EVALUATION OF MICROSCALE SYNGAS

PRODUCTION COSTS THROUGH MODELING

L. Wei, L. O. Pordesimo, S. D. Filip To, C. W. Herndon, W. D. Batchelor
ABSTRACT. Feasibility of biomass gasification is very much dependent on the cost of the gasification facility and its operation.
A cost analysis model was accordingly developed to analyze the unit cost of syngas production from microscale biomass
gasification facilities. Costs considered included all capital and operating costs. The model was applied to evaluate a
scenario for Mississippi in 2008. Results of the modeling indicated that operating cost was the major part of the syngas
production cost, and the singleshift operating cost could be up to 83.64% of the total annual cost of syngas production at
the 60 Nm 3 h1 capacity level. Labor cost was the largest part of the operating cost and the total annual cost. The labor cost
could be up to 73.60% of the total of annual operating cost and 61.56% of the total annual cost of syngas production. The
unit cost and energy cost of syngas production of the 60 Nm 3 h1 facility were $0.55 Nm 3 and $0.095 MJ 1, respectively, which
were higher than the $0.357 Nm 3 and $0.009 MJ 1 natural gas average retail prices in the U.S. in the fourth quarter of 2008.
When the production capacity increased, the total syngas production annual cost continually increased, but the syngas unit
cost markedly decreased. Therefore, the effective way to reduce costs is to plan for a highercapacity microscale facility.
Sensitivity analysis showed that, from the lower bound to the upper bound of the production capacity range tested (60 to
1800Nm 3 h1), there was a shift from labor cost to equipment cost as the factor of greatest influence on syngas unit cost. Such
information provided by the model identifies considerations for planning and/or operating microscale gasification facilities.
The model can be a tool for analyzing the economics of syngas production and, in that regard, it can generate useful
information for the design of smaller gasification plants.
Keywords. Biomass, Cost analysis, Facility, Gasification, Microscale, Modeling, Syngas.

he potential for biomass gasification technology is

great because the technology is already developed,
renewable resources are used for producing fossil
fuel alternatives, it has high thermal efficiency and
neutral CO2 emission, and the likely rural installation for
proximity to feedstocks will promote rural economic
development. For these reasons, commercial and
entrepreneurial interest in the technology has been growing,
especially in recent years (Rollins et al., 2002; Carig and
Mann, 1996; Ringer et al., 2006; Tsamba, 2001; Wei et al.,
2009a; Wei et al., 2009b; Tsamba, 2001).
Many efforts have made to produce renewable energy and/
or chemical products from biomass gasification in the past

Submitted for review in March 2009 as manuscript number FPE 7959;

approved for publication by the Food & Process Engineering Institute
Division of ASABE in September 2009.
Trade names are provided for the sake of factual reporting. Mississippi
State University neither guarantees nor warrants the standard of the product
and the use of the trade name implies no approval of the product to the
exclusion of others
The authors are Lin Wei, ASABE Member Engineer, Graduate
Research Assistant, Lester O. Pordesimo, ASABE Member Engineer,
Assistant Professor, and S. D. Filip To, ASABE Member Engineer,
Associate Professor, Department of Agricultural and Biological
Engineering , Mississippi State University, Mississippi State, Mississippi;
C. W Bill Herndon, Professor, and William D. Batchelor, ASABE
Fellow, Professor and Head, Department of Agricultural Economics,
Mississippi State University, Mississippi State, Mississippi.
Corresponding author: Lin Wei, Department of Agricultural and
Biological Engineering, Mississippi State University, Box 9632,
Mississippi State, MS 39762; phone: 6623259106; fax: 6623253853;
email: lw196@msstate.edu.

decades. Although progress in gasification has made this

technology more efficient, environmentally more
acceptable, and convenient to use, there are still obstacles
that hinder wider industrial application of the technology.
Aside from the difficulties in preparation of feedstock and
conditioning product gas, economic feasibility is one of the
greatest issues in biomass gasification. Research has shown
that the type and scale of gasification facilities mostly depend
on biomass resource type and amount available to sustain the
operation. The economic feasibility of gasification facilities
can be improved if production cost can be lowered either by
increasing production scale or by lowering input cost, or
both. Production cost can be significantly lowered with large
scale installations (equivalent electricity capacity greater
than 20 MWe) (Bain, 2000; Mitchell et al., 1995; Badger,
2002; Walsh, 1998; Williams, 2005; Rollins et al., 2002;
Carig and Mann, 1996; Ringer et al., 2006). However, Walsh
et al. (2000), Savola (2007), Larson (1998), Amos (1998),
Wei et al. (2009a), and Jenkins (1997) noted that smallscale
or microscale biomass gasification systems also have
potential demand in energy markets because of their many
advantages that can not be provided economically by large
scale systems. For instance, small or microscale systems
can be produced modularly through standardized
manufacturing with compact size and high reliability, can be
run with local biomass resources to reduce transportation
cost, can provide local utilization for rural residents or small
industries such as agriculture or forest process mills, and
require less upfront investment, thereby reducing
investment risk. In this regard, it is noteworthy that demand
for small or microscale systems seems to be growing in both

Transactions of the ASABE

Vol. 52(5): 1649-1659

E 2009 American Society of Agricultural and Biological Engineers ISSN 0001-2351

1649

developed and developing countries (Bain et al., 2003; Purvis

and Craig, 1998; Larson, 1998; Jenkins, 1997). Nonetheless,
the economic feasibility of small or microscale gasification
systems is still the greatest challenge.
Fundamental to understanding the economic feasibility of
a biomass gasification facility is determining its production
cost, which is a function of biomass feedstock preparation,
conversion, conditioning of the produced synthetic gas
(syngas), and other procurement, transaction, and
opportunity costs. A minimal gasification facility may
consist of a gasifier system and other adjunct service
facilities, such as a feedstock pretreatment system, storage
yard, water and electricity station, waste disposal system,
and/or fire control and security systems. Because many
factors affect syngas production costs, costing is complex and
challenging. There have been some estimates of syngas
production cost for largescale biomass gasification
facilities, but some of the most commonly used data sources
in existing studies are somewhat dated or contentious. The
lack of adequate data makes the general optimization of
biomass gasification facilities uncertain, especially for
small or microscale facilities. On the other hand, the
demand for small or microscale gasification systems
creates the need for accurate, rigorous, and uptodate
estimates of biomass gasification production cost. It is
necessary to evaluate systemically the economics of small
or microscale gasification facilities. Therefore, the goal of
this study was to develop a cost analysis model for the
assessment of biomass gasification projects and to analyze
the components of syngas production cost in microscale
biomass gasification facilities.

