Download - Biomass Magazine - February 2009

INSIDE: TORREFACTION ON THE BRINK OF COMMERCIAL DEBUT

February 2009

www.BiomassMagazine.com

Distributed Power in Dairy Country America’s Dairy Cows are Doing Their Part to Generate Renewable Energy

WhirligigThe New Standard for Shaft Speed Monitoring!

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M800SpeedswitchSimple, Versatile and Reliable Underspeed Protection!

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Transforming corn and other grains into biofuels is a major industry

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4 BIOMASS MAGAZINE 2|2009

2|2009 BIOMASS MAGAZINE 5

INSIDE FEBRUARY 2009 VOLUME 3 ISSUE 2

FEATURES. . . . . . . . . . . . . . . . . . . . .

24 ANAEROBIC DIGESTION From Digestion to Distribution Power companies and dairy farmers are working together to fi nd ways to raise funds for anaerobic digesters and the means to distribute the energy that’s produced. By Ryan C. Christiansen

30 TECHNOLOGY A ‘Torrefi c’ Energy Solution Torrefaction is on the brink of commercialization. The technology will be used to turn biomass into a fuel that is easier to transport and store, and is carbon neutral.By Anna Austin

36 MARKET Closing the Wood Pellet Gap The U.S. could learn something from Europe when it comes to the use of wood pellets in commercial and utility applications.By Ron Kotrba

42 FINANCE Project Finance: Lender Perspectives and Development TrendsWhile much of the world is in the midst of an economic slowdown, credit markets are still supporting biomass-to-energy projects.By Thomas M. Minnich

46 PROCESS Anaerobic Options The positive environmental impacts and easy scalability of anaerobic digesters make them a wise choice for small-scale waste reduction and energy production projects.By Barnett Koven

TECHNOLOGY | PAGE 30

DEPARTMENTS. . . . . . . . . . . . . . . . . . . . .

07 Advertiser Index

08 Editor’s NoteMaking a Mountain of BiomassOut of a SnowbankBy Rona Johnson

10 CITIES Corner

Hoping for the Best of TimesBy Tim Portz

11 Legal Perspectives Algae Bloom at the Patent Offi ceBy Philip Goldman and Todd Taylor

15 Industry Events

16 Business Briefs

18 Industry News

51 EERC UpdateBiofuels Sustainability: A Nonfood Feedstock PrimerBy Brad Stevens

52 Marketplace

Correction from our November 2008 issue:On page 52 of the Process contribution titled “Producing the Next Generation of Green Hydrocarbons,” the U.S. DOE’s Biomass Program Web site should read http://www1.eere.gov/biomass.


advertiserINDEX

2009 Canadian Renewable Energy Workshop 9

2009 Fuel Ethanol Workshop 14

2009 International BIOMASS 12 & 13 Conference & Expo

2009 RETECH Conference 6

2010 National Ethanol Conference 29

4B Components Ltd. 2

Action Unloaders 34

Agra Industries 26

Barr-Rosin 27

BBI Bioenergy Australasia Magazine 35

BBI Engineering & Consulting 54

BBI International Community Initiative To 55Improve Energy Sustainability (CITIES)

Bioenergy Canada Magazine 50

Christianson & Associates PLLP 40

Continental Biomass Industries 4

Detroit Stoker Company 45

Duratech Industries International Inc. 28

Ethanol Producer Magazine 53

www.ethanol-jobs.com 41

Jansen Combustion & Boiler Technologies Inc. 49

Jeffrey Rader Corporation 33

Laidig Systems, Inc. 39

Mid-South Engineering Company 38

Novozymes 3

Price BIOstock Services 48

R.C. Costello & Associates Inc. 44

Robert-James Sales Inc. 56

West Salem Machinery Co. 32

EDITORIAL

MANAGING EDITOR Jessica Sobolik [email protected]

CONTRIBUTIONS EDITOR Dave Nilles [email protected]

FEATURES EDITOR Rona Johnson [email protected]

SENIOR STAFF WRITER Ron Kotrba [email protected]

STAFF WRITERSJerry W. Kram [email protected] Retka Schill [email protected] Bevill [email protected] Erin Voegele [email protected] Austin [email protected] C. Christiansen [email protected]

STAFF WRITER & PLANT LIST MANAGERBryan Sims [email protected]

ONLINE EDITOR Hope Deutscher [email protected]

COPY EDITOR Jan Tellmann [email protected]

E-MEDIA COORDINATORMegan Skauge [email protected]

ART

ART DIRECTOR Jaci Satterlund [email protected]

GRAPHIC DESIGNERSElizabeth Slavens [email protected] Melquist [email protected] Sitter [email protected]

PUBLISHING & SALES

PUBLISHER & CEO Mike Bryan [email protected]

PUBLISHER & PRESIDENT Kathy Bryan [email protected]

VICE PRESIDENT OF MEDIA & EVENTS Joe Bryan [email protected]

VICE PRESIDENT OF COMMUNICATIONS Tom Bryan [email protected]

SALES DIRECTOR Matthew Spoor [email protected]

SALES MANAGER, MEDIA & EVENTSHoward Brockhouse [email protected]

ACCOUNT MANAGERSClay Moore [email protected] Hanson [email protected] Shereck [email protected] Charles [email protected] Steen [email protected] Brown [email protected]

ADVERTISING COORDINATOR Marla DeFoe [email protected]

SUBSCRIPTION MANAGER Jessica Beaudry [email protected]

SUBSCRIBER ACQUISITON MANAGER Jason Smith [email protected]

ADMINISTRATIVE ASSISTANT, SALES Christie Anderson [email protected]

RECEPTIONIST Nicole Zambo [email protected]

Subscriptions Subscriptions to Biomass Magazine are available for just $24.95 per year within the Unit-ed States, $39.95 for Canada and Mexico, and $49.95 for any country outside North America. Subscription forms are available online (www.BiomassMagazine.com), by mail or by fax. If you have questions, please contact Jessica Beaudry at (701) 746-8385 or [email protected].

Back Issues & Reprints Select back issues are available for $3.95 each, plus shipping. To place an order, con-tact Subscriptions at (701) 746-8385 or [email protected]. Article reprints are also avail-able for a fee. For more informa-tion, contact Christie Anderson at (701) 746-8385 or [email protected].

Advertising Biomass Magazine pro-vides a specifi c topic delivered to a highly targeted audience. We are committed to editorial excellence and high-quality print production. To fi nd out more about Biomass Magazine advertising opportunities or to receive our Editorial Calendar & Rate Card, please contact Howard Brockhouse at (701) 746-8385 or [email protected].

Letters to the Editor We welcome let-ters to the editor. Send to Biomass Magazine Letters to the Editor, 308 2nd Ave. N., Suite 304, Grand Forks, ND 58203 or e-mail to [email protected]. Please include your name, address and phone num-ber. Letters may be edited for clarity and/or space.

Cert no. SCS-COC-00648


Making a Mountain of Biomass Out of a Snowbank

s I look out my offi ce window on a dull, dreary Tues-day afternoon, I’ve observed several grain trucks full of snow rolling down the street. As you may have heard, North Dakota has had record snowfall

this year, receiving more than 30 inches of the white pow-der. It’s gotten to the point here in Grand Forks, N.D., where there aren’t enough places in town left to pile the snow without causing hazardous driving conditions.

At times like this, when I wonder what we could do to take advantage of all this snow before it melts and runs into the Red River, which forms the border between North Dakota and Minnesota. In a way, snow is like biomass. Just like switch-grass, which has to be mowed, snow has to be shoveled, and like municipal solid waste, people pay to have it removed.

Unfortunately, that’s where the similarities end. The defi nition for biomass says it has to be living or recently dead biological matter that can be used as fuel for industrial production. OK, maybe snow can’t be used directly as a fuel for industrial production, but in some areas of the country, it melts and runs into rivers and streams that are dammed for hydropower. I know I’m making a huge leap here.

On the other hand, like biomass, snow is renewable because when it melts in the spring, it increases soil moisture and raises aquifer levels. That water, in turn, is used in crop produc-tion, factories, municipalities and homes. I think we can safely say that having snow cover in the winter is a good thing in the Midwest, especially if it was dry going into the fall. However, it wasn’t dry going into this fall, and already the news media is using the “f” word, which, of course, stands for fl ood. Snow also comes in handy if your water pipes freeze up in the winter. You can just go outside, collect some snow and boil it for drinking water.

I looked up “snow biomass” on the Internet and unfortunately couldn’t fi nd anything to sup-port my claim. I did, however, fi nd some information about biomass in snow, and snow algae. Both were in reference to snow cover on the Tateyama Mountains in Japan.

After my short search, I concluded that I am either way ahead of the scientifi c curve when it comes to identifying biomass, or I’ve just spent way too much time in subzero temperatures shoveling snow.

A

Rona JohnsonFeatures Editor

[email protected]

editor’sNOTE

The 2009 Canadian Renewable Energy Workshop2009 Canadian Renewable Energy Workshop is the first stop on the path to optimizing your strengths and realizing your renewable energy ambitions. Attendees will enjoy world-class presentations at the only conference in Canada that combines emerging biofuels and biomass power in one.

LEARN MOREWeb: www.crew2009.com

Phone: (888) 501-0224 Canada Wide (519) 576-4500 US and International

E-Mail: [email protected]

Join us March 10-12, 2009 at the Regina Inn to…• Discover energy opportunities to supplement natural gas and electrical bills;

• Utilize promising future feedstocks including wood, algae, waste, cellulose, and more;

• Interact with industry professionals to build your bioenergy network.

To engage in a business opportunity with the CREW please contact Lionel Grant at [email protected]

Register now: www.crew2009.com

2nd Annual | March 10 – 12, 2009 | Regina Inn Hotel and Conference Centre | Regina, Saskatchewan

Knowledge, Technology & Connections


CITIESc o r n e r

t was the best of times, it was the worst of times, it was the age of wis-dom, it was the age of foolishness …” The opening line of Charles

Dickens’ “A Tale of Two Cities” goes through my head whenever I think about the current state of the renewable energy industry.

Anyone who wants to fi nd bad news in our in-dustry (or any other industry in the world), doesn’t have to look far. An incredibly tight credit market has tabled or outright foiled many good initiatives and projects. Volatile corn prices coupled with downward trending ethanol prices have forced some producers to seek Chapter 11 protection. Throw in a well-funded propaganda campaign sug-gesting that the ethanol industry is responsible for world deforestation and high food prices and the picture looks bleak. I remember hearing about de-forestation when I was in grade school in the early 80’s—long before the development of the ethanol industry—but today it’s suddenly all being blamed on ethanol. In an economy peppered with hard-luck stories our industry has taken its share of lumps in 2008.

That being said, whenever things look bleak—and I’ve heard talking head after talking head be-moan the death of the innovative spirit, or our col-lective inability to really address the energy crisis in our country—I take solace in the many renewable energy conferences I have attended.

I invite anyone who needs a strong dose of op-timism to choose a renewable energy conference, sign up and attend. I’ve had the privilege of be-ing surrounded by many “glass is half-full” types at

renewable energy conferences. If you haven’t, I’ll tell you why it’s so uplifting. There are many, highly intelligent people in our country developing renewable, clean energy, and it feels good to hear them talk about it.

I remember the times I’ve listened to Steve Flick of Show Me Energy Co-op in Centerview, Mo., talk about his pellet cooperative. The cooperative is provid-ing quality, renewable, clean energy pellets to a Mis-souri utility and delivering a profi t to its members. He always ends his presentation by saying “this is about our kids and our country.” His optimism and hope is infectious.

I also think about Jerry Jennisen of JerLin Farms in Brooten, Minn., who ventured into the world of anaerobic digestion on his dairy opera-tion because he thought it was the right thing to do. In addition to running a full-time dairy operation, Jennisen takes time to share his experiences with anyone who’s interested.

I don’t have a crystal ball, so what’s going to happen in 2009 will remain a mystery until Jan. 1, 2010. However, because the Jennisens and Flicks of this world are out there, I have a feeling that we may be on the verge of the best of times.

Tim Portz is a business developer with BBI In-ternational’s Community Initiative to Improve Energy Sustainability. Reach him at [email protected] or (651) 398-9154.

“IHoping for the Best of Times


LEGALperspectives

lgae may have fi nally arrived if the rising number of patent ap-plications for algae technologies is any indication. The growth in

algae has been spurred by its potential to provide an abundant and sustainable feed-stock for fuels, biomaterials, feed and other products. Major investments in algae tech-nologies have been made by the U.S. gov-ernment, research universities and venture capital fi rms, driving algae from a backwa-ter topic a few years ago to a major player today.

