho, Ripplinger, and De Laporte, 2015). The mass balance of processing 1 ton of beets produces 26.5 gallons of ethanol and 0.05 tons of beet pulp and 0.0225 MMBTU/gal.…”

“…To produce each gallon of ethanol, the refinery requires 0.0373 MBTU of thermal energy and 0.6 kWh of electricity. Thus, the refinery obtains 70% of its thermal energy requirement from using all of the stillage powder produced at the plant (Maung and Gustafson, 2011; Wamisho, Ripplinger, and De Laporte, 2015). Finally, at the 20 mgy nameplate capacity, the annual feedstock demand is equated with the energy beet to ethanol conversion factor.…”

“…However, efforts are underway to develop energy beet ethanol refineries in North Dakota and California. The energy beet, a member of the beet family ( Beta vulgaris ), is a hybrid sugar beet that has been genetically engineered in various parts of the United States to yield sugar for ethanol production (McGrath and Townsend, 2015; Wamisho, Ripplinger, and De Laporte, 2015). Although energy beets are specific to the United States, sugar beets are used in Europe for ethanol and sugar production.…”

“…Studies have evaluated the economic feasibility of ethanol investments in sugar-based feedstocks such as sweet sorghum, sugarcane, and sugar beets in the United States (Coyle, 2010; Linton et al, 2011; Maung and Gustafson, 2011; Outlaw et al, 2007; Rahmani and Hodges, 2006; Shapouri, Salassi, and Fairbanks, 2006; Wamisho, Ripplinger, and De Laporte, 2015). However, all of these studies have used discounted cash flow techniques such as net present value (NPV) or break-even value analysis, methods that do not adequately account for managerial flexibility and the risk and uncertainty of future cash flows.…”

The Value of Switching Production Options in a Flexible Biorefinery

“… 1 The energy beet, a member of the beet family ( Beta vulgaris ), is a hybrid sugar beet that has been genetically engineered in various parts of U.S. to yield industrial grade sugar biomass that will ultimately be used to produce ethanol (Maung and Gustafson 2011, Hossiso and Ripplinger 2016, Hossiso, De Laporte, and Ripplinger 2017, McGrath and Townsend 2015, Wamisho et al 2015). …”