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Ethanol distribution, dispensing, and use: analysis of a portion of the biomass-to-biofuels supply chain using system dynamics.

Vimmerstedt LJ, Bush B, Peterson S - PLoS ONE (2012)

Bottom Line: The National Renewable Energy Laboratory developed the Biomass Scenario Model, a system dynamics model which represents the primary system effects and dependencies in the biomass-to-biofuels supply chain.A large, economically sustainable ethanol fuel market (or other biofuel market) requires low end-user fuel price relative to gasoline and sufficient producer payment, which are difficult to achieve simultaneously.Other requirements (different for ethanol vs. other biofuel markets) include the need for infrastructure for distribution and dispensing and widespread use of high ethanol blends in flexible-fuel vehicles.

View Article: PubMed Central - PubMed

Affiliation: National Renewable Energy Laboratory, Strategic Energy Analysis Center, Golden, Colorado, United States of America. laura.vimmerstedt@nrel.gov

ABSTRACT
The Energy Independence and Security Act of 2007 targets use of 36 billion gallons of biofuels per year by 2022. Achieving this may require substantial changes to current transportation fuel systems for distribution, dispensing, and use in vehicles. The U.S. Department of Energy and the National Renewable Energy Laboratory designed a system dynamics approach to help focus government action by determining what supply chain changes would have the greatest potential to accelerate biofuels deployment. The National Renewable Energy Laboratory developed the Biomass Scenario Model, a system dynamics model which represents the primary system effects and dependencies in the biomass-to-biofuels supply chain. The model provides a framework for developing scenarios and conducting biofuels policy analysis. This paper focuses on the downstream portion of the supply chain-represented in the distribution logistics, dispensing station, and fuel utilization, and vehicle modules of the Biomass Scenario Model. This model initially focused on ethanol, but has since been expanded to include other biofuels. Some portions of this system are represented dynamically with major interactions and feedbacks, especially those related to a dispensing station owner's decision whether to offer ethanol fuel and a consumer's choice whether to purchase that fuel. Other portions of the system are modeled with little or no dynamics; the vehicle choices of consumers are represented as discrete scenarios. This paper explores conditions needed to sustain an ethanol fuel market and identifies implications of these findings for program and policy goals. A large, economically sustainable ethanol fuel market (or other biofuel market) requires low end-user fuel price relative to gasoline and sufficient producer payment, which are difficult to achieve simultaneously. Other requirements (different for ethanol vs. other biofuel markets) include the need for infrastructure for distribution and dispensing and widespread use of high ethanol blends in flexible-fuel vehicles.

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Ethanol consumption, incentive costs, and cost effectiveness with three incremental gasoline costs.The figure shows model results for all years under different policy and incremental gasoline cost conditions. The left-hand column shows results under Higher Market and Infrastructure Incentive conditions, while the right-hand column shows results under Lower Market and Infrastructure Incentive conditions. Three levels of incremental gasoline costs are represented with three different sizes of marks. The cumulative net subsidy color scale shows government payments or revenues generated, assuming that incremental gasoline costs are revenue in the form of gasoline taxes. The top row shows ethanol consumption over time; the middle row shows cumulative subsidy (with incremental gasoline costs treated as a subsidy and added to other costs, rather than being subtracted as they were for the cumulative net subsidy scale); the bottom row shows a metric of effectiveness of investment in annual production capacity–Capacity Expansion Cost Effectiveness.
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pone-0035082-g005: Ethanol consumption, incentive costs, and cost effectiveness with three incremental gasoline costs.The figure shows model results for all years under different policy and incremental gasoline cost conditions. The left-hand column shows results under Higher Market and Infrastructure Incentive conditions, while the right-hand column shows results under Lower Market and Infrastructure Incentive conditions. Three levels of incremental gasoline costs are represented with three different sizes of marks. The cumulative net subsidy color scale shows government payments or revenues generated, assuming that incremental gasoline costs are revenue in the form of gasoline taxes. The top row shows ethanol consumption over time; the middle row shows cumulative subsidy (with incremental gasoline costs treated as a subsidy and added to other costs, rather than being subtracted as they were for the cumulative net subsidy scale); the bottom row shows a metric of effectiveness of investment in annual production capacity–Capacity Expansion Cost Effectiveness.

Mentions: The effects of a given incremental investment in any single type of incentive depend heavily upon the levels of other incentives and the state of development of the system. This is illustrated in Figure 5, which shows in the top row the effects (on ethanol consumption in billion gallons per year over time) of Higher (left column) and Lower (right column) Market and Infrastructure Incentives at three different levels of incremental gasoline cost. In the top row, four different lines can be observed, corresponding to the No Policy case and $0.00, $0.50, and $1.00 per gallon incremental gasoline cases for each column. With Lower Market and Infrastructure Incentives (right column), changes in the incremental gasoline cost increases ethanol consumption, whereas at Higher Market and Infrastructure Incentive levels (left column), the three lines at different incremental gasoline costs overlap, indicating that little opportunity remains for a $1.00 incremental gasoline cost to have additional impacts on ethanol consumption, because the other incentives embodied in the Higher Market and Infrastructure Incentive set have already increased consumption. The lines with $0.00/gal incremental gasoline cost, appearing as small, light-red dots, correspond to the Higher and Lower Market and Infrastructure Incentives lines in Figure 4, and the 2022 values of these lines for ethanol consumption–19 billion gallons per year (Higher) and 15 billion gallons per year (Lower)–are shown in Table 5.


Ethanol distribution, dispensing, and use: analysis of a portion of the biomass-to-biofuels supply chain using system dynamics.