MODEL DEVELOPMENT
To develop systemically a computational platform for
syngas production cost analysis, the configuration of a micro
scale biomass gasification facility of interest is first outlined
and then followed by a description of syngas production.
Secondly, a syngas production cost analysis model based on
chemical engineering costing methods is developed. Finally,
the model is applied to analyze syngas production cost using
microscale biomass gasification facilities in Mississippi as
the case scenario. All analyses and calculations of costing are
on a beforeincometax basis.
FACILITY DESCRIPTION
The facility of interest in this study is one that would be
termed microscale. Commercially, biomass gasification
facilities vary from micro to small to large scale based on
equipment type and size, or operating conditions. There is
still no consensus standard that delineates between small
and largescale facilities; however, electricity capacity
equivalent to 20 MW (MWe) is a widely accepted boundary
in the biomass gasification community (Bain et al., 2003;
Jenkins, 1997; Larson, 1998; Savola, 2007). This means that
equivalent electricity capacity less than 20 MWe is small
scale, while greater than 20 MWe is defined as largescale. It
is generally considered that gasifier systems having an
equivalent electricity capacity less than 0.5 MWe are micro
scale. The microscale biomass gasification facilities for this
study are described below.

1650

General Specifications
S Equivalent electricity capacity less than 0.5 MWe or
syngas production capacity less than 1800 Nm3 h1
(STP: 101.3 kPa and 25C).
S Onsite available biomass resource with zero
transported distance, or the radius of feedstock supply
is less than 32 km (about 20 miles). For instance, forest
or agricultural residues available at pulp and lumber
plants, sawmills, or farms.
S Onsite use. Products of biomass gasification, either
syngas or heat, are only used in close proximity to the
facility (in residences or small industrial applications).
Available onsite structure or minimal construction
required for installation of the microscale gasifier
system.
Configuration
The configuration of microscale biomass gasification
facilities usually consists of three units: feedstock
preparation, gasification, and syngas cleaning (fig. 1).
Control devices (also named the controller) and adjunct
facilities may be attached to the units as required. The
controller mainly consists of a computer and its software,
sensors, and instruments such as thermocouples, flowmeters,
and/or carbon monoxide detectors. The cleaning train
includes a cyclone (or char knockedout pot), a heat
exchanger, a tar cracker, and a filter set. Fire control and gas
leaking monitoring systems are necessary because the
produced syngas is a highly flammable mixture and contains
a toxic component, carbon monoxide. Adjunct facilities such
as electricity and water supply, and/or waste disposal may
also be needed in some cases.
The pilot microscale biomass gasification system
installed at the Mississippi State University (MSU)
Department of Agricultural and Biological Engineering
Research Building in 2003, which was centered on an
atmospheric, downdraft, fixedbed gasifier system (BioMax
Renewable Fuel Gas Generator, Community Power
Corporation (CPC) of Littleton, Colo.), is representative of
the above configuration. The fullload capacity of the gasifier
system was designed by CPC to produce syngas at 60 Nm3 h1
rate or an electrical equivalent of 15 kWe.
SYNGAS PRODUCTION
Syngas production in the microscale gasification facility
starts with receipt of raw biomass feedstock. Raw biomass
feedstock for gasification may have moisture content (MC,
wet basis) ranging from 5% to 50%. Thus, some feedstock
may need sizing and/or drying. The prepared feedstock is
then fed into the gasifier, the control system is initialized, and
an internal heater is turned on to warm up the system and then
ignite the feedstock. The heater takes 30 to 40 min to warm
up the system. After the system warms up to a set
temperature, the heater is automatically turned off. At that
point, the system is under fully automated control for syngas
production.
The feedstock loaded into the gasifier undergoes four
stages of chemical reaction in the process of being converted
into syngas: drying, pyrolysis, oxidation, and reduction.
Since biomass feedstock is fed into the gasifier as a moist
material, drying of the feedstock occurs in the first reaction
zone using heat transferred from the highertemperature
zones of the gasifier. When water starts to be driven from the

TRANSACTIONS OF THE ASABE

Syngas Cleaning
Biomass
Resource

Root
Blower

Wet
Biomass

Conveyer
Bag
Filter

Feedstock Preparation

Sizing

Drying

Clear
Syngas

Hot Air

Heat
Exchanger

Dry
Biomass

Cooling
Air

Feeder
Char
Knocked-out
Pot

Gasifier
Air

Char
Bin
Unclear
Syngas

Gasification
Ash

Figure 1. Microscale biomass gasification system.