In 1988, there were only four interna-tional patent applications published having the word “algae” in their abstract, as com-pared to 37 in 1998 and more than 90 dur-ing 2008. Similarly, only three U.S. patents were issued in 1988 containing the words “algae” and “bioreactor” somewhere in their text, as compared to 22 in 1998 and 51 in 2008.

This can mean longer processing times and higher costs because all these new fi l-ings in a fi eld that was previously uneventful add to the inevitable backlog that exists in the course of getting patent applications to the point of actually being examined and is-sued. For instance, a new “art unit” dealing with chemical separation and purifi cation (including algae bioreactors) was recently formed in the U.S. Patent and Trademark Offi ce in order to coalesce what had been several different examination groups.

Though this reorganization might make sense in the long run, the immediate result will likely further delay the examination of new applications concerned with algae and similar technologies.

Bioreactors, algae strains, open pond designs, and harvesting, separation and processing equipment are among the things being patented in the world of algae. In-deed, one can potentially patent a variety of things, living and non-living, and from a variety of perspectives. It is important to realize that you might be able to patent more than you think. For instance, were an inventor to develop a new bioreactor-based method of growing algae, he or she would be wise to consider claiming as his or her invention not only the method itself, but also equipment that might need to be cus-tomized in order to perform the method, as well as novel intermediates or reagents that might arise. The inventor could also claim the resulting algae biomass, per se, as well as downstream products that might be derived from or based upon such biomass—all in the course of a single application.

Here are some strategies you need to consider: First, fi le early and often. There are more advantages than disadvantages in being fi rst to the patent offi ce, and it is far easier to later let an application go than to kick yourself for not having fi led at all. You can use the long examination backlog to your advantage by deciding whether the ap-

plication you fi rst fi led is indeed still worthy of time and effort.

Expedite patent examination when necessary. There is generally no urgency to getting a patent issued, unless of course to attract investors or pursue infringers. Yet there are ways in which the inevitable lag time in the patent process can be curtailed from on the order of several years to on the order of several months or more.

Don’t assume that your product or pro-cess could not be patentable. While the fi nal steps in solving a technical problem can of-ten seem obvious and unpatentable to the inventor, a good patent attorney can often help look at the overall problem that initial-ly existed in order to fi nd ways in which the eventual solution can indeed be considered inventive and potentially patented.

Having strong patent protection is a key to attracting investors and ultimately helping establish and protecting your place in the competitive environment. Do it right, and you could grow as fast as an algae bloom. BIO

Phil Goldman is a shareholder at Fredrik-son & Byron, focusing on intellectual prop-erty matters through the life sciences. Reach him at [email protected] or (612) 492-7088. Todd Taylor is a shareholder in Fredrikson & Byron’s corporate, renewable energy, securities and emerging business groups. Reach him at [email protected] or (612) 492-7355.

A

Algae Bloom at the Patent Offi ceBy Philip Goldman and Todd Taylor

TaylorGoldman

REGISTRATION IS NOW OPENw w w . f u e l e t h a n o l w o r k s h o p . c o m

June 15 - 18, 2009Denver Convent ion Center | Denver, Colorado, USA

WHERE E THANOL’S NE W ERA BEGINSNo longer is the world of ethanol confined to grain . C el lu los ic ethanol and advanced biofuels are the future, and that future

star ts now. For a quar ter centur y, the Internat ional Fuel Ethanol Workshop & Expo has del ivered not only the largest ethanol event in the world , but the finest . Jo in the industry

this summer for the FE W ’s 25th Anniversar y in Denver. I t ’s where the ethanol industr y ’s new era begins.

industry events

BioPower Generation

Feb. 12-13, 2009Renaissance Brussels HotelBrussels, BelgiumThis second event will provide a platform for companies to learn about the latest trends and international developments in biomass power genera-tion. Agenda topics will include policy, fi nancing and investing, sustainable feedstocks, cofi ring, combined-heat-and-power plants, and gasifi cation, among others. A preconference seminar will detail how to build a biopower portfolio.+9714 813 5212www.greenpowerconferences.com/biofuelsmarkets/biopower.html

Plant Bio-Industrial Oils Workshop

Feb. 25-26, 2009Delta Bessborough HotelSaskatoon, SaskatchewanThis event will address bioenergy, bioproducts and biofuels, including bio-mass. International and local experts will give overviews of current and potential biobased applications and feedstocks from the perspectives of producers, breeders and businesses. Confi rmed speakers include repre-sentatives from DuPont Co. and the Donald Danforth Plant Science Center, among many others. (306) 975-1939 www.agwest.sk.ca/events/awbevents.php

Renewable Energy Technology Conference & Exhibition

Feb. 25-27, 2009Las Vegas Convention CenterLas VegasThis event includes a business conference, a trade show and several side events. The business conference will address the status and outlook of re-newable energy. Breakout sessions will address sustainability, feedstocks, fi nancing, ethanol production technology, biobased products, biopower and biorefi neries, among other topics.(805) 290-1338 www.retech2009.com

Canadian Renewable Energy Workshop

March 10-12, 2009Regina Inn Hotel and Conference CenterRegina, SaskatchewanThis second conference will facilitate the continued development of Cana-da’s renewable energy industry. Confi rmed speakers include Denis Arguin, vice president of engineering and implementation at Enerkem; Gerry Kut-ney, chief operating offi cer of Alterna Energy Inc.; and Rob Woodward, chief executive offi cer of Forest First, among many others. A complete agenda will be available as the event approaches.(888) 501-0224 www.crew2009.com

The Future of Biofuels

April 4-8, 2009Snowbird ResortSnowbird, UtahThe goal of this meeting, supported by DuPont Co., will be to share a broad perspective defi ning the critical needs for biofuels, and to highlight cutting-edge research and development efforts that are defi ning the next genera-tion of biofuel product and process advances. Agenda topics will include next-generation advanced biofuels, including cellulosic ethanol; and the feedstocks needed for those fuels.(800) 253-0685 www.keystonesymposia.org

International Biomass Conference & Expo

April 28-30, 2009 Oregon Convention CenterPortland, Ore.This event, sponsored by BBI International Inc., will focus on six major bio-mass sectors: crop waste, food processing residue, urban organic wastes, forest and wood processing residues, livestock and poultry wastes, and dedicated energy crops. Attendees will also be able to tour the Columbia Wastewater Treatment Plant, the Cornelius Summit Foods ethanol plant and the Beaverton Material Recovery Facility. A more detailed agenda will be available as the event approaches.(701) 746-8385 www.biomassconference.com

International Fuel Ethanol Workshop & Expo

June 15-18, 2009Denver Convention CenterDenverThis will mark the 25th anniversary of the world’s largest ethanol conference, which was recently recognized by Trade Show Week magazine as one of the fastest-growing events in the United States for the second consecutive year. The event will address conventional ethanol, next-generation ethanol and biomass. More details will be available as the event approaches.(701) 746-8385 www.2009few.com

European Biomass Conference & Exhibition

June 29-July 3, 2009CCH-Congress CenterHamburg, GermanyThis 17th annual event is expected to bring in more than 1,500 participants from more than 70 countries. Participants will learn about the latest break-throughs in the biomass fi eld. There will also be an exhibition featuring vari-ous companies and products in the industry. More information will be avail-able as the event approaches. +39 055-5002174 www.conference-biomass.com



business BRIEFS

Honeywell supplies technology to power plant, biofuel refi nery

Honeywell International Inc. announced that two Euro-pean facilities plan to install the company’s Experion Process Knowledge System, which streamlines output by allowing a fa-cility to unify process, production and business management. NSE Biofuels Oy Ltd. plans to use the system at its Varkaus, Finland-based research facility, where work will focus on the process of producing biofuels from wood residue. Meanwhile, Dutch energy company Nuon will install the system at its Mag-num plant, a 1,300-megawatt-per-hour combined-cycle power station under construction in Eemshaven, Netherlands. The facility, capable of using biomass, will supply electricity to ap-proximately 2 million homes. BIO

Metabolix cofounder receives awardCambridge, Mass.-based Metabolix Inc.

cofounder and Chief Scientifi c Offi cer Oliver Peoples received the 2008 Personal Contri-bution to Bioplastics Award during the 10th Annual Bioplastics Conference’s Bioplas-tics Awards ceremony in Munich, Germany. Peoples is credited with the development of Mirel, a family of biobased, sustainable and biodegradable plastics that will be marketed by Telles, a joint venture formed in 2007 by Metabolix and Ar-cher Daniels Midland Co. BIO

Syntec explores biomass-based chemicalsSyntec Biofuel Inc. launched a research program to develop

catalysts and processes to produce biobutanol and biopropanol from biomass. Based in Vancouver, British Columbia, Syntec boasts a yield of 110 gallons per ton from its proprietary cata-lysts that convert municipal solid waste and biomass into etha-nol, methanol and propanol. The company is seeking partners to help fi nance the estimated $2.5 million, three-year research and development program that will adapt the technology for biobutanol and biopropanol production. BIO

Canadian tissue manufacturer to install biomass gasifi cation system

Canadian tissue manufacturer Kruger Products Ltd. plans to install a biomass gasifi cation system at its tissue mill in New Westminster, British Columbia. Vancouver, British Columbia-based Nexterra Energy Corp. will supply the gasifi cation system, which will convert biomass into a clean-burning synthesis gas that will be used to offset the use of natural gas at the facil-ity. The system will take in local wood waste and allow Kruger Products to displace the use of approximately 445,000 gigajoules (400 million cubic feet) of natural gas annually, equivalent to the amount of natural gas needed to heat 3,500 Canadian homes for one year. Construction of the project is expected to begin in early 2009. BIO

Green Energy Resources continues seeking acquisition

New York-based Green Energy Resources Inc. is looking to upgrade its stock listing on the pink sheets via an acqui-sition. The move would create a fully reporting and audited company, according to a company spokesman. Green Energy Resources was reviewing two potential deals, but the results of those discussions weren’t available at press time. The debt-free company obtains wood supplies through sustainable practices, collecting recycled wood, wood from municipal maintenance operations and storm damage. It primarily exported wood chips and pellets to Europe, but recently began directing its supply toward the U.S. renewable energy market. BIO

Peoples

Ceres offers Blade energy crop seed varietiesCeres Inc. in Thousand Oaks, Calif., has begun selling

switchgrass and high-biomass sorghum seed under the Blade Energy Crops label, including two switchgrass varieties—EG 1101 and EG 1102—adapted for the southern and middle areas of the U.S. with high rainfall. Ceres’ two sorghum hybrids—ES 5200 and ES 5201—won’t produce grain heads until very late in the season, and will therefore continue growing and producing more biomass until early autumn. BIO


business BRIEFS

Helius Energy receives Scottish Green Energy award

U.K.-based Helius Energy PLC re-ceived a Scottish Green Energy award for the Best Environmental Initiative at the seventh annual Scottish Green Energy Awards in Edinburgh, Scotland, on Dec. 4. The award honored the company’s small-scale combined-heat-and-power biomass plant, which is being built under an agreement with The Combination of Rothes Distillers Ltd. in Morayshire, Scotland. BIO

WSM offers wood fi ber preparation systemWest Salem Machinery Co. is offering a wood fi ber prepara-

tion system that can mechanically densify 100 dry tons of wood fi ber per hour, including wood chips, sawdust and other forest product residuals. Equipment such as WSM’s wood fi ber system could help revitalize the U.S. wood biomass market, which RISI Inc. projected may be on the rise. In a Wood Biomass Market Report released in December, the global forest products infor-mation provider estimated that provisions included in the Emer-gency Economic Stabilization Act of 2008 could generate ap-proximately 120 million tons of wood demand, not to mention additional jobs. BIO

New Year starts off well for N-ViroN-Viro International Corp. formed a joint venture with

SouthSide Environmental Group LLC to build and operate an N-Viro Fuel manufacturing plant in Ohio, which will produce a coal substitute made from sewer sludge. The U.S. EPA recently qualifi ed N-Viro Fuel technology as an alternative energy source that can be used in commercial power generation, giving the company the opportunity to qualify for renewable energy incen-tives. The plant is expected to be complete in mid- to late 2009. N-Viro also announced a second purchase order agreement with the Tohopekaliga Water Authority in Daytona Beach, Fla., which will procure biosolids for the production of a soil amendment called N-Viro Soil. BIO

Chinese bio-oil plant to use Dynamotive technology

Dynamotive Energy Systems Corp. in Vancouver, British Columbia, announced it will receive $2.3 million for licensing its pyrolysis technology to Great China New Energy Technol-ogy Services Co. Ltd., which is building an 11.2 MMgy bio-oil plant in the Henan province of China for Hubei Xinda Bio-oil Technology Co. Ltd. Construction of the facility, which will convert corn stover to heating oil, is slated to take two years. Dynamotive plans to license its technology to 15 Chinese plants within fi ve years. BIO

DOE extends loan guarantee application dateExtensive interest in the U.S. DOE’s June 30 solicitation

for effi cient renewable energy and advanced transmission and distribution technologies prompted the DOE to extend its due date for applications from Dec. 31 to Feb. 26. This includes application due dates for stand-alone and manufacturing proj-ects, and Part I applications for large-scale integration projects. The April 30 deadline for Part II applications for large-scale integration projects is unchanged. For more information, visit www.lgprogram.energy.gov. BIO

West Salem Machinery’s wood fi ber preparation system can handle up to 100 dry tons of fi ber per hour.

