Biomass, Biofuels, and Hydrogen Modules: SEDS Review Max Henrion & Surya Swamy May 7 and 8th 2009

Biomass, Biofuels and Hydrogen Sectors in Context of SEDS Macroeconomics Primary Energy Converted Energy End-Use Biomass Biofuels Buildings Coal Electricity Heavy Transportation Macroeconomics Natural Gas Hydrogen Industry Oil Liquid Fuels Light Vehicles

Biomass Sector Data Flow Incoming Data Outgoing Data Electricity Max Biomass Supply Electricity Biomass Biofuels Biomass Demand Biofuels Biomass Price Hydrogen Hydrogen

Biomass: Major Assumptions Biomass supply curves from runs of Polysys 2006 aggregated from region to national level Includes Agricultural residues, Forest residues, Energy crops, excludes Soy and Corn. SEDS uses total biomass (excluding soy and corn) for Energy crops increase from 0 in 2007 to by2030: 291 Mdt/y for Baseline and 609 Mdt/y for High scenario It also offers AEO Biomass supply curves as an optional alternative. Biomass consumed by Biofuels (cellulosic ethanol) Biomass to electricity, and Biomass to hydrogen.

Projected maximum biomass: AEO & SEDS Baseline and High SEDS PolySys High SEDS PolySys Base AEO 2006 max biomass supply is 270 Mdt/y (Million dry tons/year) (NEMS used 347 Mdt/y) SEDS projects increase by 2030 to 633 Mdt/y for Baseline or 944 Mdt/y for High scenario with increase in energy crops (NEMS projects 388 Mdt/y)

Biomass supply curves Price of biomass ($/biomass dry ton) as a function of demand level (million dry tons/year) Based on SEDS/Polysys High scenario

Biomass demand by sector For High oil price scenario – ramps to $245/bbl in 2030, no carbon cap or RPS

Biomass: Issues and planned work It is not currently clear whether EERE Biomass program will support further work. We hope they will support: Expert risk assessment of biomass supply curves, including uncertainties about: Land availability for energy crops Yield of new energy crop cultivars (R&D effects) Changes (reduction?) in costs for cultivation, harvesting, and transport of high-volume e-crops to production plants

Biofuels Sector Data Flow Incoming Data Outgoing Data Biomass Biomass Demand Biofuels Biomass Biomass Price Ethanol Price Liquid Fuels Liquid Fuels Ethanol Demand Max Ethanol Supply

Biofuels: Major assumptions Expert risk assessments of performance for biochemical Cellulosic ethanol production Uses projections from a pilot risk assessment conducted in Spring 2008 by Bob Wallace Combination of expert assessments on TPMs combined from four experts and 27 runs of ASPEN+ on model of production plant for yield and costs Goal years 2030, 2050 Base, Target, and Overtarget programs Zero Learning by doing For illustration we assume Target and Overtarget R&D Programs accelerate performance by 2 and 4 years respectively, relative to the Base Program Default assumes $0.50/gal subsidy for ethanol for corn and cellulosic.

Projected cost of cellulosic ethanol Gasoline Cellulosic ethanol 10, 50, 90%iles Corn ethanol Green lines are 10, 50, 90th percentiles of biochemical cellulosic ethanol costs, based on pilot risk analysis in 2008, Target R&D Program. Compared with corn ethanol and gasoline (high oil cost scenario), $0.50 ethanol subsidy, no carbon cap or carbon tax.

Effect of DOE R&D Programs on cellulosic ethanol costs Gasoline: High oil scenario Cellulosic ethanol Base, target, & overtarget R&D programs Corn ethanol Cellulosic ethanol costs for Base Program, Target DOE R&D program, and Overtarget R&D Program (accelerating results by 3 years and 6 years relative to Base industry-only R&D.

Cellulosic ethanol cost breakdown Cellulosic ethanol costs for Target DOE R&D program broken down to capital, O&M, and Fuel (biomass) costs – assuming modest biomass costs.

Fuel consumption of gasoline and ethanol Cellulosic ethanol Corn ethanol Gasoline Consumption of liquid fuels for vehicles. High oil scenario $240/bbl by 2030. No RPS or Carbon Target cellulosic ethanol program, medium cost.

Consumption by vehicle fuel type Hydrogen CNG/LPG E85 Gasoline Units G gge/y = billion gallons gasoline equivalent per year Assumes DOE Target program, high oil cost, $0.50 ethanol subsidy, no carbon tax.

Biofuels: Issues and planned work Add Renewable Fuel Standard (RFS) policies Extend biofuels module, using expert risk assessments of other technologies: Redo biochemical cellulosic ethanol with improved structure and assessment protocol Thermochemical methods with gasification/pyrolysis for cellulosic ethanol Expand modeling of corn ethanol cost and supply Add other transportation fuels from cellulosic biomass, such as methanol or butanol via Fischer-Tropsch process, and methane (biogas)

Hydrogen Sector Data Flow Outgoing Data Incoming Data Biomass Biomass Biomass Price Biomass Demand Natural Gas Nat. Gas Commercial Price Nat. Gas Commercial Dmd Natural Gas Nat. Gas Industrial Dmd Nat. Gas Industrial Price Hydrogen Electricity Electricity Nat. Gas Electric Dmd Nat. Gas Electric Price Light Vehicles Light Vehicles Hydrogen Price Hydrogen Demand

Hydrogen: Major assumptions 2008 expert risk assessments Central biomass to hydrogen Central natural gas reforming Distributed natural gas reforming (at fueling station) Base program (no DOE R&D) assumes no progress Target Program for Goal years: 2015, 2025 No overtarget program Zero learning by doing after 2025 Delivery costs Developed with Frances Wood, Onlocation, Inc. based on a reduced form of the H2 module from NEMS costs reducing over time, and as a function of market penetration

Levelized cost of delivered hydrogen by technology Costs for central station biomass and SMR (reforming natural gas) include hydrogen delivery costs.

Breakdown of levelized costs for Central biomass to H Distribution (delivery) costs dominate, but reduce over time

Hydrogen distribution costs Costs reduce over time from 2007 to 2017 Costs reduce as a function of market penetration (hydrogen as a percent of total liquid automotive fuel by GGE) Costs are estimated separately for urban and rural areas

Consumption by fuel type for light vehicles Hydrogen CNG/LPG E85 Gasoline Units G gge/y = billion gallons gasoline equivalent per year Assumes DOE Target program, high oil cost, $0.50 ethanol subsidy, no carbon cap.

Hydrogen: Issues and planned work Expert risk assessments in 2009 Redo central station biomass to hydrogen Add central wind turbine electrolysis Add distributed ethanol reformer Add learning by doing (LBD) post 2025 Expand model of delivery costs Working with Frances Wood Based on more detailed distribution cost models Disaggregate rural vs. urban more carefully based on quantities available Add simple uncertainty in delivery costs, based on interviews, but not formal expert elicitation