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Abstract
A mixed-integer programming model is developed to assess the economic feasibility of siting
a woody biomass-based ethanol facility in the central Appalachian hardwood region. The
model maximizes the net present value (NPV) of a facility over its economic life. Model inputs
include biomass availability, biomass handling system type, plant investment and capacity,
transportation logistics, feedstock and product pricing, project financing, and taxes. Four
alternative woody biomass handling systems, which include all processes from stand to plant, are
considered. Eleven possible plant locations were identified based on site selection requirements.
Results showed that the optimal plant location was in Buckhannon, West Virginia. The NPV of
the plant with a demand of 2,000 dry tons of woody biomass per day varied from $68.11 million
to $84.51 million among the systems over a 20-year plant life. Internal rate of return (IRR) of the
facility averaged 18.67% for the base case scenario. Average ethanol production costs were
approximately $2.02 to $2.08 per gallon. Production costs were most impacted by biomass
availability, mill residue purchase price, plant investment and capacity, ethanol yield, and
financing. Findings suggest that a woody biomass-based ethanol facility in central Appalachia
could be economically feasible under certain operational scenarios.