Modeling the Effects of Pelleting on the Logistics of Distillers Grains Shipping

Authors: Rosentrater, Kurt; KONGAR, ELIF - University Of Bridgeport

Submitted to: Bioresource Technology
Publication Type: Peer Reviewed Journal
Publication Acceptance Date: 6/18/2009
Publication Date: 8/14/2009
Citation: Rosentrater, K.A., Kongar, E. 2009. Modeling the Effects of Pelleting on the Logistics of Distillers Grains Shipping. Bioresource Technology. 100:6550-6558.

Interpretive Summary: Scarcity and cost of nonrenewable fossil fuels have been a growing focus of many energy-dependent nations, including the U.S., for the past couple of decades. There are mainly two ways to approach these problems: (1) reducing the energy dependency and/or (2) developing alternative means of energy production. Utilizing biofuels, which are renewable sources of energy, is a promising way to produce energy. But, as this industry grows, so too does the quantity of byproducts, which are known as DDGS. This paper discusses a computer model that has been developed to analyze the economic viability of processing DDGS into pellets. Capital and operational costs for various DDGS production rates and pelleting ratios are considered in the model. The developed model was run for a variety of scenarios, including different DDGS production rates and pelleting ratios. Simulation results indicate that as pelleting ratio increases, the cost to ship DDGS by rail decreases substantially. These decreases are increasingly profound as DDGS production rate increases.

Technical Abstract: The energy security needs of energy importing nations continue to escalate. It is clear that biofuels can help meet some of the increasing need for energy. Theoretically, these can be produced from a variety of biological materials, including agricultural residues (such as corn stover and wheat straw), perennial grasses, legumes, algae, and other biological materials. Currently, however, the most heavily utilized material is corn starch. Industrial fuel ethanol production primarily uses corn, because it is readily converted into fuel at a relatively low cost compared to other biomass sources. The production of corn-based ethanol in the U.S. is dramatically increasing. As the industry continues to grow, the amount of byproducts and coproducts also increases. At the moment, the nonfermentable residues (which are dried and sold as distillers dried grains with solubles – DDGS) are utilized only as livestock feed. The sale of coproducts provides ethanol processors with a substantial revenue source and significantly increases the profitability of the production process. Even though these materials are used to feed animals in local markets, as the size and scope of the industry continues to grow, the need to ship large quantities of coproducts throughout the U.S. (as well as internationally) via rail also grows. Value-added processing options offer the potential to increase the sustainability of each ethanol plant, and thus the industry overall. However, implementation of new technologies will be dependent upon how their costs interact with current processing costs and the logistics of coproduct deliveries. The objective of this study was to examine some of these issues by developing a computer model to determine potential cost ramifications of using various alternative technologies during ethanol processing. This paper focuses specifically on adding a densification unit operation (i.e., pelleting) to produce value-added DDGS at a fuel ethanol manufacturing plant. We have examined the economic implications of pelleting DDGS for varying DDGS production rates (100 to 1000 tons/d) and pelleting rates (0 to 100%), for a series of DDGS sales prices ($50/ton to $200/ton). As the proportion of pelleting increases, the cost of transporting DDGS to distant markets drastically declines, because the rail cars can be filled to capacity. For example, at a DDGS sales price of $50/ton, 100% pelleting will reduce shipping costs (both direct and indirect) by 89% compared to shipping the DDGS in bulk form (i.e., no pelleting), whereas at a DDGS sales price of $200/ton, it will reduce costs by over 96%. It is clear that the sustainability of the ethanol industry can be improved by implementing pelleting technology for the coproducts, especially at those plants that ship their DDGS via rail.