|In your presentation, you will discuss the development and operating segments for a biomass supply chain, with some focus on timelines, costs, and risk. Briefly, what is the importance of each?|
A one month delay in startup and operation of high value biomass processor such as a 10 million gallon (38 million liters) biofuel project equates over $3,000,000 in lost revenue each month. Essentially, for each 500-dry-ton-per-day of biomass demand, every day operations has potential to create $100,000 of revenue. If a biomass supply chain is not developed managed appropriately, that can be a significant financial impact on a project and those impacts increase as capacity rises. If a developer fails to sync their feedstock supply chain with its process technology, that project can be severely impacted by not operating.
A well-defined biomass supply chain strategy will guide your development and operations while enhancing relationships with partners, suppliers and end-users. Developers that have failed to define their strategy upfront with a clear appreciation of these relationships have significant risk in alienating external partners including farmers, landowners, capital providers such as banks, equipment suppliers, labor, government, end-users and the surrounding community. This can lead to project delays, increased costs to procure the appropriate feedstocks and marginalize the potential operations of a biomass processor. Thus, successful development and operation of the biomass supply chain is critical to managing risk and maximizing a project’s potential return.
During your talk, you’ll discuss some of the key factors to development and operation for cellulosic biomass supply chains. Give us a preview of one factor that you’ll discuss, and why it calls for consideration.
The core premise is to create a biomass strategy early on in the project’s development that encompasses the technology and conversion capabilities in concert with the feedstock supply chain to create a financeable and profitable project from field to fuel. From that point forward, you continuously innovate to improve the supply chain and further integrate that interaction between feedstock, technology and finances.
This process starts with identifying the needs and capabilities of the supply chain. The goal is to identify and quantify risks across the project early on in its development and deploy a regimented process to mitigate those risks in order to meet and exceed operational goals. By establishing these performance targets, a project can then work towards developing a cohesive strategy whereby the operations of the biomass supply chain are configured to optimize the returns for the project.
What kinds of feedstocks and projects will your presentation apply to?
There is a range of biomass feedstocks in development in the U.S. and globally, ranging from herbaceous crops like switchgrass, energy sorghum, and miscanthus, as well as crop residues such as corn stover and woody biomass. While each of those feedstocks has its own unique attributes, the standard principles for biomass supply chain development and operation has been applied across each of these feedstocks. This structure even applies to developing and improving the supply chains for traditional first generation feedstocks such as corn grain, sugar cane, wheat and sorghum.