feedstock and converted to steam, part of this water vapor

may be reduced to hydrogen during gasification, and the rest
can end up as moisture in the produced syngas. Therefore,
additional water may not be necessary for some biomass
gasification processing (watergas shift reaction), as in this
study. In the drying zone, the feedstock does not experience
appreciable chemical decomposition but only consumes heat
to evaporate water and keep the drying zone temperature low.
After drying, the feedstock moves to a highertemperature
zone and begins to pyrolyze at temperatures above 200C.
Pyrolysis is the thermal decomposition of the biomass
feedstock in the absence of oxygen at temperatures ranging
from 200C to 600C. Generally, pyrolysis results in
production of three products: solid char, liquid tar, and a
mixture of gases. The proportions of these components are
influenced by the chemical compositions of the feedstock
and the operating conditions of the gasifier. The large
molecules (cellulose, hemicelluloses, and lignin) of the
biomass feedstock break down into mediumsized molecules
and carbon (char) during pyrolysis. If the char and medium
sized molecules remain in the hot zone long enough, some
will break down into even smaller molecules of CO, CO2, H2,
CH4, and even ethane or ethylene. If the residence time is too
short or the gasifier temperature too low, then the medium
sized molecules escape further decomposition and may
condense as tars and oils in succeeding lowertemperature
zones of the gasifier system.
After pyrolysis, the pyrolysis products move into the
much hotter oxidation zone. Air is introduced into the
oxidation zone under starved oxygen conditions. In addition
to oxygen and water vapor, the air contains inert gases, such
as nitrogen, which are considered to be nonreactive with fuel
constituents at relatively low pressures and temperatures.
The oxidation takes place at temperatures ranging from
700C to 1000C. Heterogeneous reactions take place
between the oxygen in the air and the carbon contained in the

Vol. 52(5): 1649-1659

feedstock, producing carbon dioxide. Hydrogen in the

feedstock also reacts with oxygen in the introduced air,
producing steam and heat and raising the reactor
temperatures for drying, pyrolysis, and reduction. Reactions
with oxygen are highly exothermic and can result in a sharp
rise in temperature of up to 1200C. The heat generated by
the oxidation provides energy for the gasification process.
The reaction products of the oxidation zone, hot gases and
glowing char, move continually into the reduction zone.
Since there is insufficient oxygen in the hightemperature
oxidation zone, a number of reduction reactions take place
between the hot gases (CO, H2O, CO2, and H2) and char. In
this zone, the sensible heat of the gases and char is converted
into stored chemical energy in the syngas since heat is
required during the reduction process. Hence, the
temperature of the product gas decreases at this stage. The
composition of the syngas is very much dependent on the
extent of the reduction reaction. If a higher equivalence ratio
(ER, the ratio of input air to required stoichiometric air for
complete feedstock combustion) is applied, then more
oxygen is fed into the gasifier and more biomass feedstock is
oxidized (combustion). This leads to higher temperatures in
the reaction zones, resulting in more CO2 and less CO in the
syngas. If complete gasification takes place, then all carbon
in the feedstock is oxidized or reduced to a mixture of gases
(such as CO, H2O, CO2, CH4, and H2), ash (solid
noncombustible mineral matter), tars, and some char
(unburned carbon). Syngas composition can vary depending
on the type of gasifier, oxidant, and feedstock used. The
syngas produced in this study from wood chip air gasification
(air used as oxidant) with a downdraft gasifier contained
about 22% CO, 12% CO2, 3% CH4, and 18% H2, with the
balance being H2O and N2 (Stevens, 2001; Wei et al., 2009a).
The raw syngas produced can be directly used for heating
or combustion applications. Other downstream applications
require a conditioning step to meet specific application

1651

requirements. Quality syngas can find application in

combined heat and power (CHP), liquid fuel generation, and/
or chemical production (Ciferno and Marano, 2002; Tsamba,
2001). In this study, the syngas is designated for fueling
internal combustion engines in a CHP application. It is
assumed that the syngas is compressed in storage tanks or
delivered directly to an engine or gas turbine for power
generation without those operations being considered in the
study.
PRODUCTION COST ANALYSIS
Focusing on just the cost of syngas production, the scope
of the cost analysis model includes only the stages from
feedstock receipt as the starting point to clean syngas output
as the end point. Syngas production unit cost before income
tax is the total annual production cost divided by the total
annual syngas yield. To determine the total annual
production cost of a gasification facility, all economic
information concerning the facility has to be known. This
includes the costs of all equipment purchases, construction,
loan interest, tax, land use, building, equipment installation
and testing, overhead, property insurance and tax, auxiliary
facility, feedstock, utilities, labor, maintenance, waste
treatment, contingency, and other general expenses (Mitchell
et al., 1995; Rollins et al., 2002; Williams, 2005). However,
at the design or assessment phase of a new project, most of
this information is unknown. It is difficult to estimate syngas
production cost with general cost accounting approaches.
Therefore, specific cost analysis models are necessary for
evaluating the syngas production cost of gasification
facilities. There are significant differences in construction,
installation, and operating procedures for different types and
scales of gasifiers, which will lead to significantly different
costs. No universal costing model to assess all biomass
gasification projects was found in the literature.
If cost analysis is performed for microscale gasification
facilities, which apply the same technology (similar
equipment and construction) and have similar working
conditions in a range of production capacities, then the
procedure and parameters of costing should be the same or
similar. In other words, the costing approaches are similar for
similar facilities. This is the fundamental principle of cost
evaluation methods for chemical engineering projects (Valle
Riestra, 1983; Turton et al., 1998). Following this principle,
a cost analysis model was developed for evaluating syngas
production cost of microscale gasification facilities.
Syngas production cost consists of two parts, capital costs
and operating costs. The capital costs include equipment,
installation, construction, property tax and insurance, loan
interest, overhead, and auxiliary costs. These capital costs are
large onetime investments in a facility. Standard business
practice allows a fraction of these costs (depreciation) to be
charged as part of production cost each year until the total
fixed capital cost have been charged. The deprecation is
significantly affected by the lifetime of the equipment and
building, the depreciation method, and the annual
deprecation rate. For simplicity, the straightline deprecation
method was used in the modeling.
Operating costs are obligated for running the facilities and
are charged annually. Operating costs consist of two
components: variable operating costs, which are proportional
to actual syngas production levels, and fixed costs, which are
charged annually whether the facility is run at high or low

