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Scaling and Learning Effects of Biofuels Conversion Technologies
Author(s) -
Festel Gunter,
Würmseher Martin,
Rammer Christian
Publication year - 2014
Publication title -
energy technology
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.91
H-Index - 44
eISSN - 2194-4296
pISSN - 2194-4288
DOI - 10.1002/ente.201400014
Subject(s) - biofuel , fossil fuel , biomass (ecology) , production (economics) , economics , environmental science , natural resource economics , agricultural economics , waste management , engineering , microeconomics , ecology , biology
The convergence in production costs between biofuels and fossil fuels may be driven by an increase of the market price for crude oil on the one hand and by a decrease of the production costs for alternative fuels on the other. Whereas the price for fossil fuels mainly depends on the price of crude oil, the conversion costs often have a decisive impact on fuels produced from biomass. This study shows that the total conversion costs can be primarily reduced by scaling effects. Therefore, for all discussed types of biofuels, the total conversion costs can be reduced by a factor of ten, solely through scale economies associated with upscaling of the production plant size from 10 kt to 500 kt. In contrast, between 2005 and 2020, the expected reduction of the conversion costs attributable to learning effects is approximately one half, resulting from the learning curve factors during this time period. Although 2nd generation biofuels have been closely linked to higher conversion costs in comparison to 1st generation biofuels, this gap is expected to almost vanish over the next decade.