Costs of Pelleting to Enhance the Logistics of Distillers Grains Shipping

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

Submitted to: Meeting Proceedings
Publication Type: Proceedings
Publication Acceptance Date: 9/16/2009
Publication Date: 10/11/2009
Citation: Rosentrater, K.A., Kongar, E. 2009. Costs of Pelleting to Enhance the Logistics of Distillers Grains Shipping. 2009 ASABE Bioenergy Engineering Conference, Seattle WA, October 11-14, 2009.

Interpretive Summary: Biofuels, especially corn-based ethanol, can help meet some of the increasing demand for transportation fuels. Currently, the most heavily utilized substrate is corn grain, which is readily converted into ethanol at a relatively low cost compared to other biomass sources. The production of ethanol in the U.S. has been dramatically increasing during the last several years; so too has the quantity of manufacturing coproducts. These nonfermentable residues are most often dried and sold as distillers dried grains with solubles – DDGS. Even though these materials are used to feed livestock in local markets, as the size of the industry continues to grow, the need to ship large quantities of coproducts nationally and internationally will also increase. Various processing options offer the potential to increase the sustainability and improve the economics of each ethanol plant, and thus the industry overall. However, implementation will be dependent upon how new costs interact with current processing costs. This paper focuses specifically on determining the costs to add a pelleting operation at an existing fuel ethanol manufacturing plant. We have examined all captial and operational costs, as well as benefits for pelleting DDGS at varying production rates (100 to 1000 tons/d). We have determined that as the DDGS generation rate increases, the cost of pelleting drastically declines, due to the development of economies of scale. For example, at a DDGS generation of 100 ton/d, the cost to pellet was $14.07/ton/y; whereas at a scale of 1000 ton/d, the cost to pellet was only $3.95/ton/y. Thus at large production scales, the cost of adding and operating a pelleting line is minimized compared to the lower production rates. The sustainability of the ethanol industry can be improved by implementing pelleting technology, especially at those plants that ship their DDGS via rail.

Technical Abstract: Biofuels, especially corn-based ethanol, can help meet some of the increasing demand for transportation fuels. Currently, the most heavily utilized substrate is corn grain, which is readily converted into ethanol at a relatively low cost compared to other biomass sources. The production of ethanol in the U.S. has been dramatically increasing during the last several years; so too has the quantity of manufacturing coproducts. These nonfermentable residues are most often dried and sold as distillers dried grains with solubles – DDGS. Even though these materials are used to feed livestock in local markets, as the size of the industry continues to grow, the need to ship large quantities of coproducts nationally and internationally will also increase. Various processing options offer the potential to increase the sustainability and improve the economics of each ethanol plant, and thus the industry overall. However, implementation will be dependent upon how new costs interact with current processing costs. This paper focuses specifically on determining the costs to add a pelleting operation at an existing fuel ethanol manufacturing plant. We have examined all captial and operational costs, as well as benefits for pelleting DDGS at varying production rates (100 to 1000 tons/d). We have determined that as the DDGS generation rate increases, the cost of pelleting drastically declines, due to the development of economies of scale. For example, at a DDGS generation of 100 ton/d, the cost to pellet was $14.07/ton/y; whereas at a scale of 1000 ton/d, the cost to pellet was only $3.95/ton/y. Thus at large production scales, the cost of adding and operating a pelleting line is minimized compared to the lower production rates. The sustainability of the ethanol industry can be improved by implementing pelleting technology, especially at those plants that ship their DDGS via rail.