Utility-Integrated Biorefineries and Capacity Planning

This report describes how capacity planning models can be used to plan investments in biorefineries. For this, we have considered several processes belonging to a chemical supply chain that can be fed by a raw material, such as switchgrass, and used to produce valuable commodities. To build our model we have considered 58 possible processes to choose from, part of which are 12 chemicals chosen by the U.S. Department of Energy for production of value-added chemicals from biomass. The model maximizes net present value, considers budgeting conditions to self-finance expansions and determines what process ought to be constructed in the biorefinery, initial process capacity, as well as construction time and the timing and size of future expansions. Projected raw material availability, market projected demand and prices, as well as transportation costs are included. Among other results, the model is also able to provide the location of the refinery based on market demand and proximity to feed. All these features notwithstanding, integration of centralized utilities was analyzed to determine the optimal value added chain of processes, a feature that has not been considered in any previous models.