1652

production levels. Generally, variable costs include raw

feedstock, income tax, utilities, labor, waste treatment, and
repair and maintenance. Fixed costs include insurance,
facility deprecation, overhead, and other general expenses
like administration, selling, and/or research costs.
The cost analysis model consisted of the 14 principal
equations shown below (nomenclature is listed at the end of
the article) in which operating and capital costs are calculated
in U.S. dollars. These calculations can be straightforwardly
sequenced and implemented in a spreadsheet program, which
was the case in this effort, or they can be programmed in any
computational software package or computer programming
language.
Unit cost of syngas production:
Cup =

C AC + C AO
Pc _ new H o

(1)

Annual capital cost:

C AC = RdecCcon + RdeeCeq + C Aintr

(2)

Annual operating cost:

C AO = C fsto + Cuti + Clabo + Cmaint
+ Cwast + Ccontig + C gen

(3)

Total of equipment purchase cost:

Ceq

Pc _ new

= Cex
Pc _ ex

exp

(4)

Construction cost:
Ccon = Ceq ( Fbud + Finsta + Finsu
+ Ftax + Ftsr + Fovh + Faux )
Subcapital
construction):

(5)

cost for the facility (equipment and

CC = Ceq + Ccon

(6)

Annual loan interest cost:

C A int r = CC Rloan Rintr

(7)

Feedstock cost:
s

(8)

Cuti = PelWel + PwaVwa

(9)

Clabo = mRlabo (1 + RFICA )

(10)

C fsto =

fstoiW fstoi

i =1

Utilities cost:

Labor cost:

Waste treatment cost:

C wast = PwastWwast

(11)

Maintenance cost:
Cma int = Rrepa Ceq

(12)

TRANSACTIONS OF THE ASABE

General expense for operating the facility:

C gen = Rgen C AO

(13)

Ccontig = Rcontig C AO

(14)

Contingency cost:

MODEL PARAMETERIZATION
Working conditions and operational assumptions for the
microscale gasification facility incorporated into the
modeling were the following (Wei et al., 2008; Walt, 2004;
Craig and Mann, 1996; Amos, 1998; Stassen, 1995; Valle
Riestra, 1983):
S The equipment purchase cost for a microscale
gasification facility is $2800 kW1.
S The feedstock used in the gasification study was
hardwood chips having a low heating value of 18.7 MJ
kg1 with no need for sizing and drying.
S One hour was needed for starting up and shutting down
the gasifier system for one shift of each working day.
S The gasifier system was run at 90% of fullload
capacity.
S Only one operator was needed to run the facility for
each shift.
S The low heating value of the syngas was assumed to be
5.8 MJ Nm3.
S The ash residue rate of wood chip gasification was
assumed to be 1% in weight.
S No water is needed for operating the facility.
S The recovery rate of the byproduct heat was assumed to
be 50%, and the recovered heat could be sold at
$0.01MJ 1.
S The capacity exponent for estimating new equipment
purchase cost is 0.6.
S The working hour model is 52 weeks per year, 5 days
per week, and 8 h per day for one shift.
S All market prices are fourth quarter 2008 prices in
Mississippi.
The equipment purchase cost was estimated to be
$2800kW1 based on the literature (Walt, 2004; Gallagher,
2002; Kumar et al., 2003; Craig and Mann, 1996; Stassen,
1995). This was an average cost estimate covering all the
major equipment in a biomass gasification facility typical of
the test facility defined, using the base configuration
represented by the MSU installation as the starting point.
This estimate then served as the basis for calculating
equipment costs for largercapacity facilities using equation
4 and a 0.6 capacityscaling exponent (Rutherford, 2006;
Turton et al., 1998; Gallagher, 2002; Kumar et al., 2003).
Other capital costs such as installation, construction,
overhead, and auxiliary costs were calculated through the
equipment costbased estimating equations in the cost
analysis model (Turton et al., 1998; ValleRiestra, 1983;
Craig and Mann, 1996; Stassen, 1995; Wei et al., 2008). The
property tax, insurance, and loan interest were obtained from
Mississippi market information,
To develop the model, economic assumptions had to be
made, and cost factors and prices had to be estimated. All
these would be affected by the financial climate, market
conditions, and technical resources in a particular location at
a particular time. Moreover, the cost factors of microscale
facilities are much lower than those of largescale facilities

Vol. 52(5): 1649-1659

Assumption

Table 1. Economic assumptions.

Value

Money value
Facility life
Tax life
Equipment life
Facility contingency
General expense
Supply of feedstock
and consumables
Depreciation method
Interest rate
Tax credit
Loan to equity ratio
Equity recovery rate

Cost Factor
Equipment
Building
Installation
Property tax
Property insurance
Auxiliaries
Overhead

Reference

U.S. dollar (Dec. 2008)

20 years
Ringer et al., 2006
15 years
Turton et al., 1998
15 years
Mitchell et al., 1995
10%
Craig and Mann, 1996
10%
Stassen, 1995
6 days
Straight line
4%
0
9:1
15%

ValleRiestra, 1983
Larson et al., 2006

Table 2. Model cost factors.

Symbol
Value
Ceq
Fbud
Finsta
Ftax
Finsu
Faux
Fovh

1.00
0.25
0.20
0.004
0.005
0.15
0.02

Reference

Dowaki et al., 2005

Ringer et al., 2006
Turton et al., 1998
Mitchell et al., 1995
ValleRiestra, 1983
Craig and Mann, 1996
Stassen, 1995

Table 3. Average prices of feedstock, utilities, and

labor in Mississippi in the fourth quarter of 2008.
Cost Item
Price
Reference
Feedstock[a]
$35 ton1 FOB
Wei et al., 2008
Electricity
$0.0718 kWh1
EIA, 2009a
Labor[b]
$33,280 year1 operator1 MDES, 2008; BLS, 2009
Mississippi Mills, 2009
Landfill of wastes
$40 ton1
[a]
[b]

Adjusted to include storage cost.

Labor cost includes employee's wages and FICA.

