Current Status of Renewable Energy

Mike MontrossBiosystems and Agricultural Engineering Department

University of Kentucky

2/21

Outline

• Current Sources of Energy• Liquid Fuel Replacement

– Ethanol• Electricity Replacement

– Co-firing– Solar– Wind

• Biomass Feedstocks

3/21

Sources and End Uses of Energy (Quadrillion Btu)

US Energy Information Administration

4/21

What Will Change Status of Renewable Energy?

• Regulations/mandates– Renewable Fuels Standard– Renewable Portfolio Standard– Carbon/Greenhouse Gases– Changes in environmental regulations on

mining/oil/gas extraction• Cost of alternative fuels ($/ton,

$/mmbtu, $/kWh or $/gal)

5/21

Other Issues Driving Renewable Energy

• Environmental quality• National security• Underutilized agricultural production• Rural development• Balance of trade• Increased tax revenue for states/cities

6/21

Outline

• Sources of Energy• Liquid Fuel Replacement

– Ethanol• Electricity Replacement

– Co-firing– Solar– Wind

• Biomass Feedstocks

7/21

Potential Legislation

• Renewable Fuels Standard–Renewable Biofuels (Starch – corn, wheat,

milo, and barley)• 15 billion gallons by 2015• Production capacity from corn at almost 12 billion gallons today, with

probable expansion to 15 billion gallons

–Advanced Biofuels• 21 billion gallons by 2022 (16 billion cellulosic, 5 billion undifferentiated

including biodiesel)• Less than 1 billion gallons developed or under development• DOE has provided over 900 million dollars (soon to be announced)

8/21

Ethanol Feedstocks

• Starch (corn, wheat, barley, milo)• Sugar (sweet sorghum, sugarcane, sugar beets)• Cellulose (plant material)

9/21

Wholesale Costs of Liquid Fuels

Fuel Cost ($/gal) Commodity Price Feedstock Cost ($/gal)

Gasoline 3.50 (July 08) $145/barrel 3.45

2.00 (Nov 09) $76/barrel 1.80

Ethanol 2.90 (July 08) $7.00/bu 2.50

2.05 (Nov 09) $3.75/bu 1.35

Ethanol On Equal Energy Basis

3.90 (July 08) 3.30

2.70 (Nov 09) 1.80

No taxes, credits, etc. consideredPricing data from EIA and US Agricultural Marketing Service

10/21

Estimated Costs of Ethanol

Corn Based Cellulosic Today?--

Illustrative

Cellulosic 2010-12— DOE

target

Feedstock $1.17@$3.22/bu2.75g/bu

$1.00@$60/dt60g/dt

$0.33@$30/dt90g/dt

By-Product -$0.38 -$0.10 -$0.09

Enzymes $0.04 $0.40 $0.10

Other Costs** $0.62 $0.80 $0.22

Capital Cost $0.20 $0.55 $0.54

Total $1.65 $2.65 $1.10

Keith Collins, USDA Chief Economist, 2007** (includes preprocessing, fermentation, labor)

11/21

Outline

• Sources of Energy• Liquid Fuel Replacement

– Ethanol• Electricity Replacement

– Co-firing– Solar– Wind

• Biomass Feedstocks

12/21

Potential Regulations

• Renewable Portfolio Standard–30 states mandate some type of RPS

• Ranges up to 25%

–5 states have voluntary goals including Kentucky at 1000 MW

–Federal legislation introduced and under debate could establish an RPS of 25% by 2025

13/21

Costs of Alternative Sources of Power

Source Annual Capital Cost (¢/kWh)

O&M (¢/kWh)

Electricity Cost (¢/kWh)

Scrubbed Coal 1.7 3.2 4.9

Coal with Sequestration

2.9 5.1 8.0

Biomass 3.1 7.1 10.2

Solar PV 12.0 1.2 13.2

Wind 3.8 3.0 6.9

EIA - Cost and Performance Characteristics of New Central Station Electricity Generating TechnologiesSolar and wind based on 50% load factor

14/21

Wind Potential

15/21

Payback of Solar Systems

16/21

Energy Cost ($/mmbtu) of Biomass and Fossil Fuels

Source November 2009 December 2008

Natural gas 3.71 6.79

Coal 2.17 5.20

Biomass 3.10-3.75 5.00-6.25

Prices from Kentucky Energy Watch (coal and natural gas)Southern Illinois USDA Agricultural Marketing Report on Utility Grass Hay

17/21

Outline

• Sources of Energy• Liquid Fuel Replacement

– Ethanol• Electricity Replacement

– Co-firing– Solar– Wind

• Biomass Feedstocks

18/21

Biomass Feedstocks for Energy Production

• Unused residues from traditional timber harvest– Thinning

• Short rotation woody crops• Urban residues• Herbaceous energy crops• Agricultural residues

• What feedstock is cheapest to produce and deliver to an end-user

19/21

Biomass Required to Meet Federal Legislation

RPS 15% 13.0 million tons 20% 18.2 million tons 25% 22.0 million tonsRFS 10.0 million tonsTotal Biomass 23 to 32 million tons

20/21

Kentucky Land Resources (ac)

Pastureland Other Farmland

Private Forestland

Total Land

West 750,000 2,400,000 1,400,000 4,600,000

Central 1,600,000 2,700,000 2,100,000 6,300,000

East 250,000 910,000 4,070,000 5,200,000

Total 2,600,000 5,900,000 7,600,000 16,200,000

Ignore cropland – if you can raise row crops you will continue

With advances in bioenergy crop yields and proper incentives – Kentucky could be a major player

21/21

Closing Remarks

• Renewable energy will play a future role– Energy independence, balance of trade, rural

development– Cap and trade legislation– Mining/gas/oil extraction changes

• Cost still an issue• Co-firing probably more likely than cellulosic

ethanol• Kentucky has a large land base that could be

developed for renewable energy production

22/21

Anaerobic Digestion

• Large systems in Europe (primarily Germany)• Numerous farm installations• Wet feedstocks