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.Orient Green Power raises $55 millionIndia-based renewable energy company Orient Green

Power Ltd. announced it has raised $55 million in funding to establish and acquire power generation assets involving bio-mass, cogeneration, biogas and more. The company operates two 7.5-megawatt biomass plants in Tamil Nadu and Rajast-han, India, and is in the process of implementing a 7.5-meg-watt poultry-litter-fi red biomass power plant in Andra Pradesh, India. It plans to construct additional biomass power plants ranging from 7.5 to 10 megawatts in several Indian states. The company said it aims to build more than 500 megawatts in as-sets over the next fi ve years. BIO


industry NEWSIntrinergy boosts German, Belgian wood pellet markets

Low oil prices haven’t stalled growth in the European wood pellet markets, as evi-denced by new construction and expansion projects taken on by Intrinergy LLC and its German subsidiary CompacTec KG.

In November, Intrinergy announced it was doubling capacity at its CompacTec wood pellet plant in Straubing, Germany, taking production from 60,000 metric tons (66,139 tons) to 120,000 metric tons (132,277 tons) per year. To facilitate the production hike, a new combined-heat-and-power (CHP) plant was built adjacent to the pellet mill. It’s designed to burn wood resi-dues and produce 16 megawatts of thermal energy, which is then used to heat the dryers and generate 1.1 megawatts of electricity for sale to the local grid. Intrinergy Executive Vice President Thomas Meth said the CHP plant is complete and the added dryer capac-ity, along with the expanded pellet press line, should be installed by March. The pellets are

made from sawdust and other types of wood residues.

Intrinergy also further developed a €34 million ($47.1 million) wood pellet CHP plant in Belgium by closing fi nancing, and signing an engineering, procurement and construction contract with France-based Areva. Meth said the project will produce up to 5 megawatts of electricity for sale to the

grid, and enough thermal energy to run the on-site wood dryers. The facility is expected to produce between 50,000 and 60,000 met-ric tons (55,116 and 66,139 tons) per year. Groundbreaking is expected by April, and plant commissioning is anticipated in the second quarter of 2010.

Both pellet mills are intended to serve the European domestic heating markets, along with the “medium-sized” market of hotels, hospitals and apartment buildings with a centralized heating unit, Meth said. “Most of our buyers are families that use four to fi ve tons of pellets per year for heat-ing and hot water,” he said. “We’ve focused on the domestic market because it allows us to lower our price when our raw material costs go down but also to increase our prices when our costs go up. In pure industrial mar-kets, it’s very, very diffi cult to do that.”

-Ron Kotrba

Intrinergy’s CompacTec wood pellet plant and combined-heat-and-power facility in Germany

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Reports highlight benefi ts of CHP technologies A report issued by Tennessee-based

Oak Ridge National Laboratory in De-cember names combined-heat-and-power (CHP) solutions as one of the most prom-ising options to increase energy effi ciency in the United States.

CHP technologies, also known as co-generation technologies, increase energy ef-fi ciency through the capture and utilization of waste heat produced during the power generation process. This allows CHP sys-tems to use less fuel than would be required to operate separate heating and power sys-tems.

Despite the fact that CHP is a proven and effective source of energy, the report, titled “Combined Heat and Power: Effec-tive Energy Solutions for a Sustainable Fu-ture,” said CHP technologies remain one of the most underutilized sources of energy effi ciency in the country.

According to a separate report issued by Washington, D.C.-based Worldwatch Institute in December, two-thirds of the

energy contained in the fuel used by most power plants is lost in one of two ways: through the production of waste heat or through the power transmission process. The report, titled “Low-Carbon Energy: A Roadmap,” estimates that the waste heat lost annually at U.S. power plants contains enough energy to power Japan for a year.

Worldwatch Institute’s report estimates that CHP systems could increase the energy effi ciency of power generation from 33 per-cent to up to 90 percent. While some coun-tries, such as Finland and Denmark, obtain 40 percent to 50 percent of their electric-ity from CHP systems, only 8 percent of electricity in the U.S. is generated by CHP technology.

ORNL’s report detailed ways CHP can benefi t the United States. Increased energy effi ciency would reduce greenhouse gas emissions, and lead to lower business costs and the development of green-collar jobs. In addition, most of the energy produced through CHP is used locally, which reduces

grid congestion and limits the amount of energy lost in the power transmission pro-cess.

Virtual Media Holdings Inc. is one company with plans to move forward with the installation of CHP technology in the U.S. The company recently acquired Bio-mass Secure Power Inc., a company that de-velops biomass-fueled cogeneration power plants.

In December, the company announced its biomass cogeneration system had been approved by the California South Coast Air Quality Management District, which is the pollution control agency for Orange, River-side and San Bernardino counties, as well as Los Angeles. According to Biomass Secure Power Chief Executive Offi cer Jim Carroll, details of his company’s plan to construct a cogeneration facility in California will be released once the project is fi nalized.

-Erin Voegele

The 74-acre, 300,000-square-foot Mu-seum of Science and Industry in Tampa, Fla., plans to build a hands-on educational exhibit about energy that will include a 6-megawatt biomass gasifi cation plant that provides power to the museum.

According to Wit Ostrenko, president of the Hillsborough County, Fla.-owned facility, the museum is requesting proposals from developers that might be interested in building a gasifi cation plant at the proposed $14 million Energy Center exhibit, which will occupy a 10,000-square-foot building on three to fi ve acres of the museum campus. The gasifi cation plant will include an edu-cational component so that visitors can see how the gasifi cation plant works and how biomass gasifi cation is more benefi cial than burning fossil fuels.

“We’re looking for a company that needs to demonstrate that they have the technol-ogy to do this,” Ostrenko said. “We will have a million people a year coming from all over the world to see their power plant.” He said the facility will take in 150,000 tons of wood waste per year from Hillsborough County and possibly the city of Tampa.

Ostrenko described the Energy Center as an idea tossed around for 30 years. “The idea has more legs now,” he noted. “I don’t think anybody is letting go of the fact that by spending even $1.75 on a gallon of gas, a lot of that money is going to other coun-tries.”

The museum has a committee dedicat-ed to seeing the Energy Center happen. “We looked at it practically,” Ostrenko said. “We consume 1 megawatt of power that costs us almost $700,000 per year. So how can we get rid of that $700,000-per-year bill?” Other plans for the Energy Center include tapping methane gas from a nearby landfi ll.

-Ryan C. Christiansen


industry NEWS

In US and abroad: Biogas on the riseGenerated from manure and munici-

pal solid waste to name a few, biogas is the backbone of multiple power applications and technologies across the globe.

To that end, California-based BioEn-ergy Solutions has received approval from the Kern County Board of Supervisors to construct a biogas distribution network in the Central Valley of southern California. Eventually becoming a nine-farm network, the underground pipeline system will trans-port methane gas captured from cow ma-nure to a purifi cation facility in Shafter, Ca-lif. After being upgraded to utility-standard natural gas, it will be delivered to Pacifi c Gas & Electric Co.’s nearby pipeline for distribu-tion. BioEnergy Solutions spokesman Steve Duchesne said so far four dairy farms have signed onto the project, and engineering de-sign work has begun. Project construction is slated to begin in 2009.

Georgia-based Great Lakes Biogas Technologies Inc. recently entered an agree-ment with Canada-based Zero Waste Ener-gy Systems Inc. to market its waste compac-tion technology. The Revolution Compactor is designed to remove liquids and air from

wastes prior to being loaded and transport-ed, which reduces transportation costs and the need for landfi ll space. According to the company, it has a 50-to-1 compact ra-tio for plastics. The fi rst unit was recently completed, and it’s awaiting fi nal testing, ac-cording to GLBT Chief Operating Offi cer Bruce Coxhead. The company has received letters of intent for the digester from a fruit and vegetable processor, a meat processor/packer, and a large dairy operation.

Researchers at Cornell University in Ithaca, N.Y., announced they have devel-

oped a process that uses undigested manure and chemical fertilizers to remove hydrogen sulfi de gas from biogas produced from the anaerobic digestion of manure at farms, sewage treatment plants and landfi lls. To be marketed as SulfaMaster, the process pipes biogas through barrels containing a medium of manure mix, which removes the hydro-gen sulfi de. The researchers believe it will be a cheaper alternative to industrial scrubbers that aren’t feasible for smaller farms.

In other global biogas news, U.K.-based Global Renewables Ltd. and Bovis Lend Lease contracted with Kirk Environmental on a project to build two anaerobic digest-ers that will serve to reduce landfi ll needs by treating household waste in Lancashire County, and produce biogas for electricity generation. Meanwhile, in Asia, the World Bank announced it will invest $120 million in China’s National Rural Biogas Program, which aims to help farmers and residents improve living conditions by using the an-aerobic digestion of waste to generate bio-gas for cooking.

-Anna Austin

The Revolution Compactor is designed to remove liquids and air from wastes, reducing transportation costs and the need for landfi ll space.

Museum of Science and Industry in Tampa, Fla.

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Tampa science museum to feature biomass gasifi er


industry NEWSConnecticut power plant plans wood biomass integration

Princeton, N.J.-based power generation company NRG Energy Inc. announced its intention to use woody biomass as a fuel source at its Montville Generating Station in Uncasville, Conn. The biomass-based energy would provide approximately 30 megawatts of the unit’s annual 82-mega-watt electrical generating capacity.

NRG intends to use wood chips and other woody biomass to cogenerate elec-tricity currently being produced with oil and natural gas. According to NRG spokes-woman Lourie Newman, the company ex-pects to begin integrating biomass into the Uncasville facility in mid-2011.

This would be its fourth “Repower-ing NRG” project in Connecticut. The initiatives aim to integrate renewable and sustainable power sources at NRG’s 48 plants across the U.S. The company has a

total generation capacity of approximately 24,000 megawatts.

According to Michael Liebelson, NRG chief development offi cer of low-carbon technology, fi nding ways to reduce the carbon footprint of its existing electrical generation plants is what prompted the

company to incorporate biomass as a fuel source. “When this biomass project comes on line, it will be another step in helping Connecticut reach its goal of creating 20 percent Class 1 renewable power genera-tion by 2020,” he said. “In addition to pro-viding clean, renewable energy to Connect-icut residents, we are obtaining the biomass from nearby foresters and sawmills, which will provide economic benefi ts to the re-gion.”

In mid-2008, NRG added 40 mega-watts of ultra-low-sulfur-diesel-based pow-er generation at its Cos Cob site in Fairfi eld County, Conn., bringing the plant’s total output to 100 megawatts, while reducing overall emissions from the site.

-Bryan Sims

NRG’s Montville Generating Station in Uncasville, Conn., aims to produce approximately 30 megawatts of power using woody biomass.

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Biomass fuel pellets show promiseSeveral wood pellet manufacturers are

opening new plants in 2009. Here, EPM de-tails the latest projects.

Indeck Energy Services Inc. in Buffalo Grove, Ill., plans to open the Indeck Mag-nolia Biofuel Center wood pellet production plant in Magnolia, Miss., in September. The company has a contract with a local provid-er for wood within 50 miles of the plant, according to Nunzio Maniaci, manager of business development for Indeck. He said presales for pellets have primarily been to customers in the northeastern U.S., including New England, New York and Pennsylvania. However, Indeck anticipates signifi cant bulk sales to European markets, as well.

In the heart of the northeastern U.S. wood pellet market, Geneva Wood Fuels LLC plans to open its Strong Maine Wood Pellet facility in Strong, Maine, in early 2009. It will produce wood pellets for the home-heating market under the brand Maine’s

Choice, which will be sold exclusively by Foxborough, Mass.-based International Forest Products to distribution outlets in the Northeast and possibly Pennsylvania, according to Peter Keyes, president of solid

products for International Forest Products. He said demand for wood pellets in the Northeast is strong, fueled by a 500 percent increase in wood pellet stove sales in 2008.