(Larson et al., 2006; Turton et al., 1998; ValleRiestra, 1983;

Gallagher, 2002; Kumar et al., 2003; Dowaki et al., 2005). In
reference to the foregoing considerations, assumptions and
estimates were made for the model, and these are presented
in tables 1 through 3. The principal reference for each of the
numbers is also indicated in the tables. A caveat to the
economic assumptions shown in table 1 is that in Mississippi
there is a 3% loan interest rate reduction for 7 years and a
property tax exemption for the first 10 years for new, small
scale, renewable energy projects (MDES, 2008; MDA,
2009). The values in table 3 are representative of fourth
quarter 2008 market prices in Mississippi.
The feedstock used in the study was hardwood chips
having a low heating value of 18.7 MJ kg1 (Ringer et al.,
2006; Craig and Mann, 1996; Stassen, 1995; Wei et al.,
2009a). In Mississippi, wood chips were priced at $11 to
$25ton 1 at production sites in 2008, depending on the
quality and source. For instance, wood chips having high MC
or more bark content were cheaper. The wood chips used in
the modeling were assumed to cost $35 ton1 FOB, which
included considerations for quality, transportation, and
storage. Moisture content of the hardwood chips was
assumed to be below 20%; therefore, no extra drying was
needed prior to gasification. The conversion rate of wood
chips to syngas was reported as ranging from 1.7 to 3.3 Nm3
kg1 in recent years (Wei et al., 2009a; Craig and Mann 1996;
Stassen, 1995; Mitchell et al., 1995; Walt, 2004). The

1653

conversion rate used in the modeling was 2.4 Nm3 kg1,

which was determined with the gasifier system at MSU and
reported by Wei et al. (2009a).

RESULTS AND DISCUSSION

The modeling was started at a syngas production capacity
of 60 Nm3 h1 and then incrementally scaled up to 1800 Nm3
h1. This range was chosen based on the fact that 60 Nm3 h1
(15 kWe) was the capacity of the MSU gasification system,
and 1800 Nm3 h1 (0.5 MWe) is the upperbound capacity for
a microscale gasification facility. Evaluation of facilities of
different capacities could be addressed by the model because
the equipment cost included all equipment in the facility;
therefore, the cost of an equipment set of greater or lesser
capacity could be calculated using the 0.6 scale factor
discussed earlier. The working hours, consumption of
feedstock, yield of syngas, and recovery of byproduct heat
were calculated for facilities of different production
capacities first, and then the syngas production costs were
computed within the cost analysis model. The syngas
production cost composition and the effect of gasification
facility scale on syngas production cost were analyzed, and
a sensitivity analysis was undertaken.
SYNGAS PRODUCTION COST COMPOSITION
A summary of syngas production data for a 60 Nm3 h1
facility in oneshift mode is presented in table 4, while
summaries of syngas production capital costs and operating
costs are presented in table 5. These are presented as
examples of the developed model's output. The results
showed that the total annual production cost of syngas was
$54065.115, thereby giving a syngas unit cost of $0.550 Nm3
in this operating mode. This unit cost is equivalent to an
energy cost of $0.095 MJ1.
The modeling results (table 5) showed that operating costs
are the major parts of syngas annual production cost. The
total of operating costs could be up to 83.64% of the annual
production cost, while the annual capital cost was only
16.36% of total annual production cost for a 60 Nm3 h1
facility. Although the annual capital cost is a smaller fraction
of the syngas production cost, there are opportunities to
reduce this cost. Since the equipment cost and loan interest
make up 31.66% and 32.26% of the total of capital costs,
respectively, selecting a suitable gasifier system and debt
ratio will reduce total capital costs and thereby lower the total
production cost.
The syngas annual production cost composition for a
60Nm 3 h1 facility is shown in figure 2. Labor cost was
61.56% of the syngas annual production cost. This was the
largest part of the total annual production cost, followed by
general expense (6.97%), contingency (6.97%), interest
(5.28%), and equipment cost (5.18%). The labor cost alone
Table 4. Syngas annual production data of microscale
gasification facility run at 60 Nm3 h1 in oneshift mode.
Syngas Production
Unit
Quantity
Working hour
Syngas production hour
Wood chip consumption
Syngas yield
Byproduct heat recovery

1654

h year1
h year1
kg year1
Nm3 year1
MJ year1

2080.00
1820.00
40950.00
98280.00
396191.25

Table 5. Syngas annual production costs of microscale

gasification facility run at 60 Nm3 h1 in oneshift mode.
Capital
Equipment
2800.000
costs
Building
735.000
Installation
560.000
($ year1)
Auxiliaries
210.000
Overhead
105.000
Property tax
35.700
Insurance
357.000
Interest
2853.144
Equity
1188.810

Operating
costs
($ year1)

Subtotal of capital costs

Percentage of total annual cost

8844.651
16.36%

Feedstock
Electricity
Labor
Waste treatment
Maintenance
Contingency
General expense

1433.250
576.468
33280.000
16.380
2377.620
3768.372
3768.372

Subtotal of operating costs

Percentage of total annual cost

45220.461
83.64%

Total of annual cost

Syngas unit cost
Energy cost

54065.115
$0.550 Nm3
$0.095 MJ1

made the annual operation of a 60 Nm3 h1 facility expensive.

Current microscale gasification systems exemplified by the
CPC unit at MSU still require fulltime supervision by an
operator. The syngas production unit cost could be decreased
by reducing labor through fully automated operation of the
gasifier unit. However, current commercial microscale units
are not yet developed to that extent.
The total annual production cost composition of syngas
production at an 1800 Nm3 h1 facility is shown in figure 3.
The results showed that the feedstock cost (22.94%) became
the largest part of the annual cost, followed by labor cost
(17.75%), loan interest (11.71%), and equipment cost
(11.49%). However, both general expense and contingency
were lowered to only 5.31% of the total of annual production
cost. These results indicate that feedstock, labor, interest, and
equipment costs become more important to the economics of
a highercapacity facility. At the same time, facility
maintenance, contingency, and general expense also
increased. Minimizing these costs will improve the economic
feasibility of such microscale gasification facilities.
Comparing the composition of annual production costs
between the 60 and 1800 Nm3 h1 facilities (figs. 2 and 3), the
stark contract is the labor cost: 61.56% at 60 Nm3 h1 versus
only 17.75% at 1800 Nm3 h1. Clearly, operating cost is the
negative factor in operating a lowcapacity family. This
result further shows that a gasification facility's production
capacity significantly affects syngas production costs.
Another enlightening observation was that the percentages
for general expense and contingency changed from 6.97% to
5.31% when the facility production capacity changed from 60
to 1800 Nm3 h1. These costs still remain large fractions of the
total annual production cost. Greater consideration of these
costs in any economic evaluation is warranted. General expense
and contingency were determined by cost factors multiplied by
total capital costs. Accurately estimating general expense and
contingency will improve the evaluation of the economics
microscale gasification facilities.

