Biorefinery Location and Technology Selection Through Supply Chain Optimization

This paper proposes a mixed integer linear program for determining economical biomass processing facility locations and capacities, and applies it to assess the biofiiel supply chain of the Midwestern United States and the feasibility of meeting governmental biofuel mandates in 2015. Existing corn ethanol facilities and new candidate facility sites are considered for biofuel production by utilizing eight types of biomass. The spatial distribution and farmgate cost of biomass is accessed from a recently updated U.S. Department of Energy database. Seven biomass processing technologies that are expected to be commercialized in the near-term are available for construction at each candidate facility site. A detailed cash flow analysis that includes capital depreciation and taxation is embedded into the model formulation to give insights into the minimum biofuel selling price for each facility site. Equilibrium market cost for the Renewable Fuel Standard biofuel classifications (renewable fuel, advanced biofuel, and cellulosic biofuel), which is directly related to the Renewable Identification Number market price, is determined through sensitivity analysis of the delivered biofuel price.