Meanwhile, researchers at the Agri-cultural Utilization Research Institute in Waseca, Minn., continue to test how energy crops in the U.S. can be made into pellets for combustion. In December, AURI and representatives from Hi-Tech Agro Projects Private Ltd., a biomass densifi cation system manufacturer based in New Delhi, India, demonstrated the Hi-Tech Agro PL500 fl at-die pellet mill that AURI is using in its lab. AURI demonstrated pelletizing distill-ers dried grains with solubles (DDGS) and also DDGS mixed with wheat middlings. According to AURI, DDGS provides an average of 9,600 British thermal units (Btu) of energy per pound, and wheat middlings provide as much as 8,200 Btu per pound.

-Ryan C. Christiansen

Pellets of DDGS mixed with wheat middlings were made using the Hi-Tech Agro PL500 fl at-die pellet mill at the Agricultural Utilization Research Institute in Waseca, Minn.

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industry NEWS

Obama forms green cabinetWith the inauguration of Presi-

dent Barack Obama, the future of the U.S. energy industry appears bright, especially with the nominations of several cabinet members that have a history of supporting renewable en-ergy and advanced biofuels.

Former Iowa Gov. Tom Vilsack was nominated as secretary of ag-riculture, a choice which has been positively received by multiple groups including Growth Energy, the National Corn Growers Asso-ciation and the National Biodiesel Board. He served as governor from 1999 to 2007, was a founding member and chairman of the Governors Biotechnology Partnership, and a former chairman of the Governors’ Ethanol Coalition (now called the Governor’s Biofuels Coalition), the Midwest Governor’s Confer-ence and the National Governors Associa-tion’s Natural Resources Committee.

“Vilsack is keenly aware of the benefi ts of agricultural biotechnology, and the role that science and innovation can play in helping farmers grow more food in a more environ-mentally friendly manner,” the Biotechnology Industry Organization stated. “He is a strong

proponent of ethanol production, and we are confi dent he will work to further diversify our nation’s biofuels supply.”

Steven Chu, professor of physics, and molecular and cellular biology at the Univer-sity of California, Berkeley, has been nomi-nated as secretary of energy. Since 2004, he has been director of the Lawrence Berkeley National Laboratory, a U.S. DOE-funded center of research into biofuels and solar en-ergy technologies. He was awarded a Nobel Prize in Physics in 1997 for the development of methods to cool and trap atoms with laser light. He is also a former chairman of Stan-ford University’s physics department.

“We believe that aggressive support of energy science and technology, coupled with incentives that accelerate the development

and deployment of innovative solutions, can transform the entire landscape of energy demand and supply,” Chu said in his acceptance speech. “What the world does in the coming decade will have enormous consequences that will last for centuries. It is imperative that we begin without further delay.”

U.S. Sen. Ken Salazar, D-Colo., has been nominated as secretary of the interior. He has supported the creation of a clean and renewable energy economy, having success-fully pushed for the passage of the Renew-able Fuels, Consumer Protection and Energy Effi ciency Act of 2007, and the introduction of a tax measure to support cellulosic biofuel producers.

“Senator Salazar is uniquely qualifi ed and experienced to serve as secretary of the interior,” said Bob Stallman, president of the American Farm Bureau Federation. “He serves on the Energy and Natural Resources Committee, and has been a strong proponent of expanding the development of renewable fuels.”

-Anna Austin

Chu SalazarVilsack

‘Methane to Markets’ report indicates growthThe U.S. EPA released its third annual

Methane to Markets report in November, in which the agency documented global partner-ships that resulted in the reduction of meth-ane emissions from coal mines, oil and gas systems, agriculture, and landfi lls. The report also stated that in 2005 global methane pro-duction from livestock manure that could be used for anaerobic digestion totaled approxi-mately 230 million metric tons of carbon di-oxide equivalent.

The EPA’s current work in reducing methane emissions from global agricultural industries includes reducing swine farm meth-ane emissions in three provinces near Bang-kok, Thailand. The agency is also partnering with the Chinese Ministry of Agriculture to expand the number of village-scale digesters in rural China, and helping to provide tech-nical training to villagers. Similar efforts are expected in Vietnam, the Philippines, Thai-land and Korea. In India, the EPA is helping

to deploy digesters in the dairy sector, and in the wine and distillery industries. Instances of livestock manure discharging directly into surface waters still occurs in Mexico, where the EPA said it’s helping to advance anaero-bic digestion technology through collabora-tion with Mexico’s environmental agency that will develop demonstration projects and raise awareness.

In the report, the EPA stated the U.S. has been a leader in the recovery of landfi ll gas and is leveraging that leadership by helping the global community get up to speed. Projects of varying stages in Ecuador, Ukraine, Brazil, China, Colombia, Korea, India and elsewhere are benefi ting from the Methane to Markets partnerships. The EPA is also partnering with the International Energy Agency. The team developed a case study, titled “Turning a Li-ability Into an Asset: Landfi ll Methane Utiliza-tion Potential in India.” The agency stated that India is transitioning from open dumps to

more managed landfi lls, and new Indian land-fi lls should consider landfi ll gas management and capture as part of the design. “In order to launch a landfi ll gas energy industry in India, the study recommended utilities should offer green power premium pricing for landfi ll-gas-generated electricity, and landfi lls should take advantage of existing government subsidies for landfi ll gas energy,” the Methane to Mar-kets report stated.

All told, when current Methane to Mar-kets projects are fully implemented, the EPA estimated it will result in the annual reduction of methane emissions by more than 24 mil-lion metric tons of carbon dioxide equivalent, tripling the reductions achieved in 2006. The partnership now includes 27 governments and more than 800 private sector entities, fi nancial institutions, nongovernmental agencies and other organizations.

-Ron Kotrba

A new bioplastics business incubator housed on a former Deere & Co. campus opened in Waterloo, Iowa. Sponsored by Waterloo Development Corp., Cedar Val-ley TechWorks will be a virtual and physi-cal regional center for the development of bioproducts and the bioenergy industries. Bioplastics developer MCG BioCompos-ites LLC has been hired to provide mar-keting and industrial recruitment services for the business incubator.

“The TechWorks concept has been in development for over fi ve years in partnership with Deere & Co., which provided the land, build-ings and various resources,” said Sam McCord, president and chief ex-ecutive offi cer of MCG. “[Deere & Co.] has an interest in the project to explore additional opportunities in the commercialization of biomass into bioproducts, bioprocesses and bioenergy.” MCG will become one of the tenants at Cedar Valley TechWorks, and MCG staff and techni-cal staff from Deere will help with the testing and commercialization of bioplastic and bioenergy applications.

McCord said one of the fi rst projects underway at Cedar Valley TechWorks is the development of a bioplastics pilot production facility

and testing laboratory. An entrepreneur or development company will be able to produce their bioplastic formulations, make sample parts and test the physical properties.

There has been keen interest in the incubator. A Biomass Magazine Web ex-clusive announcing the center’s opening generated 15 inquiries within a few days,

McCord said. Two prospective companies were scheduled to inspect the center right

after New Year’s Day. In addition to entrepreneurs and start-ups, Cedar Valley TechWorks expects to work with existing companies interested in replacing conventional materials with biomass-based materials.

The fi rst tenant ready to move into the facility is the University of Northern Iowa’s National Ag-Based Lubricant Center, McCord said. There is room to house 12 to 15 businesses in the fi rst 150,000-square-foot building, with a second building available for an equal number of businesses as Cedar Valley TechWorks grows.

-Susanne Retka Schill


industry NEWS

An artist’s rendering of Cedar Valley TechWorks

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TechWorks incubator opens in Iowa

Biomass board takes in-depth look at feedstocksThe Biomass Research and Development

Board has taken an in-depth look at agricultural and forestry feedstocks for both conventional and advanced biofuels, with the goal of inform-ing investors of the research and development needed to expand biofuel production. The eco-nomic analysis looked at several scenarios for dif-ferent conventional biofuel production levels in 2016 and 2022, as well as several cellulosic etha-nol production scenarios, forecasting a range of prices for bioenergy crops and residues from $40 to $60 per dry ton for biomass, depending on the scenarios.

The report also considered greenhouse gas (GHG) impacts but acknowledged the models used in the analysis didn’t capture the full life-cycle impacts of increased biofuel production. “Carbon markets could be an effective approach to simultaneously increasing biofuels production and improving the GHG footprint of these fuels,” the report said. A $25-per-metric-ton carbon dioxide equivalent that resulted in the largest decrease in GHG emissions was among the alternative scenarios analyzed. The report suggests three potentially fruitful research areas: raising crop produc-tivity without additional fossil fuel inputs, reducing uncertainties in GHG emissions associated with nitrogen fertilizer use and upgrading

the capabilities of the USDA’s in-house eco-nomic models to analyze the GHG implica-tions of various policies.

The report also discussed the consequenc-es of bioenergy’s economic, environmental and social sustainability. Because the models used to evaluate the feedstock scenarios were inade-quate and not designed to provide information on variables that measure sustainability directly, the report recommended further research on sustainability, as well as research on a broad portfolio of feedstocks that offer geographic diversity and greater resilience.

The report, “Increasing Feedstock Pro-duction for Biofuels: Economic Drivers, En-vironmental Implications and the Role of Re-search,” is one of a series of initiatives detailed in the interagency action plan unveiled by the

Biomass Research and Development Board in October. The board, cochaired by offi cials from the USDA and U.S. DOE, coordinates the efforts of nine federal agencies and two executive-branch offi ces in advancing the research and development of biobased products and bioenergy. The 137-page report is available at www.brdisolutions.com.

-Susanne Retka Schill


industry NEWS

Companies develop new biomass briquette presses

Pennsylvania-based BHS Energy LLC and California-based Biomass Briquette Systems LLC each announced the availability of new biomass briquette presses in December.

BHS Energy has developed a small-scale briquette press de-signed to compress switchgrass and other biomass materials such as wood waste. The machine produces round briquettes approxi-mately 1.5 inches in diameter and up to one inch in length. “They are roughly the size of a golf ball,” said Bryan Reggie, an electrical engineer and managing member of BHS Energy.

The press can be powered by a tractor’s power takeoff or by a three-phase motor. It’s compact and can be loaded onto a trailer for mobility. When fed switchgrass, it produces approximately 600 pounds of briquettes per hour. When fed wood, it can produce up to 1,000 pounds of briquettes per hour.

According to Reggie, the press is designed to benefi t indi-vidual farms and other small-scale entities interested in produc-ing their own heating fuel without the expense of investing in an industrial-scale product. He estimates the product will retail for be-tween $35,000 and $48,000. Commercial production of the press is expected to begin in the summer of 2009. The company is taking orders for discounted preproduction machines, which will be used to fi nalize the design.

Biomass Briquette Systems’ new mechanical press, the BP-1500, can produce up to 1,500 pounds of briquettes per hour. It’s an automated electrical press that produces briquettes approxi-mately two inches in diameter. It was designed to process wood waste but can handle other kinds of biomass, as well, according to Biomass Briquette Systems President Dave Schmucker. “The size and consistency of the material is very important … in order to have the optimum performance and product output,” he said. The press can handle biomass with a moisture content of up to 15 percent.

-Erin Voegele

BHS Energy’s small-scale briquette press can be loaded on a trailer for mobility.

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Roquette Frères, Europe’s largest starch and starch-deriva-tives company headquartered in Lestrem, France, signed a licens-ing agreement with Rice University in Houston that will enable Roquette to commercially produce biobased succinic acid.

Succinic acid is a valuable four-carbon molecule that serves as a viable replacement for its petroleum-derived cousin: maleic anhydride. It’s commonly used in the plastics, textiles and pharma-ceutical industries.

The technology for effi ciently producing biobased succinic acid was developed and patented by Rice University Bioengineer-ing professor Ka-Yiu San, and Biochemistry and Cell Biology pro-fessor George Bennett. Their process employs the principles of “white biotechnology,” meaning production without the use of petroleum, according to Bennett. Until recently, the only way to produce succinic acid in industrial quantities involved petroleum-based products.

Because maleic anhydride and succinic acid are chemically similar and succinic acid is produced by all living things through the fermentation of sugars, succinic acid could also serve as a plat-form chemical for the synthesis of a multitude of compounds. “[Succinic acid] is a very useful molecule because it has two ends that are carboxylic acids, so those can be used to cross-link differ-ent compounds,” Bennett said. “That makes it a moderately high-value chemical.”

Under the agreement, Roquette obtained the right to com-mercialize the technology developed by San and Bennett, who genetically engineered E. coli bacteria that produce high quanti-ties of succinic acid via a fermentation process. “The process is actually carbon-negative,” Han said. “It uses about 0.75 molecules of carbon dioxide for every molecule of succinic acid it produces from glucose.”

Roquette intends to develop a demonstration plant in France later this year. After successful demonstration of the technology, the company expects to begin large-scale production by 2011.