TRANSACTIONS OF THE ASABE

Figure 2. Annual production cost composition of a 60 Nm3 h1 gasification facility.

Figure 3. Annual production cost composition of an 1800 Nm3 h1 gasification facility.

EFFECTS OF GASIFICATION FACILITY SCALE

According to the preceding cost composition analysis, the
total annual production cost composition for syngas changed
significantly when the syngas production capacity of the
facility changed. The operating and capital costs as
percentages of the total annual production cost for different
capacities are shown in figure 4. The percentage of operating
cost decreased as the production capacity increased from 60
to 1800 Nm3 h1. This occurs because the total capital cost for
largecapacity facilities becomes larger than the operating
cost. The capital cost amounted to about onethird of the total
annual production cost for an 1800 Nm3 h1 facility.
The effect of gasification facility scale on syngas
production annual cost is shown in figure 5, and the effect on
syngas production unit cost are shown in figure 6. Although
the syngas production annual cost continually increased with
production capacity (fig. 5), the syngas production unit cost
significantly decreased (fig. 6). This resulted from the higher

Vol. 52(5): 1649-1659

Figure 4. Percentages of capital and operating costs for gasification

facilities of different capacities.

1655

Figure 5. Annual production costs for gasification facilities of different

capacities.

rate of increase of syngas yield compared to that of total

annual cost when the production capacity was scaled up. If
the byproduct heat produced from gasification is considered
to be recovered and economically accounted for in the syngas
production cost, then the total annual cost and the unit cost
could be even lower (fig. 6).

According to statistics from the U.S. Energy Information

Administration (EIA, 2009b), the average retail price for
industrial natural gas in the U.S. in the fourth quarter of 2008
was $0.357 Nm3, and the energy cost of natural gas was
$0.009 MJ1. Comparing natural gas to syngas, the unit cost
of syngas production was close to the price of natural gas
when the syngas production capacity was scaled up to
100Nm 3 h1 (fig. 6). The effects of gasification facility scale
on energy cost are shown in figure 7. The syngas energy cost
was much higher than that of natural gas when gasification
facilities ran at low capacity (fig. 7). This is because the
heating value of syngas (5.8 MJ Nm3) is much lower than
that of natural gas (39 MJ Nm3). Even if the facility was run
at 1800 Nm3 h1 capacity, the $0.012 MJ1 energy cost of
syngas was still higher than the $0.009 MJ1 cost of natural
gas. However, with byproduct heat compensation at the same
capacity level, the syngas energy cost was reduced to
$0.004MJ 1. At this cost, it would be possible to compete
economically with natural gas. The model results displayed
a trend of syngas production unit cost decreasing as the
capacity of the microscale gasification facility increased.
These results indicate that increasing production capacity of
the gasification facility is an effective way of reducing syngas

Figure 6. Syngas unit costs for gasification facilities of different production capacities.

Figure 7. Energy costs of gasification facilities run at different production capacities.

1656

TRANSACTIONS OF THE ASABE

Figure 8. Syngas unit costs response to variations in different cost factors

for a 60 Nm3 h1 facility.

production unit cost and improving the economic feasibility

of syngas.
As demonstrated by the results obtained, the cost
modeling proved to be an effective tool for analyzing the cost
configuration and for providing useful information for
syngas production cost evaluation and reduction. Although
the model may be still be crude due to the lack of adequate
realistic operating experience and proven data, it will be
improved with everincreasing data and knowledge from
research.
SENSITIVITY ANALYSIS
A sensitivity analysis was undertaken to examine how the
syngas unit cost responded to variations in a baseline set of
assumptions regarding equipment, feedstock, labor, general
expense, and equity. The results of the sensitivity analysis of
a microscale gasification facility run at 60 Nm3 h1 are
shown as figure 8. The results show that the syngas unit cost
was most sensitive to variation in labor and equipment costs.
Variations in interest rate, feedstock price, general expense,
and equity had similar influences on syngas unit cost but were
not as dramatic. This means that labor cost and equipment
purchase cost had the greatest influence on syngas unit cost
at this production capacity. Even small variations in the pay
rate of operators or equipment purchase cost might cause
changes in syngas unit cost. Although automatic control
systems may reduce the need for hourly work by an operator,
this cost saving may be counterbalanced by higher equipment
purchase cost.
The results of the sensitivity analysis for an 1800 Nm3 h1
microscale gasification facility are shown in figure 9. The
results show that the syngas unit cost was most sensitive to
variation in equipment cost, following by feedstock price,
labor cost, and loan interest rate. Variations in general
expense and equity also affected syngas unit cost. The results
indicate that variations in equipment purchase cost, pay rate
of operators, feedstock price, and loan interest rate cause
significant changes in syngas unit cost. Minimizing these
costs is therefore important for improving the economic
feasibility of 1800 Nm3 h1 capacity microscale gasification
facilities.

Vol. 52(5): 1649-1659

Figure 9. Syngas unit costs response to variations in different cost factors

for an 1800 Nm3 h1 facility.

