Delivered cost of switchgrass pellets transported from depots to a biorefinery in the Piedmont, <scp>USA</scp>

Abstract The southeast region of the USA has the potential to be a significant producer of biobased products; however, research is needed to demonstrate the most cost‐effective feedstock delivery system. This study considers a distributed network of five pellet depots to supply feedstock (i.e., switchgrass pellets) for the operation of a hypothetical biorefinery located near South Boston, VA, USA. The study was divided into four main categories: (1) feedstock delivery from satellite storage locations (SSLs) to the pellet depots; (2) pellet production at the depots; (3) pellet storage at the depots, and (4) pellet delivery to the biorefinery to supply a continuous operation 24 h per day, 7 days per week, and 48 weeks per year. The cost analysis begins with round bales in SSLs and ends when a load of pellets arrives at the biorefinery. This study does not include a farmgate payment to grow, harvest, and store round bales in SSLs, and it also does not include receiving facility operations at the biorefinery. The weighted average cost for annual delivery to the biorefinery from the five depots was USD 129.32 per Mg pellets. The division of this cost was 51% feedstock delivery, 38% pelleting, 2% pellet storage, and 9% pellet delivery. The cost for the smallest depot was USD 145.37 per Mg pellets, in comparison with USD 115.22 per Mg pellets for the largest depot. These results indicate an economy‐of‐scale influence; there was a 21% reduction in cost as the depot size increased from 66 450 to 140 430 Mg pellets per year.