Valuing a Biofuels Venture: free downloadable tool

In Florida, Biofuels Digest released a revised 1.0 (beta) version of its Biofuels Venture Valuation tool, for use and comment.

Using the tool, biofuels venture developers can, by inputting a few keystrokes, calculate a value for the proposed venture, and return rate on invested capital, as well as compare the value of the venture to basic business cases for corn ethanol, sugarcane ethanol, cellulosic ethanol and advanced biofuels projects.

Download the free biofuels valuation tool here.

The tool looks at project opex and capex, feedstock cost, feedstock yields, fuel price, speed to market, and cost of capital among other factors.

Details on revisions in the 1.0 beta

We have made a number of revisions based on responses from readers – thank you, one and all, for your feedback.

1. We revised costs for cellulosic biomass to $55 per ton, from $45 – we had some skepticism that, broadly speaking, the $45 per ton figure would hold up.

2. We revised the yields for sugarcane ethanol to 20 gallons per ton.

3. We increased the co-product value for corn ethanol to $160 per ton, to match the biomass cost.

4. We reduced the opex for renewable diesel to $0.75 per gallon, based on reader feedback.

5. We added an initial case for pyrolysis-based technologies, based on inputs we had from readers, the 50 Hottest Companies in Bioenergy data book, and other business cases we sourced.

6. We added an initial case for open-pond algal biofuels technologies, based on inputs we had from readers, the 50 Hottest Companies in Bioenergy data book, and other business cases we sourced.

7. We revised the blended cost of capital for advanced bioenergy projects to 15 percent – reflecting a 70/30 mix of debt at 9 percent and equity at 30 percent. The 9 percent debt figure is based on  a blend of guaranteed and non-guaranteed portions.

A note on values and cases.

We developed this as a quick means for a project developer to test a proposed technology business case against generally-accepted values for other technologies. We did not develop this as a “for all time, Moses from the mountain” statement on the capex and opex of every biofuels technology out there. Plenty of projects keep their figures under very tight wraps, and its a fast-moving industry in any case. Please use the alternative cases carefully. People who have different figures for their project – well, use that “New Case” column to put your own figures in, by all means.

“Let’s make sure we say this about a hundred times – beta release! – work in progress!” said Digest editor Jim Lane. “I developed this tool a few weeks back to help myself do some value comparisons – why not share in order to share knowledge and improve the default input values? While project developers have a lot of sophisticated tools at hand, this tool should add convenience for all, and some computational power for those who don’t have more the more sophisticated tool sets.”

Feedback welcome

The Digest continues to warmly welcome feedback on default values assigned to given technologies, as well as alternative cases for technologies, fuels and feedstocks we did not include in this beta release.