CONCLUSIONS
The results of this study led to the following conclusions:
The cost analysis model developed in this study proved to
be an effective tool for analyzing syngas production cost and
cost composition for microscale biomass gasification
facilities. It will improve with future research and refinements.
Syngas unit cost and energy cost of a microscale
gasification facility were significantly affected by the
facility's production capacity. As the capacity increased, the
total annual production cost increased, while the unit cost and
energy cost significantly decreased.
Operating cost was the major part of total annual syngas
production cost. Labor cost was the largest part of operating
cost for the lower end of the microscale gasification capacity
range tested (60 Nm3 h1), while feedstock became the largest
cost at the high end of the capacity range (1800 Nm3 h1). An
effective way to reduce the percentage of labor cost in the
annual production costs is to run the facility at higher
production capacity.
The unit cost of syngas and the energy cost for a 60 Nm3
1
h gasification facility in Mississippi were $0.55 Nm3 and
$0.10 MJ1, respectively, which were higher than the
$0.357Nm 3 and $0.009 MJ1 average natural gas retail
prices in the U.S. during the fourth quarter of 2008. In a
highercapacity facility, the syngas unit cost and energy cost
decreased significantly. The unit cost of syngas would be
lower than the market price of natural gas if the capacity level
was higher than 100 Nm3 h1, but the $0.012 MJ1 syngas
energy cost at 1800 Nm3 h1 capacity was still higher than the
natural gas energy cost.
The syngas unit cost for a microscale gasification facility
at 60 Nm3 h1 was most sensitive to variation in labor cost,
followed by equipment cost. On the other hand, the syngas
unit cost for an 1800 Nm3 h1 facility was most sensitive to
variation in equipment cost, followed by feedstock price,
labor cost, and loan interest rate. Variations in equipment
purchase cost, pay rate of operators, feedstock price, and loan
interest rate also affect syngas unit cost. Addressing these
latter cost factors would be helpful in improving the

1657

economics of operating highercapacity (>1800 Nm3 h1)

microscale gasification facilities.
ACKNOWLEDGEMENTS
This study was supported by the Sustainable Energy
Research Center and the Mississippi Agricultural and
Forestry Experiment Station at Mississippi State University
with funds provided by the U.S. Department of Energy
(Award No. DEFG3606GO86025). Hardwood chips for the
gasification experiments were generously provided by
Domtar Paper Co., LLC, through Mr. Chad Robertson. All
this support is gratefully appreciated.

REFERENCES
Amos, W. A. 1998. Analysis of two biomass gasification/fuel cell
scenarios for smallscale power generation. Report No.
NREL/TP57025886. Golden, Colo.: NREL.
Badger, P. C. 2002. Processing cost analysis for biomass feedstocks.
Report No. ORNL/TM2002/199. Oak Ridge, Tenn.: ORNL.
Bain, R. L. 2000. Small modular biopower initiative phase: I.
Feasibility studies executive summaries. Report No.
NREL/TP57027592. Golden, Colo.: NREL.
Bain, R. L., W. P. Amos, M. Downing, and R. L. Perlack. 2003.
Biopower technical assessment: State of the industry and the
technology. Report No. NREL/TP51033123. Golden, Colo.:
NREL.
BLS. 2009. State occupational employment and wage estimates in
2007: Mississippi. Washington, D.C.: Department of Labor,
Bureau of Labor Statistics.
Ciferno, J. P., and J. J. Marano. 2002. Benchmarking biomass
Gasification technologies for fuels, chemicals, and hydrogen
production. Washington, D.C.: DOE, National Energy
Technology Laboratory.
Craig, K. R., and M. K. Mann. 1996. Cost and performance analysis
of biomassbased integrated gasification combinedcycle
(BIGCC) power system. Report No. NREL/TP43021657.
Golden, Colo.: NREL.
Dowaki, K., S. Mori, C. Fukushima, and N. Asai. 2005. A
comprehensive economic analysis of biomass gasification
systems. Electrical Eng. in Japan 153(3): 16701679.
EIA. 2009a. Average retail price of electricity to ultimate customers
by enduse sector, by state. Washington, D.C.: DOE, Energy
Information Administration. Available at:
www.eia.doe.gov/cneaf/electricity/epm/table5_6_a.html.
Accessed 10 January 2009.
EIA. 2009b. Mississippi natural gas price. Washington, D.C.: DOE,
Energy Information Administration. Available at:
http://tonto.eia.doe.gov/dnav/ng/ng_pri_sum_dcu_SMS_a.htm.
Accessed 2 January 2009.
Gallagher, G. J. 2002. Development of a smallscale biomass CHP
system. Report No. ETSU B/U1/00678. Cardiff, U.K.:
Sustainable Energy, Ltd.
Jenkins, C. 1997. A comment on the optimal sizing of biomass
utilization facility under constant and variable cost scaling.
Biomass and Bioenergy 13(1): l9.
Kumar, A., J. B. Cameron, and P. C. Flynn. 2003. Biomass power
cost and optimum plant size in western Canada. Biomass and
Bioenergy 24(6): 445464.
Larson, E. D. 1998. Smallscale gasificationbased biomass power
generation. Princeton, N. J.: Princeton University, Center for
Energy and Environmental Studies.
Larson, E. D., S. Consonni, R. E. Katofsky, K. Iisa, and W. J.
Frederick. 2006. A costbenefit assessment of gasificationbased
biorefining in the kraft pulp and paper industry. Report No.