Vimmerstedt LJ, Bush B, Peterson S - PLoS ONE (2012)

Ethanol consumption, incentive costs, and cost effectiveness with three incremental gasoline costs.The figure shows model results for all years under different policy and incremental gasoline cost conditions. The left-hand column shows results under Higher Market and Infrastructure Incentive conditions, while the right-hand column shows results under Lower Market and Infrastructure Incentive conditions. Three levels of incremental gasoline costs are represented with three different sizes of marks. The cumulative net subsidy color scale shows government payments or revenues generated, assuming that incremental gasoline costs are revenue in the form of gasoline taxes. The top row shows ethanol consumption over time; the middle row shows cumulative subsidy (with incremental gasoline costs treated as a subsidy and added to other costs, rather than being subtracted as they were for the cumulative net subsidy scale); the bottom row shows a metric of effectiveness of investment in annual production capacity–Capacity Expansion Cost Effectiveness.
© Copyright Policy
Related In: Results  -  Collection

Show All Figures
getmorefigures.php?uid=PMC3351488&req=5

pone-0035082-g005: Ethanol consumption, incentive costs, and cost effectiveness with three incremental gasoline costs.The figure shows model results for all years under different policy and incremental gasoline cost conditions. The left-hand column shows results under Higher Market and Infrastructure Incentive conditions, while the right-hand column shows results under Lower Market and Infrastructure Incentive conditions. Three levels of incremental gasoline costs are represented with three different sizes of marks. The cumulative net subsidy color scale shows government payments or revenues generated, assuming that incremental gasoline costs are revenue in the form of gasoline taxes. The top row shows ethanol consumption over time; the middle row shows cumulative subsidy (with incremental gasoline costs treated as a subsidy and added to other costs, rather than being subtracted as they were for the cumulative net subsidy scale); the bottom row shows a metric of effectiveness of investment in annual production capacity–Capacity Expansion Cost Effectiveness.
Mentions: The effects of a given incremental investment in any single type of incentive depend heavily upon the levels of other incentives and the state of development of the system. This is illustrated in Figure 5, which shows in the top row the effects (on ethanol consumption in billion gallons per year over time) of Higher (left column) and Lower (right column) Market and Infrastructure Incentives at three different levels of incremental gasoline cost. In the top row, four different lines can be observed, corresponding to the No Policy case and $0.00, $0.50, and $1.00 per gallon incremental gasoline cases for each column. With Lower Market and Infrastructure Incentives (right column), changes in the incremental gasoline cost increases ethanol consumption, whereas at Higher Market and Infrastructure Incentive levels (left column), the three lines at different incremental gasoline costs overlap, indicating that little opportunity remains for a $1.00 incremental gasoline cost to have additional impacts on ethanol consumption, because the other incentives embodied in the Higher Market and Infrastructure Incentive set have already increased consumption. The lines with $0.00/gal incremental gasoline cost, appearing as small, light-red dots, correspond to the Higher and Lower Market and Infrastructure Incentives lines in Figure 4, and the 2022 values of these lines for ethanol consumption–19 billion gallons per year (Higher) and 15 billion gallons per year (Lower)–are shown in Table 5.

Bottom Line: The National Renewable Energy Laboratory developed the Biomass Scenario Model, a system dynamics model which represents the primary system effects and dependencies in the biomass-to-biofuels supply chain.A large, economically sustainable ethanol fuel market (or other biofuel market) requires low end-user fuel price relative to gasoline and sufficient producer payment, which are difficult to achieve simultaneously.Other requirements (different for ethanol vs. other biofuel markets) include the need for infrastructure for distribution and dispensing and widespread use of high ethanol blends in flexible-fuel vehicles.

View Article: PubMed Central - PubMed

Affiliation: National Renewable Energy Laboratory, Strategic Energy Analysis Center, Golden, Colorado, United States of America. laura.vimmerstedt@nrel.gov

ABSTRACT
The Energy Independence and Security Act of 2007 targets use of 36 billion gallons of biofuels per year by 2022. Achieving this may require substantial changes to current transportation fuel systems for distribution, dispensing, and use in vehicles. The U.S. Department of Energy and the National Renewable Energy Laboratory designed a system dynamics approach to help focus government action by determining what supply chain changes would have the greatest potential to accelerate biofuels deployment. The National Renewable Energy Laboratory developed the Biomass Scenario Model, a system dynamics model which represents the primary system effects and dependencies in the biomass-to-biofuels supply chain. The model provides a framework for developing scenarios and conducting biofuels policy analysis. This paper focuses on the downstream portion of the supply chain-represented in the distribution logistics, dispensing station, and fuel utilization, and vehicle modules of the Biomass Scenario Model. This model initially focused on ethanol, but has since been expanded to include other biofuels. Some portions of this system are represented dynamically with major interactions and feedbacks, especially those related to a dispensing station owner's decision whether to offer ethanol fuel and a consumer's choice whether to purchase that fuel. Other portions of the system are modeled with little or no dynamics; the vehicle choices of consumers are represented as discrete scenarios. This paper explores conditions needed to sustain an ethanol fuel market and identifies implications of these findings for program and policy goals. A large, economically sustainable ethanol fuel market (or other biofuel market) requires low end-user fuel price relative to gasoline and sufficient producer payment, which are difficult to achieve simultaneously. Other requirements (different for ethanol vs. other biofuel markets) include the need for infrastructure for distribution and dispensing and widespread use of high ethanol blends in flexible-fuel vehicles.

Show MeSH