Modular Production: Co-locating Plant and Feedstock

As biodiesel production trends more toward smaller-scale units and variable feedstock supplies, the idea of using smaller sized modular production units placed very close to feedstock sources becomes more attractive. Biodiesel Magazine spoke with modular unit manufacturers to learn more about this emerging arm of the industry.
By Kris Bevill | April 15, 2009
Aside from the economy, size and feedstock are probably the two largest issues keeping biodiesel producers awake at night. Large plants aren't doing well and small plants don't make very much fuel. And no matter what feedstock you choose to go with, it seems like the price goes up. Versatility has become the name of the game and many traditional facilities just don't cut it anymore. USFuelTech LLC president and CEO Robert Horning says, "There are plenty of 100 MMgy biodiesel plants out there in the Midwest, but they've all got crickets jumping through them right now because they're not producing." Horning oversees the manufacturing of biodiesel production modules with a capacity between 2 MMgy and 5 MMgy, and he believes this is the direction the U.S. industry is headed. "There just are not many places in the world left for a 100 MMgy plant there's not enough feedstock," he says. The large plants "are like dinosaurs," Horning says. "They're just sitting there rusting."

While the need for large production facilities in the current U.S. market is rather nonexistent, there continues to be interest in producing biodiesel. So what is a potential producer to do?

Manufacturers of modular biodiesel production units believe they might have the answer. Their products are smaller and can be scaled up to various sizes when needed, plus they usually can be co-located with the feedstock source. They're less of an investment than a larger facility, obviously, and many are capable of running multiple feedstocks right out of the box.

The fundamentals of modular production units are fairly universal. Each unit is built at a manufacturing facility before being skid-mounted and delivered to its destination. Most, containerized units range in capacity from 1 MMgy to 5 Mmgy and can be linked together from the start to increase overall capacity although the general idea is to start small and expand as needed. Typically the feedstock supply just doesn't warrant a large facility, in which case those situations are ideal for modular units.

Europeans have been enjoying the benefits of modular biodiesel production for years. Sweden-based Ageratec AB began manufacturing small modules in 1996 and has since been responsible for the installation of more than 70 processors in 20-plus countries. The company produces biodiesel processors ranging in capacity from 180,000 gallons per year to 2.15 MMgy. While most of the company's units are sold in Sweden, Poland and Australia, there is a growing demand for their product in the U.S., Canada and Latin America. Seattle-based engineering firm E3 Energy Partners LLC became Ageratec's North American engineering partner last fall. E3 principles, Richard Bacigalupi and Daniel Parker, say they became interested in working with Ageratec after working on larger biodiesel projects. "We started noticing that sizes were trending downward below 10 MMgy, so we decided to look on the market for a modular system rather than custom design our own," says Parker. "We discovered Ageratec and realized their technology is very similar to what we would design if we were doing it ourselves." E3 contacted Ageratec and now serves as either the primary or supporting engineer on all of the company's U.S. projects, and is currently modifying its processors with technology updates available later this year.

Feedstock options
Most of the modular unit inquiries E3 receives are from companies that have located a source of feedstock and are looking to capitalize on its potential. Bacigalupi says more than 100 different oils and fats have been tested on Ageratec units and, by the end of the year, additional technology is expected to be added, which will make them capable of processing feedstocks containing very high free fatty acid (FFA) percentages in some cases above 70 percent. It was Ageratec's goal to design one unit capable of handling a wide array of feedstocks, says Bacigalupi, and because its systems are fully-automated, all it takes is a change of recipe to switch from one feedstock to another. The move to incorporate higher FFA feedstocks is an important step to take as Bacigalupi predicts Ageratec's future purpose will be to service large food and animal processing groups, restaurants and even ethanol producers. "The people expressing interest in the units have a level of savvy that goes beyond an introductory entrepreneur," he says. "The clients that we're developing projects for now are existing corporations that have access to the feedstock either as a primary or ancillary part of their business." For example, ethanol producers are becoming more interested in producing biodiesel from their leftover corn oil. They'd like to sell the corn oil to local biodiesel processors, but many can't handle the oil's high FFA content. "So the ethanol companies are looking at putting in their own on-site unit, just dropping one in," he explains. "If you're running a 50 or a 100 MMgy ethanol plant you can certainly run a 1 to 3 MMgy biodiesel plant on extracted corn oil, no problem."