1658

DEFC2604NT42260. Princeton, N. J.: Princeton University,

Princeton Environmental Institute.
MDA. 2009. Loan programs for energy efficiency. Jackson, Miss.:
Mississippi Development Authority. Available at:
www.mississippi.org/. Accessed 10 January 2009.
MDES. 2008. Occupational employment and wage estimates in
Mississippi. Jackson, Miss.: Mississippi Department of
Employment Security. Available at: www.mdes.ms.gov.
Accessed 12 April 2008.
Mississippi Mills. 2009. Tipping fee for Mississippi Mills residents.
Jackson, Miss.: Mississippi Mills. Available at:
www.mississippimills.ca/news.cfm?newsid=600. Accessed 12
January 2009.
Mitchell, C. P., A. V. Bridgewater, D. J. Stevens, A. J. Toft, and M.
P. Waters. 1995. Technologic assessment of biomass to energy.
Biomass and Bioenergy 9(5): 205226.
Purvis, C. R., and J. D. Craig. 1998. A smallscale biomass fueled
gas turbine power plant. Presented at BioEnergy '98: The 8th
Biennial National Bioenergy Conference.
Ringer, M., V. Putsche, and J. Scahill. 2006. Largescale pyrolysis
oil production: A technology assessment and economic analysis.
Report No. NREL/TP51037779. Golden, Colo.: NREL.
Rollins, M. L., L. Reardon, D. Nichols, P. Lee, M. Moore, M. Crim,
R. Luttrell, E. Hughes, and R. Rollins. 2002. Economic
evaluation of CO2 sequestration technologies: Task 4. Biomass
gasificationbased processing. Report No.
DEFC2600NT40937. Golden, Colo.: NREL.
Rutherford, J. 2006. Heat and power applications of advanced
biomass gasifiers in New Zealand's wood industry: A Chemical
equilibrium model and economic feasibility assessment. MS
thesis. Canterbury, New Zealand: University of Canterbury,
Department of Chemical Engineering.
Savola, T. 2007. Modeling biomassfueled smallscale CHP plants
for process synthesis optimization. Unpublished PhD diss.
Espoo, Finland: Helsinki University of Technology, Department
of Mechanical Engineering.
Stassen, H. E. 1995. Smallscale biomass gasifiers for heat and
power. Tech. Paper No. 296. Washington, D.C.: The World
Bank, the International Bank for Reconstruction and
Development.
Stevens, D. J. 2001. Hot gas conditioning: Recent progress with
largerscale biomass gasification system: Update and summary of
recent progress. Paper No. RS51029952. Golden, Colo.: NREL.
Tsamba, A. J. 2001. Biomass gasification for sustainable
development. Maputo, Mozambique: University of Eduardo
Mondlane, Dept of Chemical Engineering.
Turton, R., R. C. Bailie, W. B. Whiting, and J. A. Shaeiwitz. 1998.
Analysis, Synthesis, and Design of Chemical Processing. Upper
Saddle River, N. J.: Prentice Hall.
ValleRiestra, J. F. 1983. Project Evaluation in the Chemical
Process Industries. New York, N.Y.: McGrawHill.
Walsh, M. 1998. U.S. bioenergy crop economic analysis: Status and
needs. Biomass and Bioenergy 14(4): 341350.
Walsh, M. E., R. L. Perlack, A. Turhollow, D. T. Ugarte, D. A.
Becker, R. L. Graham, S. E. Slinsky, and D. E. Ray, 2000.
Biomass feedstock availability in the United States. Oak Ridge,
Tenn.: ORNL.
Walt, R. R. 2004. The BioMax: A new biopower option for
distributed generation and CHP. Paper No. 04GM0710. New
York, N.Y.: IEEE PES Conference.
Wei, L., L. O. Pordesimo, C. W. Herndon, and W. D. Batchelor.
2008. Cost analysis of microscale biomass gasification facilities
through mathematical modeling. ASABE Paper No. 084424. St.
Joseph, Mich.: ASABE.
Wei, L., J. A. Thomasson, R. M. Bricka, W. D. Batchelor, E. P.
Columbus, and J. R. Wooten. 2009a. Syngas quality evaluation
for biomass gasification with a downdraft gasifier. Trans.
ASABE 52(1): 2137.

TRANSACTIONS OF THE ASABE

Wei, L., L. O. Pordesimo, C. Igathinathane, and W. D. Batchelor.

2009b. Process engineering evaluation of ethanol production
from wood through bioprocessing and chemical catalysis.
Biomass and Bioenergy 33(2): 255266.
Williams, R. 2005. Technology assessment for biomass power
generation: Summary report on economic analyses. Paper No.
50000034. Davis, Cal.: University of California, Department
of Biological and Agricultural Engineering.

NOMENCLATURE
CAC = annual capital cost ($)
CAinstr = annual loan interest cost ($)
CAO = annual operating cost ($)
Cc
= subcapital cost for the facility ($)
Ccon = construction cost ($)
Ccontig = contingency for the facility ($)
Ceq = total of equipment purchase cost ($)
Cex
= purchase cost of existing gasifier ($)
Cgen = general expense for operating the facility ($)
Cup = unit cost of syngas production ($)
exp = scaleup exponent for new gasifier
Faux = auxiliary cost factor
Fbud = building cost factor
Fctax = property tax cost factor
Finsta = equipment installation cost factor

Vol. 52(5): 1649-1659

Finsu
Fovh
Ftst
Ho
m
Pc,new

= property insurance cost factor

= construction overhead cost factor
= equipment test run cost factor
= gasifier actual operating hours (h)
= number of employees
= production capacity of the gasifier in a new
facility (Nm3 h1)
Pc_ex = production capacity of existing gasifier
(Nm3 h1)
Pel
= price of electricity ($ kW1)
Pfesto = price of feedstock ($ ton1)
Pwa = price of water ($ m3)
Pwast = price of waste treatment ($ ton1)
Rcontig = ratio of contingency for the facility
Rdec = depreciation rate of construction cost
Rdee = depreciation rate of equipment purchase cost
RFICA = pay rate of FICA (federal insurance contribution
act)
Rgen = ratio of general expense for operating the facility
Rintr = loan annual interest rate
Rlabo = pay rates of employees
Rloan = ratio of loan to the facility total capital cost
Rrepa = repairing rate of equipment
s
= number of biomass feedstock species
Vwa = annual water consumption volume (m3)
Wfesto = annual feedstock consumption (ton)
Wwast = weight of waste produced (ton)

1659

1660

TRANSACTIONS OF THE ASABE