Influence of plant size on cost of production
In this study, cost estimates were developed for HDRD production
from canola and camelina oil in Western Canada. It was assumed
that the HDRD plant was constructed on the same site as
an oil refinery in order to take advantage of existing utilities such
as power, hydrogen, fuel gas, and cooling water. As is the case for
most field-sourced biomass processing plants, the HDRD plants
display the characteristic ‘‘U-shaped’’ production cost curve for
the range of plant sizes considered. This distinctive curve shape
arises because as the plant size is increased, the production cost
initially decreases due to economies of scale for capital costs but
as the plant size is increased further, the economy of scale benefit
is offset by increasing feedstock transportation costs. The transportation
costs increase with plant size because for high capacity
HDRD plants, the vegetable oil needs to sourced from locations farther
away from the plant compared to low capacity HDRD plants.
The economically optimum size of production plant was determined
by finding the plant size at which the production cost is
minimized.
Since feedstock cost is a critical variable for overall HDRD production
cost, three cases were considered for this study:
(1) Canola oil as a feedstock with a purchase price of $0.55/L.
(2) Camelina oil as a feedstock with a purchase price of $0.28/L
(meal sold).
(3) Camelina oil as a feedstock with a purchase price of $0.82/L
(meal not sold).
The production costs of HDRD for these cases for a range of production
plant sizes are shown in Fig. 4.