Not all potential modular producers possess that level of experience though. USFuelTech CEO Horning says he receives many calls from beginners. ""The problem with some of these small units is that some people have never done it before, and they want to be green and change the world. We sell an industrial system. It's not a home system. And that's probably the level of expertise that some of these guys have," he says. USFuelTech's 5 MMgy processing unit is its best seller, according to Horning, and each system is designed to take in a variety of feedstocks on a continual basis. Horning says, "That is where I believe the market is. You have to be able to take advantage of the market place on a weekly basis and that's where I see our market niche." He offers the example of one USFuelTech client who used chicken fat, yellow grease and virgin soy oil in a three-week period because the client located the modular unit in an area with easy access to a variety of feedstocks. Having access to feedstocks within a short distance is a major benefit and, along with their size, is a good reason why modular systems are becoming more popular.

BioFuelBox Corp. vice president of marketing Rick Reddy agrees that feedstock should dictate the location of a production unit, and says that price is really the deciding factor in what feedstock to use. The California manufacturer is banking on the use of brown grease to fuel its entry into the modular biodiesel market, so the location BioFuelBox deems ideal will naturally differ from other module manufacturing companies. "When we say we're doing brown grease, it's 100 percent brown grease," says Reddy. Because brown grease in significant quantities for biodiesel production limited and contain such large volumes of water, BioFuelBox is focused on locating its production units near wastewater treatment plants, landfills, or other similar locales. Besides manufacturing the units, the company also functions as owner/operator, so it only needs to find willing partners. "Our partners don't necessarily want to produce biodiesel," Reddy says. "But they do want to get rid of a waste product." He predicts future partners will have "captive feedstock" and won't have to worry about competing with other producers to get a good price on the initial product.

Getting feedstock costs under control is a great selling point, but what about other operating costs? The price to purchase and begin producing biodiesel from a modular unit varies wildly depending on the manufacturer and size of the unit. It's important for potential producers to define what comes in the crate while determining an estimated cost per unit, according to Bacigalupi. The No. 1 problem we see as people evaluate modular biodiesel solutions today is the lack of true turn-key processor solutions," he says. "There's always more to the story in terms of add-on processes such as high FFA pretreatment or methanol recovery, and they're not sure what they're buying into." Bacigalupi says Ageratec has built their business on offering all-inclusive units that leave nothing hanging. FFA pretreatment, heating and energy integration systems, controls, purification systems and methanol recovery systems are included in each unit and are fully-automated so production can be supervised from anywhere in the world with Internet access. The initial cost of an Ageratec system might be a little more than other units, but those costs are easily recouped by complete process integration and lower long-term operating costs, according to Bacigalupi.

Horning says USFuelTech's systems vary in price, but he says "you ought to have a million bucks in your pocket" if you plan to purchase one of his 5 MMgy modules. His units can also be fully-automated, but that is not a standard option.

Reddy prefers not to discuss pricing options for BioFuelBox's units because the company plans to own/operate each facility it sets up. The producer only needs feedstock suppliers, he says, so the cost of operating one of their systems is not a factor.

As the biodiesel industry adapts to produce fuel using different methods and different feedstocks, the use of modular units will likely expand. One only needs to look to Europe to witness how the utilization of smaller production units using various feedstocks can supply an area with biodiesel. The future of biodiesel production worldwide is unsure, but the future of modular units appears fairly secure.

Kris Bevill is the editor of Ethanol Producer Magazine. Reach her at or (701) 373-8044.
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