THE ECONOMICS OF SMALL SCALE BIODIESEL PRODUCTION - I
Conventional energy generation is usually location sensitive. As a result of this we have centralized facilities, and complex distribution grids.
Alternative energies, on the other hand, offer the possibility of de-centralized generation. photovoltaic, and micro hydroelectric, are good examples of this.
And so is biodiesel.
Although biodiesel production has so far emulated fossil fuels, making use of large central facilities, the soundness of this strategy is now being challenged.
Contrary to fossil fuels, biodiesel can be locally made from a variety of feedstocks, rather than from a single feedstock originating in distant oil fields.
Also contrary to fossil fuels, biodiesel production can be low tech, and is not capital intensive.
Biodiesel production does not require economy of scale.There is no minimum size for a biodiesel facility. And small-decentralized biodiesel facilities do not require dedicated technical staff support; they can be operated by locally trained non-technical staff.
Small biodiesel plants are more energy and capital efficient than their bigger centralized counterparts. A 180 ton/yr. facility will use 60 watts per liter of biodiesel produced, whereas a 20'000 ton/yr. European built plant will require 100 watts per liter.
The rising demand for biodiesel has so far been met by large centralized plants, 10'000 tons/yr., or more, but as biodiesel has become better known, small-decentralized units have proliferated.
For eight years I have been in the business of designing and manufacturing small to mid-sized commercialbiodieselplants. Sizes range from 45 to 4’500 tons/yr., whilst prices range from Euros 3'000.00 to 160'000.00. The smaller units are batch units;the larger ones are continuous. All plants use a proprietary high temperature, pressurized protocol, and generate zero effluents.
I hold that within the next twentyyears the agregate production ofsmall decentralizedbiodiesel plants will be equal to or greater than the aggregate production of the larger centralized units. The number of small-decentralized plants will grow not only because of cost and environmental considerations, but also because such units can be manufactured locally without a high-tech input, and canmake use of a variety oflocally available feedstocks.
Small scale biodiesel production generates a win/win situation, in which low tech inputs are transformed into a superior, environmentally friendly fuel, without the need for large capital expenditure, or expensive technology transfers.
As a bonus, de-centralization of fuel supply will reduce distribution costs, stop gross local product transfer,and what is more, empower people, making them energy self-sufficient.
The know-howand the hardware are available. All that's needed now is a bit of word spreading.
© Ricardo G. Carlstein - August 2006.
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THE ECONOMICS OF SMALL SCALE BIODIESEL PRODUCTION - II
Biodiesel is quite simple to make. Generically, a lipid is mixed with a catalyser and an alcohol, and the resulting compoundis what is known as biodiesel. This transformation also generates aby-product, glycerol,that has many applications.
The term 'lipid' encompasses all greases and oils of both animal and vegetable origin, either virgin or used.Biodiesel can be made (to name a few feed stocks) from lard, fish-oil, virgin vegetable oil, or waste vegetable oil no longer acceptable for cooking.
For this brief overview reference will only be made to virgin vegetable oil (vo), either crude or refined, and waste vegetable oil, also known as yellow grease (wvo).
The alcohol of choice for making biodiesel is methanol. And the catalyst of choice is sodium hydroxide - also known as lye. Both these inputs are readily available worldwide.
Equipment for making biodiesel can be as rudimentary as a used 20 liter bucket and a hand held drill, or can involve sophisticated reactors. The complexity ofbiodiesel equipment has more to do with production volume required, ease of process, repeatability, reliability, than with quality considerations.
Largevolume production techniques used for making biodiesel can be scaled down without a loss in process quality; with the advantage that unit costs are usually lower with the smaller facilities than with the larger ones.
Large scale production usually requires wasteful intermediate steps, expensive technicalsupervision, and generates effluents that have to be disposed off at additional cost. Small scale production can side-step these requirements, and usually does not generate effluents.
One kilo of vo or wvo translate into one kilo of biodiesel. This makes cost calculations simple.
Also, one kilo of alcohol translates into one kilo of glycerol,again simplifying cost calculations.
If the glycerol is correctly marketed, the cost of biodiesel will be essentially that of the vo/wvoused; it is often the case that the sale of the glycerol covers not only the cost of the alcohol and the catalyst, but the energy input, and labor, as well.
Glycerol is an extraordinary de-greaser, and the world's first liquid glycerin soap; it's also being used to combat ticks in cattle, fleas in small animals, and lice and dandruff in human beings . It isa superior soluble oil for machining all metals.It's present application as an industrialprecursor for glycerin is wasteful in extreme; it should instead be used as a precursor and locally transformed into value added products that enhance the biodiesel equation, and generate jobs.
The latest glycerol development involves using it as a precursor for polyesters. Both Dupont and the U. ofCatalonia have ongoing projects at pilot plant level.
Biodieselobtained through either small scale or large scale production is a remarkable fuel that doubles engine life, significantly reduces harmful emissions, does not generate cancerigenic compounds like its fossildiesel counterpart, and is neutral in carbon dioxide generation. Under certain conditions it can generate carbon credits.
Biodiesel quality standards vary widely. Most of them arebased on political considerations, and the interests of lobbies,rather than on technical requirements.
As an example,biodiesel meeting US ASTMstandards would be un-acceptable in the European Community, as it is sub-standard as regardsEN standards.
Still, what really matters is that all existing or proposed biodiesel standards can be met either through small scale or large scale production.Scale does not affect biodiesel quality.
The above comments can easily be translated into a direct cost equation for biodiesel.
Indirect costs are another matter, as size and complexity play a predominant role in determining biodiesel's final cost.
As mentioned in the first of these articles, our small to medium sized BIO plants range from Euros 3.000.00 to160'000.00 for installed capacity of between 45 and 4'500 tons/yr.
This translates into an opportunity cost of between Euros 66.00 and 36,00 a ton/yr.
Compared to these values, an Energea 20'000 ton/yr plant with a list price of Euros 4'850'000.00 has an opportunity cost of Euros 243.00 a ton/yr.
As can be seen, size trade-off favors the smaller units, as they aremore capital effective. And when the logistics of operating a large plant and disposing of effluentsare factored in,the smaller de-centralizedplants are even more capital efficient than the centralized units.
Over the years we have been toldthat only through economy of scale can cheaper goods be obtained. This has led to our present highly concentrated scenario, in which a minute number of players determine the economics of our lives, and locally accrued value is systematically transferred out of the originating economy, to unknown destinations.
Alternate energies in general, and biodiesel in particular, offer an option to this scenario. The required inputs and know-how are there; it is now simply a matter of putting them to good use.
© Ricardo G. Carlstein- Buenos Aires, August 2006
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