ECONOMIC EVALUATION WITH REAL OPTIONS: SECOND GENERATION BIOETHANOL BIOREFINERY IN VERACRUZ, MEXICO

First generation bioethanol production in Mexico could have disadvantages, since some prime materials would come from food crops such as maize and sugarcane, causing instability in prices and market shortage. Second generation bioethanol could be a good solution to have fuels that are less pollutant, in a sustainable manner. The objective of this study was to evaluate the economic feasibility, with real options, of a biorefinery that will produce bioethanol from sugarcane wastes, and which is supposed to be located next to the largest sugar factory in the state of Veracruz. It is estimated that the biorefinery will have an annual capacity of 143 million liters and a total investment for the project of 308 million dollars. The real option of abandoning the project was used, for 5, 10, 15, 20 and 25 years, and traditional evaluation for 30 years. The results indicate that the biorefinery would have a net present value of 27.3 million dollars until year 20, and a net present value of 61.1 million dollars for year 30. The price of bioethanol is the variable that affects most the profitability of a biorefinery of this type.