Assessment of coal and biomass to liquid fuels in central Appalachia, USA

Abstract

Liquid fuels from coal and biomass have the potential to reduce petroleum fuel consumption and CO2 emissions. A multi-equation model was developed to assess the economics of a potential coal/biomass-to-liquids (CBTL) fuel plant in the central Appalachian hardwood region, USA. The model minimizes the total annual production cost subject to a series of regional supply, demand, and other constraints. Model inputs include coal and biomass availability, biomass handling system, plant investment, production capacity, transportation logistics, and project financing. The outputs include the required selling price (RSP) and the optimal logistical decision-making associated with feedstock requirement, collection, delivery, and liquid fuel production. Results showed that the RSP of Fischer–Tropsch (FT) diesel for a 40 000 barrel-per-day CBTL plant with coal/biomass ratio (by weight) of 85/15 was $86.45–87.25 bbl−1 using different biomass handling systems. The RSP would vary between $86.45 and $89.81 per barrel according to different coal/biomass mix ratios. In consideration of the carbon offset credits due to the addition of biomass, the RSP was adjusted to $84.19–86.74 with respect to four levels of carbon prices. Sensitivity analyses indicated that the RSP of FT diesel was mostly affected by plant capacity, capital cost, coal price, and liquid fuel yield. The crude-oil-equivalent price of FT fuels must be above $66 bbl−1 for a CBTL plant to be profitable in central Appalachia for the long run. These results can help investors/decision-makers evaluate future CBTL developments in the region. Copyright © 2011 John Wiley & Sons, Ltd.