-Bryan Sims

Rice University signs dealto commercialize succinic acid

San, left, and Bennett

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ANAEROBIC DIGESTIONANAEROBIC DIGESTION

From Digestion

ANAEROBIC DIGESTION

Power companies in dairy regions have known for years that there is a distributed source of energy underfoot: cow manure. Using anaerobic digestion, manure can be converted into biogas and combusted in a generator to produce electricity. However, anaerobic digesters aren’t cheap. It takes collaborative funding and diligent project management to bring multiple anaerobic digesters on line within a power district—and that’s just the beginning.

By Ryan C. Christiansen

t’s enough to drive a dairy farmer crazy. After years of hearing neighbors complain about the smell coming from his lagoon, a farmer installs an anaerobic digester, effectively reducing the odor. But now instead of driving the extra mile to circumvent

his farm, people keep knocking on his door wanting to see where he put the poop.

“Once people hear about this, they want to see it,” says Dave Dunn, coordinator for Central Vermont Public Service Corp.’s CVPS Cow Power program. “We usually drive the farmer crazy with re-quests for tours. I’m not talking about just Vermonters. I’m talking 15 busloads from Montreal on the same day. You hold an open house and a couple thousand people show up. It’s people who live in Califor-nia, who come to Vermont during foliage season, and they remember reading an article in their local paper and they just drive up to the farm

and say, ‘Hey, do you mind if I come and take a look at it?’ That can be a challenge for some of our farmers.”

CVPS, an investor-owned utility based in Rutland, Vt., with 159,000 customers in 152 communities, currently has fi ve farms with anaerobic digesters and power generators on line producing 10,000 megawatt hours of total electricity per year. The company expects to have four new farms on line in 2009 producing an additional 6,500 megawatt hours annually. Short-term, CVPS desires to generate 20 megawatts of energy from digesters by 2012. Its volunteer customer-funded CVPS Cow Power program began in August 2004 and when its fi rst farm, the Blue Spruce Farm, began producing electricity in January 2005, more than 1,000 customers already had signed up to contribute an additional $0.04 cents per kilowatt hour to help pay for the operation.

I


ANAEROBIC DIGESTION

ToDistribution

ANAEROBIC DIGESTION

Approximately 1,200 miles to the west, Dairyland Power Co-op, a gen-eration and transmission cooperative based in La Crosse, Wis., that provides wholesale electrical requirements and other services for 25 electric distribu-tion cooperatives and 19 municipal utilities in the Upper Midwest, currently has three farms with anaerobic digesters and power generators on line pro-ducing 11,000 megawatt hours of total electricity annually. The utility pur-chases electricity from three additional farms with digesters and generators, but total power generation for those new additions has not been fully quanti-fi ed. Long-term, Dairyland desires to generate 25 megawatts of electricity from digesters. Dairyland’s volunteer customer-funded Evergreen program helps to fi nance digester power generation. Customers within Dairyland’s 25 member cooperatives can pay $1.50 per 100 kilowatt hours each month to fund the program.


ANAEROBIC DIGESTION

Dave Dunn, left, coordinator for Central Vermont Public Service Corp.’s CVPS Cow Power program, along with Amanda and Mark St. Pierre, examine the power generator at the couple’s Berkshire Cow Power facility at their Pleasant Valley Dairy Farm in Richford, Vt.

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Incentives for UtilitiesBoth utilities have had some success

with “cow power,” but funding for electri-cal distribution requirements and digester technology challenges continue to be hur-dles. Nevertheless, state renewable portfolio standards (RPS) specifying that electric utili-ties must generate a certain amount of elec-tricity from renewable resources by specifi c dates—and also customer and farmer inter-est—continue to drive utilities with dairies in their service areas to tap those resources.

Because Dairyland’s service area strad-dles Wisconsin, Minnesota, Iowa and Il-linois, the utility must juggle meeting the various RPS in those states. According to the Pew Center on Global Climate Change, both Minnesota and Illinois have mandated all utilities produce 25 percent of their en-ergy through renewable resources by 2025. Wisconsin requires 10 percent by 2015. “Iowa is mulling over what is going on in [neighboring states] and they will come up with something that’s similar,” says Neil Kennebeck, director of planning services for Dairyland. “That drives us to some extent,” he says, “but we’re also driven by enhancing the success of the farms that we serve—our name is Dairyland. It’s in our best interest to

enhance the success of those that we serve because, as a cooperative, we’re owned by those we serve.”

Vermont, meanwhile, doesn’t have a RPS and will only implement one in 2012 if its utilities have not met certain renew-able energy requirements, according to Pew. “We don’t have that mandated yet in Ver-mont because we have a signifi cant amount of renewable energy already,” Dunn says. “And so what we do is register our projects in Massachusetts. That gives us a way to ac-count for these (projects with) renewable energy certifi cates.”

Dunn says the emerging carbon credit market is also an incentive. “Methane de-struction is a big part of these projects,” he says, noting that CVPS estimates its farms prevent 18,000 metric tons of carbon per year from entering the atmosphere. “That could have signifi cant value,” he says.

Incentives for FarmersFarmers know the benefi ts of anaerobic

digestion: odor control, pathogen reduction, fewer fl ies, conversion of groundwater-pol-luting organic nitrogen into manageable am-monia fertilizer, and the production of bed-ding for their cows. “Farmers are absolutely


enamored with the idea,” Kennebeck says. “The bedding these days for a 1,000-head herd is probably worth $100,000 per year. That (alone) is a fairly good incentive.”

Farmers must also appease the U.S. EPA. In October 2008, the EPA fi nalized revisions to its National Pollutant Dis-charge Elimination System permitting re-quirements for concentrated animal feed-ing operations. Because the Clean Water Act prohibits large dairies from discharging nutrients into U.S. waters without a permit, those farmers must seek a permit and must also submit a nutrient management plan to the EPA. Kennebeck notes that anaerobic digestion provides farmers with a tool to manage those nutrients.

But operational benefi ts and regulatory incentives aren’t enough to bring more cow power generation to the grid. Digesters, gen-erators and electrical interconnections cost more than what wholesale electricity prices will pay for. “The challenge has been—not only in Vermont, but I think across the country—that farmers are not offered a reasonable price for the energy that they can produce,” Dunn says. When CVPS fi rst explored anaerobic digestion in 2003, he says the average wholesale price for electric-ity in Vermont was approximately $0.045 cents per kilowatt hour. However, digester project costs showed that a farmer would have needed at least $0.08 cents per kilowatt hour to break even. It was vital for CVPS to establish the volunteer customer-funded $0.04-cent-per-kilowatt-hour premium for farmers, Dunn says. The premium has pro-vided up to $175,000 to individual farmers to help with startup costs.

Funds are also available through state programs, but the lion’s share of funding for new digester projects has come from the USDA through its Renewable Energy and Energy Effi ciency program. Dunn says without the USDA’s fi nancial backing, di-gesters would not be feasible. “I can hon-estly say without that 25 percent share from the USDA—even with all that we’re doing here in Vermont—it would really be hard to get a project built,” he says. “That’s a key component.”

Getting onto the gridIncentives and funding are not enough

to get a digester built, however, if the local electrical distribution system cannot sup-port a power generator. Dunn says there are inherent problems that must be overcome to get cow power onto the grid.

“Utilities design their systems to have a large central generating plant and radial arms of distribution that just go out into the country,” Dunn says. “They were never designed to have generators at the other end, only at the center. It takes a creative interconnection scheme that will allow a generator to run productively for a farmer, but also have minimal impact on the power quality for all of his neighbors. [A generator] turning on or off can have a fairly signifi -cant effect on the local distribution system. There are mechanisms that can help solve that.” Dunn explains that CVPS uses what is essentially a high-quality circuit breaker with some computer controls to help bal-ance the load.

Even with fancy interconnection schemes, adding a generator to the grid sim-ply doesn’t make sense in some situations. “If we need to build 15 miles of distribu-tion or transmission to do it, the economics don’t work out,” Kennebeck says.

Dunn says in some instances, even fairly large farms are served by single-phase lines, which may be a deterrent if they have to bring three-phase electrical distribution to the farm. “That could be a big enough expense that it negatively affects the eco-nomics of the project,” he says.

Red TapeEven if a digester project is desirable,

fundable, and feasible, there is a lot of red tape to cut through before the farmer can put a shovel in the ground. The USDA grant application alone fi ts into a three-ring binder that is 2 inches thick, Dunn says. Water, air, electrical and even archaeological assessments must be dealt with, Kennebeck says. “You can’t just build it,” he says. “Ev-erything is regulated.” Neighbors, too, must be convinced that the project is a good idea. “Farmers need to do a lot of communicat-ing,” Dunn says.

ANAEROBIC DIGESTION


To help the farmer, CVPS Cow Power has a full-time project manager to help iden-tify funding opportunities, obtain permits, fi ll out paperwork and work with the digester technology provider. “Dairy farmers (already) have a million other things that they are do-ing,” Dunn says.

Digester Technology ChallengesGHD Inc. of Chilton, Wis., has been

the primary anaerobic digester technology provider in Vermont, Dunn says. According to GHD, the smallest dairies served by its

technology have approximately 650 head of cattle. In Wisconsin, Dairyland’s three prima-ry digesters use Microgy-branded technology provided by Environmental Power Corp. of Tarrytown, N.Y.; each of Dairyland’s digest-ers process manure from approximately 900 cows. However, CVPS and Dairyland digest-er operations pale in comparison with many of GHD’s and Environmental Power Corp.’s projects, which serve farmers with thousands of cattle. Smaller farmers have been virtually eliminated from cow power programs.

To meet this challenge, Kennebeck says

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Dairyland has been working with a company that develops systems for sewage treatment plants and potable water systems to devel-op a technology that would be feasible for a farmer with as few as 250 head of dairy cattle. He says the smaller reactor is more effi cient and costs less. “Working on the de-velopment of this smaller tank for smaller herds is something that we’re very interested in doing,” Kennebeck says. “We don’t want to turn our back on the smaller farms.” How-ever, continued research and development is on hold because of the recession. “Nobody has got a lot of walking-around-money any-more,” Kennebeck says.

CVPS is in the same situation. “In Ver-mont, our biggest farm is 1,500 cows and so, compared with the rest of the country, we’re relatively small by comparison on the dairy scale,” Dunn says. He says what is needed are systems that are cost-effective for dairies in the 200- to 300-cow range.

To offset the need for more cows, smaller farmers can partner with food com-panies to process food waste with their manure. Dunn says all CVPS digesters use additional food waste, including whey from cheese-makers, ice cream waste from Ben & Jerry’s, and leftover grease from meat prepa-ration. Kennebeck says he sees Dairyland tapping into sources of whey, turkey manure and vegetable waste for anaerobic digestion. “We have an incredible amount of agricul-tural waste streams that can be turned into something benefi cial that now is not,” Ken-nebeck says.

In the future, operational benefi ts and regulatory incentives might be enough to get farmers to build anaerobic digesters, even if they can’t install generators to sell power to utilities, Kennebeck says. “Farmers will do this on their own without an electrical com-ponent,” he says. “They will do it for bed-ding, to get the pathogen kill and to generate the gas, which they may be able to use on the farm to heat the home and to heat the barn.

“The regulatory world loves these di-gesters,” Kennebeck says. BIO

Ryan C. Christiansen is a Biomass Maga-zine staff writer. Reach him at [email protected] or (701) 373-8042.


TECHNOLOGY

Similar to cellulosic ethanol, there have been challenges to overcome in developing and advancing torrefaction. Now on the brink of commercialization, the thermochemical treatment process has the potential to serve as a substantial upgrade for coal and biomass combustion, co-combustion and gasifi cation applications.

By Anna Austin

A ‘Torrefic’ Energy Solution


TECHNOLOGY


orrefaction, a process commonly used to dry and roast coffee beans, has evolved into a promising bio-energy innovation. Traditional bio-

mass and coal may soon be playing second string to torrefi ed feedstocks, if companies striving to commercialize torrefaction tech-nologies are successful.

Torrefaction involves using extreme heat on biomass—most companies develop-ing torrefaction technologies are currently centered on wood—in a low-oxygen envi-ronment, during which volatile organic com-pounds, water and hemicellulose are sepa-rated from the cellulose and lignin. These changed properties produce a fuel that is easier to transport and store and is carbon neutral.

Several companies say they will soon achieve commercialization. One of those companies is South Carolina-based Agri-Tech Producers LLC, which expects to have a torrefaction technology commercialized within the next year.

Agri-Tech AdvancesAccording to Agri-Tech, torrefaction

can overcome the challenging logistics as-sociated with using woody biomass as an energy source. Utilizing a technology devel-oped at North Carolina State University in Raleigh, Agri-Tech is in the midst of scaling up a torrefaction technology that the compa-ny believes is more cost effective than typical torrefaction processes.

