AbstractThis paper provides a business case for a large‐scale wheat‐straw‐based cellulosic ethanol plant in the Canadian Prairies. Feedstock availability and costs were quantified for 11 locations representing the region’s agroecological soil zones. The economic feasibility of the cellulosic ethanol plant was evaluated using SuperPro Designer® based on simultaneous saccharification and cofermentation process. Total capital investment is approximately $90–$200 million for corresponding plant with capacities of 69–208 million liters annum‐1. The lowest operating costs are associated with high volume biomass locations such as Yorkton, Lanigan, and Weyburn. A range of discount rates (7–15%), ethanol selling price ($1.00–$1.70 L‐1), and feedstock cost ($35–70 tonne‐1) was used to assess the sensitivity of plant profitability (NPV) to changes in these parameters. Average total cost of ethanol production decreased with increasing plant size, from $0.90 L‐1 in a small ethanol plant to $0.66 L‐1 for plant capacity higher than 125 million L. The sensitivity analysis showed better economies of scale for larger plants, with marginal costs and average cost curves suggesting that Canadian Prairies could support a cellulosic ethanol plant capacity of 250 million L annum‐1 at a single location. Yorkton, Melfort, Weyburn, Prince Albert, and Lanigan generate positive NPV over a wider range of annual plant capacities (138–208 million L). Swift Current, Rosetown, and Kindersley have the lowest NPV, associated with their low straw density and correspondingly higher transportation costs. © 2017 Her Majesty the Queen in Right of Canada Biofuels, Bioproducts and Biorefining © 2017 Society of Chemical Industry and John Wiley & Sons, Ltd