Approaches to Biodiesel Plant Development
From Biofuels Business, June 2008 Issue
by Pete Moss
There are three general approaches to developing a first-generation biodiesel project. Each construction approach has advantages and disadvantages that should be assessed before proceeding with any biodiesel project.
The first approach involves building a plant at a greenfield site utilizing a proven technology from recognized technology providers. This is commonly referred to in the industry as a "stick built" plant. It typically involves a turnkey approach with a technology firm and an engineering, procurement and construction firm (EPC). They design and construct the plant at a chosen site that has very little or no existing infrastructure.
Occasionally there is existing rail, road, and/or utility infrastructure, but the balance of the project would need to be engineered "from the ground up." These plants generally range from 20-million-gallons-per-year (mmgpy/75 million liters) to 60-mmgpy (227 million liters) or higher, and process guarantees are offered by the EPC firm (for an additional fee). All new equipment is utilized and the construction timeline typically is between 18 and 24 months once the detailed engineering is initiated. Construction costs utilizing this type of approach are between $1.50 and $2 per installed gallon of capacity.
The second strategy for building a plant is the "modular" approach. This utilizes production modules, or units, mounted on skids that are constructed at one location, tested and delivered to the client's location, which could be a greenfield site or one with existing infrastructure.
A few companies specialize in this type of modular technology approach. These plants are typically smaller and are usually available in 5- and 1--million-gallon modules (19 to 37 million liters), which can be incrementally added to increase capacity up to 30-mmgpy (113 million liters), at which point operational efficiencies begin to decline.
Because these plants are constructed repeatedly at the same location, the design is basically the same each time and the labor cost can be controlled, the overall cost of construction can be lower than a "stick built" plant.
One aspect of this approach is that the "outside battery limits" of the plant, such as piping, storage and utilities, is often overlooked. However, these plants are typically constructed in a six- to 10-month timeframe and the cost is approximately $1.25 to $1.75 per installed gallon of capacity. Although the modules are usually tested prior to shipment, the process guarantees are not as detailed as those offered by the larger technology providers and EPC firms.
The third approach to building a biodiesel plant is to "retrofit" an existing petrochemical, oleochemical or other site with existing infrastructure. This approach utilizes a design firm with experience in engineering biodiesel facilities and a construction firm to take advantage of existing infrastructure such as utilities, buildings, storage and equipment.
These plants are typically much larger in scale, 20-mmgpy to 200-mmgpy (75 million liters to 757 million liters), and can be constructed with new equipment inside the battery limits, or a combination of new and used equipment.
These plants can usually be constructed in a six- to eight-month time frame, and the cost is approximately 75¢ to $1.25 per installed gallon of capacity.
Process guarantees are generally not available for this mode of construction as more of the risk is absorbed by the project developer and lender. However, overall risk is minimized due to the substantially reduced capital cost. The lower capital cost and larger capacity allows the plant to be competitive when plants built with the other approaches are not.
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Due Diligence
It is important to note that each approach requires a high degree of due diligence and a thorough understanding of the entire biodiesel process. Making biodiesel is easy. Making biodiesel that meets increasingly stringent ASTM specifications is extremely difficult.
This is one reason that poor quality biodiesel has made its way into the marketplace. The market has repeatedly demonstrated that higher quality feedstock almost always leads to higher quality product. Larger-scale biodiesel plants that employ multiple feedstock strategies are much more complicated than smaller batch-type plants due to the speed at which the feedstock and product moves through the plant. Impurities in feedstock MUST be removed to meet ASTM specifications.
As an engineering services firm, Biodiesel Services Group (BSG) works with all three approaches on behalf of the plant owner to ensure the process is flexible, efficient and complete. BSG assists with all phases of development including planning, design, engineering, construction oversight, training, startup, commissioning and plant operations.
Pete Moss is owner of Biodiesel Services Group, LLC, a subsidiary of Frazier, Barnes & Associates, LLC. He can be reached at 1.901.725.7258 or fbapete@frazierbarnes.com.
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