“This process densifi es, adds value to and improves the characteristics of woody biomass, making it a much better feedstock to co-fi re with coal, and producing superior pellets and briquettes to use in gasifi er opera-tions,” says Joseph James, president of Agri-Tech. “It also allows treated biomass to be shipped more economically, and for greater distances.” Agri-Tech expects to have an ex-clusive license for NCSU’s process before the end of the year.

Agri-Tech completed a prototype in the summer of 2008, and is now engaging outside engineering and manufacturing capabilities to scale the technology up for commercial use.

“We are in discussions with companies that could potentially produce these machines for us,” James says. “Everyone we are talking to says they could increase the throughput and enhance the workabil-ity of the machine—and we’re hopeful that after we make an en-gagement, we will have machinery available for sale within six to 12 months.”

James says Agri-Tech’s technology is relatively simple and straightforward. “Our research shows we have fewer moving parts compared with others that are making torrefaction tech-nologies,” he says. The process is also at-tractive because it’s powered by the products extracted from the wood, making it nearly self-suffi cient. “We use some of the organic and volatile compounds in the wood—the gases—as a fuel to run the process, so it is very fuel effi cient,” James says. “We use very little outside fuel for the process.”

TECHNOLOGY

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Bringing the HeatIn Agri-Tech’s torrefaction process,

wood is heated to 300 to 400 degrees Cel-sius (572 to 752 degrees Fahrenheit), in a low-oxygen environment. The volatile or-ganic compounds and hemicellulose, which are separated from the cellulose and lignin along with water, are combusted to generate 80 percent of the torrefaction process heat. The remaining warm lignin acts as a binder once the torrefi ed wood is pelletized.

Water removal is a key factor in the eco-nomical use of wood as a biomass source. The moisture content of fresh biomass is about 50 percent, according to NCSU and Agri-Tech. Transporting water requires 20 percent to 50 percent of the delivered cost; 10 percent to 25 percent of the total deliv-ered cost. Water may also reduce the heating value of biomass by roughly 50 percent.

Torrefi ed wood is dense when it’s pellet-ized, reducing transportation costs of the oth-erwise bulky material. NCSU and Agri-Tech have found that it costs 23 cents per ton per mile to transport chips and torrefi ed wood.

The torrifi ed wood is also dry and wa-ter resistant because at the high temperatures used in the process, the lignin becomes plas-tic and is transformed into a binder for indi-vidual wood particles. In addition, torrefi ed wood, which has a low sulfur and mercury content and is carbon neutral, can be easily crushed and doesn’t rot.

Furthermore, torrefi ed wood has a heating value of 11,000 British thermal units (Btus) per pound, compared with coal at 12,000 Btus per pound, according to NCSU and Agri-Tech. Similar to coal, torrefi ed wood generates electricity at 35 percent fuel to electricity, compared with untreated wood which has a conversion rate of 23 percent fuel to electricity.

Quantity of CustomersAlthough Agri-Tech is focused on sup-

plying its technology for large, fi xed facili-ties, it is also interested in providing mobile torrefaction equipment. “In regards to the mobile units—in terms of hurricane recov-ery or disaster recovery—we think we could

deploy these units to areas with lots of downed trees to create value, which helps offset recovery costs,” James says.

That would further expand the cus-tomer base for torrefaction, which is al-ready considerably wide, James says. “We have several [potential customers],” he says. “One is electric utilities which currently burn coal. Typically, coal is pulverized. The material we produce will crush just as eas-ily as coal and at the same particle size that coal is normally crushed to, for that same purpose.”

Other customers, are those who are already involved in the pellet-making busi-ness, according to James. “Those custom-ers are currently making pellets for U.S. consumption and for export,” he says. The third customer group, although small, are companies that are making cellulosic etha-nol using gasifi cation processes. “We think that will grow in the future,” he says. “Some are telling us that torrefi ed material is a su-perior feedstock to them, over and above the raw wood and raw cellulosic material;

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it’s drier and it has more carbons available for conversion. Now we now think there are other applications as well.”

When it comes to competition, James says he’s not aware of any commercial tor-refaction plants operating in the U.S., although many companies are developing research and working toward commercialization.

In addition to wood, the company is also torrefying switchgrass. “We’ve been working with one of the largest switchgrass producers east of the Mississippi, and look forward to continuing that exploration of switchgrass as a source of torrefi able material,” James says. “We’re also looking at other biocrops, which are not food crops. We think that in addition to wood, these are the feedstocks of the fu-ture, along with other cellulosic material.”

Although torrefaction may be new to some, it is really an old process that re-searchers are breathing new life into, James says. “Torrefaction research is old—30 to 40 years,” he says. “Similar to other research, such as biodiesel, it was sort of shelved when the not-so-renewable alternative fuels were entering the marketplace. We are looking for innovations to that basic research to make it a competitive process.” BIO

Anna Austin is an Biomass Magazine staff writer. Reach her at [email protected] or (701) 738-4968.

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North Carolina-based Integro Earth Fuels says it has begun development and construction of a torrefaction facil-ity in Roxboro, N.C., north of Durham in Person County.

Integro has done extensive work with U.K and Southeastern U.S. utilities and combined heat-and-power users presenting test materials and the merits of torrefi ed biomass.

Integro Roxboro LLC is expected to produce 87,600 tons of torrefi ed biomass or “green coal” annually, with expansion capabilities to 350,000 tons annually. Integro expects construction to be com-pleted by the second quarter of 2009, and anticipates the facility will be on line by the third quarter of 2009.

The plant will operate 24 hours a day, seven days a week for 50 weeks and will close for two weeks of scheduled maintenance annually.

Integro’s torrefaction process sub-jects wood, forest materials and biode-gradable waste to temperatures of 250 to 300 degrees Celsius (482 to 572 de-grees Fahrenheit).

Currently, Integro says it is fi nalizing off-take agreements with local utilities and universities with their own heat and

power plants to provide them with a ma-jority of its supply beginning in 2009. Inte-gro plans to build 10 more facilities over the next six years to meet the demand from coal-fi red electricity producers.

Across the nation, Washington-based NewEarth Renewable Energy Inc. recently announced it is closing in on funding that will allow the company to complete construction of a commercial-scale biomass processing plant to host its ECO Pyro-Torrefaction technology.

NewEarth produces what it calls E-Coal and E-Oil, which the company says can be used at power stations as an al-ternative to coal, petroleum and natural gas, without utility retrofi ts or down time. It may also be used for heating homes and businesses. The company says it will use energy crops, agricultural waste, dead wood and seaweed as feedstocks.

The company says it has signed seven contracts with major electricity producers in the U.S. and Europe, and is in discussion with others. NewEarth expects to begin operations within the next four months. The exact location of the Québec, Canada-based torrefaction plant will be unveiled once operations begin.

On the Heels of Commercialization


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In Europe, wood pellets are used as fuel for utility, commercial and residential applications to produce electricity and heat, but in the U.S. pellets have largely been relegated to the residential markets. Effective policy drivers and a different mindset exist in Europe, while in the U.S. it’s hard to compete with cheap coal.

By Ron Kotrba

Closing the Wood Pellet

G A P


ood pellets as a heating fuel originated in the U.S. during the 1970s in response to high energy prices and is now an in-creasingly popular co-fi re and

standalone feedstock for commercial and util-ity renewable energy applications especially in Europe. There is some pellet consumption in the U.S. In 2006, according to the Wood Pellet Association of Canada, there were approxi-mately 60 U.S. wood pellet mills in operation, producing about 800,000 tons a year. Those pellets were sold exclusively into the residen-tial bagged market, which is big in the North-east and Pacifi c Northwest. For 2007, WPAC added 25 producer members to its organiza-tion, including three pellet plant projects in development to primarily serve industrial ex-port markets in Europe. In 2008, Green Circle Bio Energy Inc. commissioned a 550,000 ton per year wood pellet mill in Cottondale, Fla., but until there is any real incentive in the U.S. to use pellets in utility-scale or any apprecia-ble commercial operations, the company—owned by Swedish-based JCE Group AB—is exporting all of its product to Europe where pellet markets are insatiable.

“We started production in May, and typi-cally these plants take a few months to achieve full capacity, especially with this being the larg-est one in the world and one of the few that runs on solid wood instead of wood residues,” says Olaf Roed, president and chief executive

offi cer of Green Circle Bio Energy. Roed says in the spring his company will be evaluating if, when and where to build additional wood pellet plants in the U.S. As for securing U.S. contracts for pellet sales, Roed says, “In the U.S. we still wait for new regulations, and we’re optimistic something will happen in the next Congress as far as carbon regulation is con-cerned.”

A much smaller appetite for wood pel-lets exists in the U.S., but high prices recently experienced in the major competitive heating fuels such as fuel oil, propane and natural gas, has spurred growth in U.S. residential wood

pellet markets. According to the Pellet Fu-els Institute, approximately 1 million pellet stoves and fi replace inserts are used in homes throughout the U.S. and Canada.

U.S. Not Ready for Utility-Scale Consumption

To gain traction in U.S. electrical util-ity markets, where 50 percent of the power generation comes from cheap and abundant coal, however, a lot of work remains to be done, says Jim Thompson, vice president of Indeck Energy Services Inc. IES, in partner-ship with Midwest Forest Products Co., is in

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Indeck Energy Services held a ground-breaking ceremony for its 90,000-ton per year wood pellet plant in Ladysmith, Wis., named the Indeck Ladysmith Biofuel Center. The company recently broke ground on an identical plant in Mississippi.

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the early stages of constructing a 90,000-ton-per-year wood pellet plant in Ladysmith, Wis. The name of the pellet mill is the Indeck La-dysmith Biofuel Center. Thompson provides perspective on why there’s little interest in the U.S. to co-fi re wood pellets with utility-scale power plants. “I don’t see any reason to su-garcoat this—coal is a cheap fuel,” he says. “Wood pellets compete extremely well with natural gas, propane and home heating oil but, on price, wood pellets don’t compete very well with coal. The whole CO2 (carbon dioxide) initiative is gaining momentum in our coun-try, along with renewable portfolio standards (RPS), but not every state has one.” Wiscon-

sin does have a RPS, but Thompson says it hasn’t gained much traction.

The Indeck Ladysmith Biofuel Center is expected to come on line in July 2009, and Thompson says the company has sold more than half the projected wood pellets for its entire fi rst year of production. “Those are primarily going to the Northeast part of the U.S.—not to Europe,” he says, even though he admits he has seen an extraordinary amount of interest coming from Europe. “There’s a lot of interest overseas,” he says. Thompson says Northeast purchasers shored up lots of contracts for the facility’s premium residential pellets ahead of production next year, and

European buyers have already sent letters of interest. That doesn’t mean they are ignoring the potential markets in the mill’s host state of Wisconsin. “We’re reserving a signifi cant amount of pellets for sale right here in north-ern Wisconsin, where it gets nice and cold—and that’s cold with a capital ‘C,’” Thompson jokes. “To be fair, we are talking with utility companies in Wisconsin, we are talking to the state of Wisconsin about three of their plants in Madison and we’ve done test burns with them—so I think eventually it’s going to happen.” He says within the next year or two there may be a shift in utility and com-mercial interest in wood pellets for electrical and thermal generation, but utility companies must begin to take carbon reduction seriously. Utilities also must be able to pass along the added cost to the consumer. “I believe you will begin to see this happen but where we are right now, people really don’t want to hear about premium costs for electricity—they just don’t,” Thompson says. “Carbon is trading at $5 a ton on the Chicago Climate Exchange, and that’s not much money. If it goes to $35, $40 or $50 a ton, as it is in Europe, the cost of doing this comes down because the cost of not complying with CO2 reduction goes up. When that happens, we’ll see the markets move.”

IES has also broken ground on a plant identical to the Ladysmith, Wis., plant in Mag-nolia, Miss., where no RPS exists. “It’s on the

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New high-pressure turbines employed by Drax Power can help increase the effi ciency of converting biomass, such as wood pellets, to electrical power.

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same railroad—and not just the same railroad but the same set of tracks—as the Ladysmith plant,” Thompson says, adding that project development is two months behind the Wis-consin pellet mill.

Europe’s SuccessIn November 2007, the International En-

ergy Association Bioenergy Task 40 released a comprehensive report titled, “Global Wood Pellets Markets and Industry: Policy Drivers, Market Status and Raw Material Potential.” According to the report, Sweden, Denmark, Germany and Austria have the most de-veloped markets for wood pellets. In 2006, Europe produced 4.5 million tons of pellets compared with the 800,000 tons produced in the U.S. during that same year. In 2006 how-ever, European pellet consumption topped off at 5.5 million tons, meaning that about a million tons were imported into Europe that year. Unlike U.S. pellet use, which again is largely accounted for in residential heating ap-plications, the European markets absorb pel-lets for both electrical and heat generation.

