Economics of small-scale biomass-to-X systems for advanced biofuel production - A case study from India

The abundance of lignocellulosic biomass like agricultural and forest residues presents an opportunity to reduce dependence on fossil fuels and create local employment. However, the adoption of biomass-to-X (BtX) systems over fossil-fuel based systems is challenging due to cost constraints. The economics of BtX systems are impacted by the distributed biomass resources and low bulk densities, necessitating dependence on distributed small-scale systems. This work, using an Indian case study, explores small-scale [1.5 tonnes per hour (tph)] fixed-bed downdraft gasification BtX systems to produce hydrogen [biomass-to-hydrogen (BtH)] and methanol [biomass-to-methanol (BtM)]. The Minimum Selling Price (MSP) is evaluated at a 12% discount rate for single output (BtH and BtM), and hybrid [biomass-to-hydrogen and methanol (BtHM)] systems. The significance of the syngas composition, system capacity, capacity utilisation factor, discount rates, operating costs, and the source of energy inputs on the system economics are highlighted in the work. The system heat and electricity inputs have been assumed to be either sourced externally or produced internally through an additional air gasification unit or produced internally by diverting a part of the syngas obtained in the main gasification unit. The MSP of hydrogen and methanol are in the range of INR 263-310/kg ($3.19-3.75) and INR 71-132/kg ($0.86-1.60), respectively, depending on the energy input source. BtH systems could achieve economic parity with conventional systems if about 80% of its depreciable investment is funded through grants, or if the feedstock costs drop below INR 2.44/ kg ($0.03/kg, or $1.73/GJ). BtM systems require multiple policy interventions to become economically viable. The cost of methanol could be reduced through BtHM hybrid systems by introducing hydrogen as an additional product. The growing global energy prices could make the BtX system a lucrative alternative soon.