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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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Effect of policy sunset on ethanol consumption.The figure shows ethanol consumption results for all years, with the entire set of policies terminated in the color-coded year. Different lines that have the same policy expiration year represent different sets of policies; however, we did not independently vary the policy duration. The figure shows that the market declines precipitously in the absence of policy intervention, under modeled conditions.
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pone-0035082-g007: Effect of policy sunset on ethanol consumption.The figure shows ethanol consumption results for all years, with the entire set of policies terminated in the color-coded year. Different lines that have the same policy expiration year represent different sets of policies; however, we did not independently vary the policy duration. The figure shows that the market declines precipitously in the absence of policy intervention, under modeled conditions.

Mentions: Determining when a policy intervention should terminate is an important element of policy design. In the policy cases, we applied policies throughout the analysis period. Here, we show the results of an analysis of the effect of the timing of policy termination, or sunset. This analysis shows that the model estimates precipitous market decline in the absence of the policy conditions (see Figure 7). This does not imply that the market requires indefinite continuation of policy intervention. To explore the question of what policy intervention portfolio could most effectively establish a self-sustaining market, further analysis would be required of duration, combinations, magnitudes of policy intervention. In this analysis, we did not vary the duration of each policy independently of the other policies or explore the diversity of possible combinations and sequences. For example, we did not terminate infrastructure policies earlier than market policies to assess whether infrastructure policies alone can be phased out after infrastructure development reaches a threshold level, without triggering precipitous market decline. In Figure 7, different lines that have the same policy expiration year represent different combinations of polices. The highest line represents the Lower Market and Infrastructure Incentives case with $2.00/gal incremental gasoline cost, up to the expiration year, while the lines below it have some of the policies turned off during all years. Further analysis would be required to determine whether certain policies could be terminated before others without reducing consumption. Such tests are beyond the scope of this paper but could explore whether infrastructure policies can be terminated once infrastructure penetration reaches a certain share, and after that an end-use price differential alone (whether the result of policy intervention or market conditions) would be sufficient to sustain the market.


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)

Effect of policy sunset on ethanol consumption.The figure shows ethanol consumption results for all years, with the entire set of policies terminated in the color-coded year. Different lines that have the same policy expiration year represent different sets of policies; however, we did not independently vary the policy duration. The figure shows that the market declines precipitously in the absence of policy intervention, under modeled conditions.
© Copyright Policy
Related In: Results  -  Collection

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

pone-0035082-g007: Effect of policy sunset on ethanol consumption.The figure shows ethanol consumption results for all years, with the entire set of policies terminated in the color-coded year. Different lines that have the same policy expiration year represent different sets of policies; however, we did not independently vary the policy duration. The figure shows that the market declines precipitously in the absence of policy intervention, under modeled conditions.
Mentions: Determining when a policy intervention should terminate is an important element of policy design. In the policy cases, we applied policies throughout the analysis period. Here, we show the results of an analysis of the effect of the timing of policy termination, or sunset. This analysis shows that the model estimates precipitous market decline in the absence of the policy conditions (see Figure 7). This does not imply that the market requires indefinite continuation of policy intervention. To explore the question of what policy intervention portfolio could most effectively establish a self-sustaining market, further analysis would be required of duration, combinations, magnitudes of policy intervention. In this analysis, we did not vary the duration of each policy independently of the other policies or explore the diversity of possible combinations and sequences. For example, we did not terminate infrastructure policies earlier than market policies to assess whether infrastructure policies alone can be phased out after infrastructure development reaches a threshold level, without triggering precipitous market decline. In Figure 7, different lines that have the same policy expiration year represent different combinations of polices. The highest line represents the Lower Market and Infrastructure Incentives case with $2.00/gal incremental gasoline cost, up to the expiration year, while the lines below it have some of the policies turned off during all years. Further analysis would be required to determine whether certain policies could be terminated before others without reducing consumption. Such tests are beyond the scope of this paper but could explore whether infrastructure policies can be terminated once infrastructure penetration reaches a certain share, and after that an end-use price differential alone (whether the result of policy intervention or market conditions) would be sufficient to sustain the market.

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
Related in: MedlinePlus