In Sweden, wood pellet production start-ed in 1982, shortly after it did in the U.S., but according to the IEA’s Bioenergy Task 40 re-port, the fuel didn’t take off until 10 years later when the Swedish government introduced a tax on fossil fuels, which now stands at 59 per-cent tax on CO2 on all fossil fuels. “Virtually overnight it became cheaper for utilities and

private consumers to burn biofuels rather than oil, coal or gas,” the IEA report states. “An important factor behind the fast growth was the fact that big utility (Stockholm Energy) in-vested in a large-scale pellet plant to secure its requirements of pellets before a conversion of its boilers. Thus, the introduction of pellet use in large-scale boilers and later introduc-tion of the green electricity certifi cate system in 2003 were major factors behind the pellet market growth in the country.”

It’s as if there is an entirely different and unifi ed mindset in Europe on carbon reduc-tion and biomass utilization, compared with that of the U.S. Adherence to the Kyoto Protocol and more recently EU Directive 2001/77/EC, which requires member states to adopt national renewable energy and bio-electricity targets, bolstered the European bio-mass markets. According to the IEA report, annual growth rates “in the development of solid biomass accelerated signifi cantly in 2004 and 2005. Annual growth rates in recent years amounted at EU-25 level to 20 percent in 2002, 13 percent in 2003 and 25 percent in 2004, refl ecting the impetus those legislations gave to the markets.”

In North Yorkshire, U.K., Drax Power Ltd. is building what the company says is the largest biomass co-fi red power plant in the world. With a 4,000-megawatt (MW) coal-fi red power plant, Drax Power is planning to incorporate wood pellets and other biomass

materials to the tune of 400 MW, or 10 per-cent of its overall power generating capabil-ity at the site in North Yorkshire. Drax Power has signed an engineering, procurement, con-struction contract with Alstom Power Ltd., the company that will build the main pro-cessing works associated with the 1.5 million metric tons per year biomass co-fi ring facility near the existing mega-power plant. The pro-cessing works will receive, handle, store and process various biomass materials ready for direct injection into the power station’s coal-fi red boilers.

“Delivering signifi cant fuel diversifi cation and carbon abatement is central to our busi-ness strategy,” says Dorothy Thompson, chief executive offi cer of Drax Power “Meeting our 10 percent co-fi ring target is key to achieving our goal of 15 percent carbon abatement, and this represents a major milestone in the execu-tion of our co-fi ring project. At Drax, we are only too well aware of the need to tackle cli-mate change, and we fi rmly believe that we are part of the solution. We have a role to play in the transition towards a low-carbon economy whilst delivering reliable supplies of electric-ity.” BIO

Ron Kotrba is a Biomass Magazine se-nior writer. Reach him at [email protected] or (701) 738-4942.

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FINANCE


Project Finance: Lender Perspectives and Development TrendsWhile economies around the world slow and credit options dwindle, the biomass-to energy industries keep churning forward. Capital exists for those looking to develop projects.

By Thomas M. Minnich

The claims and statements made in this article belong exclusively to the author(s) and do not necessarily refl ect the views of Biomass Magazine or its advertisers. All questions pertaining to this article should be directed to the author(s).

he current credit crisis creates an infl ated perception of credit risk when contemplating project fi -nancing in the biomass industry.

This perception, however, is often inaccu-rate. Project fi nance lenders employ rigor-ous credit analysis methods to minimize risk when dealing with issues including strin-gent fi nancial regulatory requirements, new biomass-to-energy power project sponsors, new independent power producer rules, and new biomass technologies and fuel sources.

Lenders’ ability to conduct thorough due diligence and credit analysis with the as-sistance of expert consultants makes proj-ect fi nance transactions, particularly in the power and energy sector, one of the safest asset classes today.

This article outlines the credit analysis process and provides insight into a typical lender’s credit rating methodology, with a focus on biomass-to-energy projects. The article identifi es key factors attracting lend-ers to a project and offers insight into lend-ers’ credit analysis methodology and loan covenants. Finally, the article discusses proj-ect development trends relative to power infrastructure in emerging economies and specifi c efforts by leading banks and inves-tors, particularly in the Asia-Pacifi c region.

Lender PerspectivesCorporate fi nance quantitative analysis

commonly uses internal rate of return and net present value as evaluation methods. These methods are useful in evaluating mu-tually exclusive projects—projects whose costs and economics are independent from

one another—from the perspective of the project sponsor.

Both internal rate of return and net present value evaluation techniques require a basic understanding of the cost of capital, which is the opportunity cost of future cash fl ows made by the fi rm. For example, if the cost of capital to a fi rm is 10 percent, the fi rm can either reinvest future cash fl ows in other projects that yield a 10 percent return, or it can repay capital originally borrowed at 10 percent interest. Cost of capital is also known as opportunity cost of capital or in-vestment hurdle rate.

Companies typically determine their cost of capital by calculating the company’s weighted average cost of capital, which establishes a blended opportunity cost of capital based on equity holders’ expected return and the cost of borrowed capital.

For a corporation with available fi nan-cial metrics, weighted average cost of capi-tal is typically calculated in several sequen-tial steps. The fi rst step is determining the project fi rm’s unlevered equity beta: Bunlevered = Blevered / [1 + (1-T) D/E], where T is the corporate tax rate, D is the value of corpo-rate debt and E is the value of corporate equity.

In many cases, the weighted average cost of capital method benchmarks un-levered equity betas from similar companies in the same business sector as an average sector weighted average cost of capital, then applies this average to the project company’s corporate structure: Bproject company = Bsector average * [1 + (1-T) D/E] project company .

The cost of equity is determined by

adjusting normal equity capital markets’ expected returns for the project company’s equity beta: CE = Bproject company *(market risk premium) + (risk-free rate), where CE is the cost of equity, the risk-free rate is the return on a guaranteed instrument such as a U.S. Treasury bond, and market risk premium is the average return performance over the risk-free rate from the capital markets (e.g., Standard & Poor’s 500 20-year return over U.S. government bond).

Weighted average cost of capital is then calculated as a weighted average of the cost of equity sources of capital and debt sources of capital: Weighted average cost of capital = , where CD is the cost of debt (ordinary borrowing rate on a similar bond rating class).

Weighted average cost of capital refl ects an expected return for future cash fl ows, assuming repayment of borrowed sources of capital and investment in projects with a return commensurate with the level of risk. However, the fl aw in using weighted aver-age cost of capital as a project hurdle rate is that it applies a corporate debt and equity structure, as well as an implicit risk factor, to a project that might have a much differ-ent debt, equity and risk profi le.

Firms wishing to maximize their lever-aging may instead establish a project special purpose vehicle, which is a separate cor-porate entity held off balance sheet of the parent company. A special purpose vehicle may have a limited amount of equity capi-tal contributed by the parent company but may raise a relatively large amount of debt capital by guaranteeing repayment from the

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project’s future cash fl ows and limiting re-course to the parent company. In this case, because debt is substantially higher than equity, calculated weighted average cost of capital would more closely approach the cost of borrowing rather than the cost of the parent corporation’s equity. Normally, though, weighted average cost of capital may not be calculated for a project special purpose vehicle because of the lack of pri-or performance data required for comput-ing the equity beta.

Weighted average cost of capital is commonly used as a reference return when corporations perform internal rate of re-turn and net present value calculations to evaluate a project. Net present value, which is the sum of future discounted cash fl ows from a project minus the capital outlay, may use weighted average cost of capital as the discount rate: Net present value =

- outlay.

If a project’s net present value is greater than zero, the project’s future cash fl ows minus its capital outlay exceeds the weighted average cost of capital return rate. Typically, the project should therefore be approved. However, managers making decisions based on a project’s net present value should consider the differences in the debt and equity structures of the project versus the corporation. This is particularly true in the case of borrowing capital spe-cifi cally for the project under a project fi -nance transaction.

Although net present value and internal rate of return are useful for project spon-sors when selecting project investments, banks use a different set of metrics when evaluating the attractiveness of lending capital to projects. The benefi ts implied by net present value are relative to the project sponsor and its equity holders. The benefi ts relative to a bank or debt issuer, however, are defi ned by the risk-adjusted return on capital. The risk-adjusted return on capital is a method developed by Bankers’ Trust in the 1970s to measure the anticipated return on capital considering the cost of regulatory capital (reserve requirement for loan loss coverage) and the fees earned by the lender on issuing the loan. Regulatory capital is cash and equity the bank must

keep in reserve to cover loan defaults and losses. It is therefore the opportunity cost of lending new capital. The risk-adjusted return on capital calculation enables banks to compute returns on regulatory capital by considering the borrower’s creditworthi-ness. This is usually determined by credit ratings and by historical default and recov-ery rates of similar entities.

Because risk-adjusted return on capital bases return on the amount of regulatory capital held in reserve, how does a bank de-termine the amount of the reserve? This amount is related to the risk profi le of the project, as explained in the following sec-tion.

Project Finance CreditThe elements of determining credit

risk for a project fi nance transaction can be used to attract favorable lending to proj-ects, particularly in the biomass-to-energy power sector. Credit that makes sense to project sponsors can be diffi cult to obtain. Insuffi cient experience and an incomplete-ly defi ned project may attract loans only from local banks with expensive interest rate terms. A properly defi ned project that can pass rigorous due diligence, however, can attract more favorable lending terms from international banks.

Credit risk assessment of a project special purpose vehicle is addressed by the Bank for International Settlements Basel Committee on Banking Supervision Pub-lication 118. The publication is the guide-line for the Basel II accord, the principles that govern overall capital markets regula-tion. Annex 6 of the document addresses evaluation criteria for specialized lending, including project fi nance.

A project feasibility study performed by a consultant specializing in biomass-to-energy projects typically identifi es basic transaction characteristics. A more ad-vanced consulting approach is usually re-quired to identify other supervisory crite-ria.In addition, legal counsel is commonly engaged to draft basic security terms, and supply and offtake contract terms.

Challenges to fi nancing biomass-to-energy projects include providing evidence of sponsor strength and comprehensive


offtake contract terms. Sponsor strength with common fossil fuel power plants is readily obtainable in most cases: legacy util-ity companies usually have an established regional presence and a deep management structure with relationships in the region. Biomass-to-energy power plants, on the other hand, are usually smaller, more en-trepreneurial ventures whose sponsors may have little or no experience in running a small-scale utility business. Two factors are paramount for seeking biomass proj-ect fi nance. The fi rst is transparent own-ership. The project sponsor must have a corporate structure with registered capital that can be readily reported to lenders. The project sponsor must also clearly identify board members, equity contributors and key management to satisfy banks’ Know Your Customer rules.

The second factor is a reputable man-agement team. The feasibility study or project fi nance documents must outline a management organizational chart to ad-dress project commissioning, operations and maintenance. The organization chart should include detailed position descrip-tions and identify individual managers with established experience in the biomass-to-energy and power sectors.

Project Development TrendsTwo key trends pertinent to biomass-

to-energy project development are dis-cussed below. The fi rst is power infrastruc-ture in emerging economies. Emerging economies, particularly in Asia-Pacifi c na-tions, are continually challenged by insuf-fi cient power supply to meet demand. The problem is magnifi ed in nations where ru-ral electricity is limited by physical barriers or political challenges.

Accordingly, many nations have estab-lished independent power producer frame-works that promote smaller, private-sector-owned power plant development while guaranteeing a connection to the national power transmission grid. These applica-tions, typically limited in size to approxi-mately 10 to 50 megawatts, create many opportunities for small power producers. In heavy agricultural regions or in coun-tries with national biofuels policies, the

availability of biomass fuel sources and the promise of independent power producer policy may create the ideal climate for in-vesting in biomass-to-energy projects.

The second key trend is in project fi -nance markets. The fi rst quarter of 2008 saw the highest-ever volume of project fi -nance transactions worldwide, with more than 125 transactions totaling $56.4 billion, according to the Thomson Financial First Quarter 2008 Global Project Finance Review. Recently, two subsets of the global project fi nance market have demonstrated consis-tent strength: the Asia-Pacifi c region and the power sector. Although Europe, the Middle East and Africa lead the world in volume (67 issues, $26.7 billion in loans), the Asia-Pacifi c region, with $23.3 billion in volume, has been beating its own quar-ter-by-quarter records. In fact, the region’s rate of increase in project fi nance transac-tions is the highest in the world.

In contrast, the Americas trail the global project fi nance market, with only $6.4 billion in loans. The important conclu-sion is to recognize that developing nations with relatively stable political climates, as in much of East Asia, are leading the deploy-ment of project fi nance capital.

