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MODEL BIOREFINERYThe Biorefinery of the Present
Rio de Janeiro, November, 2010
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The Biorefinery of the Present
Agenda
Introduction
Definition
Sucrose Production Platform
GMO Units
Preliminary Economics
Conclusions
Recommendations
Final word
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Presently, Sucrose is the only viable raw material for Biorefineries,because there are no commercially available technologies to convertLignocellulosics into the desired products or, even, to their precursors.
Besides, the recovery and transportation costs of residualLignocellulosics (leftovers of agricultural operations) are extremely high(due to their low surface density) and this would make themeconomically non-attractive, even if the required technologies existed.
Finally, urban and rural wastes do not constitute a source of rawmaterial because the first has already a “processing path” and thesecond is spread over a very large surface.
The Lignocellulosics associated with the Sucrose production, as in thecase of the Sugar Cane, would be adequately used to generate surplusElectricity to be sold to the “grid” and, thus, to reduce the Sucroseproduction cost.
The Biorefinery of the Present
Introduction
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We can, then, define the “Biorefinery of the Present” as the IndustrialUnit able to convert Integral Sugar Cane into the desired product andsurplus Electricity to the “grid”.
An hypothetical Integrated Complex, for the production of a desiredSucrochemical, like Green Naphta for example, would include theagricultural operations, and could be seen as being divided into twomain sections:
(a) The Sucrose Production Platform, including:
The Sugar Cane Crop
The Sugar Cane Reception & Preparation and Sucrose Extraction
The Power House (Steam and Electricity Production)
Offsite operations
(b) The GMO Unit, including:
The GMO Fermentation (to the desired product or to its precursor)
The Finishing Unit
The Biorefinery of the Present
Definition
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The Sucrose Production Platform shall be conceived, designed andconstructed under the most advanced agricultural and industrialtechniques, aimed to minimize the Sucrose “net” production cost. Theseadvanced techniques would include:
Optimized Sugar Cane Varieties
Complete characterization of the production environment
Total crop mechanization and optimized logistics
Integral Sugar Cane production
Optimal irrigation regime
Maximum energy generation (steam and energy)
Maximum EE surplus sales to the local grid
With all these provisions taken altogether, at their respective maximumextent, we expect Sucrose “net” production cost in the US$ 25/tonne toUS$ 30/tonne range, competitive with Oil cost of US$ 115/tonne, on anenergy content basis.
The Biorefinery of the Present
Sucrose Production Platform
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The GMO Units, whose technology is the key factor allowing the conceptionand design of Biorefineries, in general would include:
The production of the precursor of the Green Naphta
The conversion of the precursor to the Green Naphta
The anaerobic fermentation (bio-digestion) of the stillage to produceBiogas
There have already been short communications from the GMO communityreporting the pursuing of the direct production of Alkanes from Sucrose, inone step, in the GMO fermentation. This would surely reduce the total capexand the total opex required to construct and operate the GMO Unit.
By now, even considering the two-steps GMO conversion of Sucrose to GreenNaphta, when starting with the Sucrose “net” production cost as shownbefore, we can estimate the Green Naphta production cost as beingsomething around US$ 250/tonne, to be compared to the PetrochemicalNaphta cost (with Oil @ cost of US$ 15/bbl, not @ its price of US$ 80/bbl) ofsome US$ 180/tonne.
The Biorefinery of the Present
GMO Units
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Assuming, for the hypothetical Integrated Complex, a nominal capacity of400.000 tonnes of Green Naphta/year, we would characterize the IntegrateComplex by the following parameters:
Required Sucrose production: 1.34 million tonnes/year
Required Crop Land: 107 thousands hectares
“E” Type Integral Sugar Cane production: 19.6 million tonnes/year
Agricultural Investment (Crop & CCT): US$ 450 MM
1st. Generation Power House (670 MW): US$ 321MM
Reception & Preparation and Sucrose Extraction: US$ 171 MM
GMO Unit: US$ 279 MM
Total Investment: US$ 1.221 MM
The total investment, here estimated, already includes the offsites of theBiorefinery, distributed pro-rata amongst the Biorefinery ISBL investments.
The Biorefinery of the Present
Preliminary Economics
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Assuming the following price assumptions, for the evaluation of theIntegrated Complex:
Oil price: US$ 80/bbl
Petrochemical Naphta Price: US$ 764/tonne
Green Naphta Price (without Carbon Credits): US$ 955/tonne
Bio-Electricity Price (@ the plant gate): US$ 70/MWh
Income Taxes: 34% over gross profit
Weight averaged capital cost: 9.0%aa
Evaluation period (with perpetuity): 10 years of operation
We get the following economic performance indicators:
Average cash generation: US$ 314 MM/year
Internal Return Rate: 24.2%aa
NPV of wacc – discounted cash flow US$ 1.6 billion
The Biorefinery of the Present
Preliminary Economics
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We hope that we have achieved our goal of showing that, presently, it isalready feasible to conceive, design and construct a “Model Biorefinery”(the one able to convert Sucrose into Green Naphta), which wheninserted into an Integrated Complex, would produce the Green Naphtacompetitively vis-à-vis the Petrochemical Naphta (with Oil @ a US$15/bbl cost) and, at the same, with the Integrated Complex projectpresenting fair intrinsic attractiveness.
The fact that we have estimated the economic performance indicators,for the Integrated Complex, does not preclude the fact that the sameeconomic performance indicators would be achieved by each of anumber of companies that would partner to materialize the IntegratedComplex, provided that all partner companies adhere to the“engagement rules”, which would grant the establishment of the “virtualintegration”, amongst them.
The Biorefinery of the Present
Conclusions
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Given what was here exposed, we feel authorized to recommend thedeepening of the evaluation here carried out, based on a real project,aimed to, eventually, design and construct a “Model Biorefinery”, for theconversion of Sucrose to Green Naphta, with a nominal capacity of400.000 tonnes/year, taking into account that there would be a hugemarket demand for such a raw material.
This is so, because the Green Naphta, besides being sustainable (latosensu), can be advantageously used in the existing PetrochemicalNaphta conversion units, the Naphta Steamcrackers, around the world,mainly in Japan that, let aside the fact that it imports almost all Naphtait consumes (around 20.0 million tonnes/year), is showing a growinginterest in the Green Products, a fact that can be verified through theirdemonstrated willingness of paying price premiums, for the GreenProducts.
Finally, Brazil is the most privilegiated region of the world, in whatconcerns the construction and operation of Biorefineries, based on SugarCane as raw material.
The Biorefinery of the Present
Recommendations
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Thank you very much!!!
The Biorefinery of the Present
Final Word