The most active sector in recent quar-ters is the power sector. In the fi rst quarter of 2008, project fi nance transaction vol-umes in the power sector increased by 7.2 market share points relative to other sectors (total borrowed volume of $23.4 billion).

Despite the overall downturn in cred-it, biomass-to-energy project fi nancing is surging. Project lenders’ and specialty consultants’ use of the analysis methods discussed herein ensure that fi nancing for biomass-to-energy ventures will continue to provide stable returns on investment, particularly in the booming Asia-Pacifi c region. BIO

Thomas M. Minnich is director of Prime Capital Services Ltd. Reach him at [email protected] or (404) 425-7100.

FINANCE


PROCESS


Anaerobic OptionsThe use of anaerobic digesters on a small scale could provide localized energy sources while reducing the negative effects of greenhouse gases.

By Barnett Koven

The claims and statements made in this article belong exclusively to the author(s) and do not necessarily refl ect the views of Biomass Magazine or its advertisers. All questions pertaining to this article should be directed to the author(s).

oday’s volatile energy economy necessitates investment in viable, sustainable sources of energy. While many technologies ap-

pear to answer some of these requirements, anaerobic digestion is an especially promis-ing technology as it is effi cient, inexpensive and can be quickly scaled and implemented. In addition, anaerobic digestion is extremely environmentally friendly. All of these aspects make anaerobic digestion an ideal technology for our renewable energy future.

Anaerobic digestion is a naturally occur-ring biological process that uses microbes to break down organic material in the absence of oxygen. In engineered anaerobic digesters, the digestion of organic waste takes place in a special reactor, or enclosed chamber, where critical environmental conditions such as moisture content, temperature and pH levels can be controlled to maximize gas generation and waste decomposition rates.

Landfi lls generating noxious odors dem-onstrate the impact of organic waste digestion in a semi-enclosed environment with little or no oxygen. However, by using anaerobic di-gestion technology, odors are greatly reduced because the gases are captured. Commercial anaerobic digestion systems can replicate this natural process in an engineered reactor that produces methane gas much more quickly, in as little as two to three weeks compared to the 30 to 100 years required by the anaerobic conditions in a landfi ll.

Digester PrevalenceAnaerobic digestion systems designed

to process animal manure have been in wide-spread use for years in parts of the develop-ing world. Several hundred thousand digester

systems are estimated to operate in India, and several million are in use in China. In Europe, government incentives in the form of grants, low- and no-interest loans, and mandates that utility companies purchase the energy pro-duced at a premium (often two to four cents per kilowatt above market value), combined with rising energy prices have encouraged the development of anaerobic digestion plants, with more than 1,000 now in place. These digesters mostly serve waste management and odor control needs and provide limited energy generation, though several in Europe and Asia are net suppliers of energy to utility companies. Examples include the Kompogas plants in Kyoto, Japan, and Rostock, Germa-ny, as well as the Valorga International plants in Barcelona, Spain, and Hanover, Germany.

The use of anaerobic digestion technol-ogy is rapidly growing in the U.S. It is already a developing market within the agricultural industry. The technology is economically and environmentally benefi cial. The coun-try’s high demand for energy coupled with a concern for reducing its dependence on im-ported oil has driven the expansion in the use of electric power generated from methane. Other incentives include the desire to redi-rect organic waste from landfi lls. Anaerobic digestion optimizes the benefi ts of organic waste used for methane production and helps with the landfi ll shortage problem. Anaerobic digesters have a fi nancially attractive payback period (dependent on energy prices, subsi-dies and a number of other factors) when the methane gas is used to generate energy in the form of heat, steam or electricity. A proposed 10,000 tons per year plant servicing the industries at the Brooklyn Naval Yard had an anticipated return on investment of just

seven years as a result of signifi cant subsidi-zation by the New York Sustainable Energy Research and Development Authority. Larger plants can be even more profi table.

The Anaerobic ProcessWhen using a thermophilic process (a

higher temperature and more effi cient bac-teria), digestion takes place in four stages (Figure 1) plus a preliminary stage over 10 to 14 days. Prior to digestion, the feedstock enters the buffer or pretreatment tank where its temperature is raised and microbial activ-ity begins. After one day of pretreatment, the feedstock is released into the main digestion tank where the fi rst of the four steps—hy-drolysis—occurs, during which complex or-ganic molecules are broken down into simple sugars, amino acids and fatty acids with hy-droxyl groups. The second stage is known as acidogenesis, during which further break-down occurs producing ammonia, carbon dioxide and hydrogen sulfi de. The third stage is acetogenesis during which the products of acidogenesis are further digested to produce carbon dioxide, hydrogen and acetates, along with some higher-molecular weight organic salts.

Methanogenesis, the fourth and fi nal stage, produces methane, carbon dioxide and water. Methane and carbon dioxide are the main components of biogas (Figure 2). Ap-proximately 55 percent to 70 percent of the gas composition is expected to be methane.

Environmental, Other Benefi ts of Anaerobic Digestion

From an environmental standpoint, an-aerobic digestion has three main benefi ts. First, it is a waste-to-energy technology,

T

PROCESS


PROCESS

meaning that it converts waste materials and not food supplies or other usable products into energy. As a result, demand for power generated from anaerobic digestion will not affect resource markets or lead to poor land management practices as producers attempt to produce more of a resource on a given area of land to satisfy increased demand. In addition, as anaerobic digestion uses waste as its fuel source, it has the potential to divert large quantities of biodegradable waste away from landfi lls.

Second, anaerobic digestion is consid-ered carbon neutral by the U.S. EPA. Even though anaerobic digestion results in green-house gas emissions from the use of the methane portion of the biogas it creates, the effect is zero-sum. This occurs because the same amount of greenhouse gases would be emitted as the waste materials rotted in a landfi ll.

Finally, anaerobic digestion results in a fertilizer-like byproduct rich in nitrogen and phosphorus, making it ideal for land applica-tion. When created through a thermophilic process, the fertilizer-like byproduct receives

the U.S. EPA Class A Pathogen-Free desig-nation. The high operating temperatures and 10-plus day retention time mean that it is safe for immediate land application even on fi elds that are growing crops for human consump-tion. The byproduct or effl uent can be sepa-rated, using even a simple dewatering screw, into liquid and solid fractions. The liquid fraction can be applied using a farm’s exist-ing irrigation system while the solid fraction must be applied manually. A study conducted by Cornell University’s Manure Management Program examined J.J. Farber Dairy, a farm located in the New York City watershed that produces approximately 11,000 pounds of effl uent per year and is using both fractions of the effl uent, saving an estimated $13,000 per year. The byproduct could potentially curb demand for commercial fertilizers, the production of which requires large amounts of energy and the use of which puts out greenhouse gases.

In addition to the environmental ben-efi ts of anaerobic digestion, the technology benefi ts from being an extremely simple means of harnessing energy which is eas-

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Figure 1. The anaerobic digestion process typically consists of four steps.

Complex organic matterCarbohydrates, proteins, fats

1. Hydrolysis

Soluble organic moleculesSugars, amino acids, fatty acids

2. Fermentation

Volatile fatty acids

3. Acetogenesis

4. Methanogenesis

CH2 + CO2

Acetic acid CO2 + H2

SOURCE: BARNETT KOVEN


ily scalable. From an economic standpoint, larger units that serve municipalities or large farms are more cost effective. Larger units benefi t from economies of scale for two reasons. First, the material costs for a plant only double as a result of a fourfold increase in capacity. For example, a digester that’s 10 feet tall and 10 feet in diameter requires ap-proximately 314 square feet of construction material and has a volume of approximately 785 cubic feet. A digester 10 feet tall and 20 feet in diameter requires approximately 628 square feet of construction material and has a volume of approximately 3,140 cubic feet.

Second, as a result of automation, even an extremely signifi cant increase in plant size requires minimal additional labor. There-fore, the marginal cost for each additional unit of capacity is much less than the mar-ginal revenues resulting from the additional unit of capacity.

However, units can be built effi ciently to serve individual households. Regardless of the size, the general design is similar, the main difference being the level of automa-tion. A municipal unit would likely be fully automated while a household unit would be manually operated.

Because of the simplicity of the reac-tor design, a household-sized unit can be built by anyone with a basic knowledge of plumbing and access to a CNC router and sonic welder.

Household-sized units would run on food and garden waste (sewage could be vi-able but would be less effi cient because of the high moisture content and will likely not be permissible under most health codes) and could provide for a small portion of the home’s electrical demand as the biogas can be combusted in a slightly modifi ed re-ciprocating engine and easily converted into electrical energy. More signifi cantly, the unit could provide for household heating require-ments. The liquid fraction of the effl uent, which comes off the process at approxi-mately 125 degrees Fahrenheit (for thermo-philic systems), is hot enough to be pumped under the fl oor of a small house to provide radiant heating. This has already been done on farms to heat livestock barns. It could also be used in a closed system to heat clean water. I anticipate that it would be possible to construct a household digester for ap-proximately $1,000, not including the cost of the reciprocating engine or other generation equipment

Small-scale digesters would be especial-ly valuable in parts of the developing world where grid access is limited or nonexistent. BIO

Barnett Koven is a representative to the United Nations for World Information Transfer, an environmentally focused non-governmental organization. Reach him at [email protected].

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Biogas property component

Methane

Carbon dioxide

Trace components(include hydrogen, hydrogen sulfi de, nitrogen, non-methane volatile organic compounds, halocarbons)

Natural gas (percent)

95

1

4

Biogas (percent)

60-80

20-40

2

Figure 2. Biogas properties as compared to the properties of pipeline-quality natural gasSOURCE: BARNETT KOVEN


EERCUPDATE

Much of the recent debate about biofuel viabil-ity has focused on the competition between crop use for food production and crop use for energy produc-tion. This has inspired a pursuit of nonfood biofuel feedstocks. The term “nonfood feedstocks,” although used by many to clearly defi ne a better alternative to corn and soybeans as biofuel feedstocks, simply does not capture the complexity of the relationship between biofuel feedstocks and traditional agricultural produc-tion.

It is easy to recognize that if a farmer raises corn or soybeans for the production of biofuels that those bushels will not be used to satisfy demand in the hu-man food chain. What might not be so readily appar-ent is that if those same acres of land were utilized to raise industrial oil crops (e.g., jatropha or crambe) or energy crops such as switchgrass, there is an indi-rect impact on the human food chain. These impacts can range from complete substitution of acreage from food production to energy production, such as with switchgrass, to fractional food loss when oilseeds are used to supply industrial oils for fuel as well as oilseed meal for livestock feed.

The following is a summary of some nonfood biofuel feedstocks and considerations regarding their impact on food production.

When people think about oilseeds, crops such as soybean and canola typically come to mind. However, numerous other oilseed crops do not compete directly with soybeans. Typically, these nonfood oilseed crops have oil or meal characteristics that make them unpal-atable or, in some cases, toxic. Crambe, camelina and jatropha are examples of oilseed crops that do not have a traditional food market. However, their oils can be used for biofuel production while supplying meal for livestock feed. In the case of jatropha, some variet-ies are known to have a toxic meal that animals will not eat. These crops have the potential to provide biofuel feedstocks while augmenting the food supply for ani-mal feed.

Crop residue such as corn stalks and wheat straw are nonfood feedstocks that do not impact food pro-duction. They truly are coproducts of food production that can have utility for energy via combustion, gasifi ca-tion or enzymatic/fermentation to alcohol. Challenges with the widespread use of crop residue for fuel production are twofold: 1) the low-density nature of the material and 2) the impact on soil health. The time and cost associated with collecting and de-livering crop residue will require careful evaluation. Studies con-ducted by the USDA and others focused on the relationship be-tween crop residue and soil health have indicated that not all crop residue should be removed from the fi eld.

Crops grown exclusively for energy production in-clude switchgrass and fast-growing species of poplar, among others. These crops directly replace acres that could otherwise be used for growing crops (except if grown on Conservation Reserve Program land). Typi-cally, however, energy crops require fewer inputs such as water or fertilizer and can be grown on land not suitable for many food crops.

Algae and aquaculture offer many advantages in the search for sustainable, renewable bioenergy feed-stocks. Algae have the potential to provide orders of magnitude more oil per acre of land than traditional oil seed crops. Further, algae can be grown in arid cli-mates with brackish water or sea water. Lastly, algae use as nutrients those things we typically view as pollut-ants, such as carbon dioxide from the air and nitrogen compounds in water. Unfortunately, the cost of grow-ing algae today is too high to support fuel production alone. BIO

Brad Stevens is a research manager at the EERC. Reach him at [email protected] or (701) 777-5293.

Biofuels Sustainability: A Nonfood Feedstock Primer

Stevens


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