30 million gallon plant in Nevada, Iowa will expand central Iowa’s energy exports, add to local grower economy.
In Iowa, DuPont broke ground today on its $200 million, 30 million gallon cellulosic biofuels facility in Nevada, Iowa. Expected to be completed in mid-2014, the new facility produce cellulosic ethanol from corn stover. Iowa Governor Terry Branstad was on hand to celebrate the official beginning of construction on the facility, adjacent to the Lincolnway Energy grain ethanol plant.
“This site in Nevada is the next critical step in our cellulosic ethanol journey. We look forward to bringing these advanced technologies online, creating local jobs and helping to deliver clean, sustainable energy,” said Governor Branstad.
Local impact and energy independence
With a local population of 6,900 and a local demand of 3 million gallons of gasoline, with the opening of the new plant, Nevada will become the largest producer of cellulosic biofuels in the world when the plant is completed, and a significant energy exporter. Combined with the 100 million gallons nameplate capacity at adjacent Lincolnway Energy, the town will produce 130 million gallons per year of biofuels.
The economic impact of the project will range far beyond its effect on energy independence. To supply the corn stover for its plant, DuPont will contract with more than 500 local farmers to gather, store and deliver over 375,000 dry tons of stover per year into the Nevada facility. If stover is priced at $50-$60 per ton, that will generate $1.75-$22.5 million in additional income in a 30 mile radius around the new facility, where stover will be harvested off of 190,000 acres.
In addition to the estimated 60 full-time plant operations jobs, there will be over 150 individuals involved in the collection, stacking, transportation and storage of the stover feedstock seasonally during each harvest.
For many corn growers, residue management is a major challenge when maximizing their potential grain yield. Leftover corn stover interferes with planting, delays stand establishment, monopolizes nitrogen in the soil and often harbors damaging insect, pests and pathogens. Some stover from the corn crop is left on the field to protect the soil from erosion.
“Many of us who have participated in the stover harvest program with DuPont are already seeing benefits of this alternative residue management strategy including positive effects on grain yields the following year on our fields,” said Jim Hill, a corn grower whose stover will be used to supply DuPont’s biorefinery. “We’re excited to work with DuPont to supply stover to this new biorefinery, partner to discover new markets for our products and co-products and develop new crop production techniques based on the opportunity to manage residues thru partial stover removal.”
The nameplate capacity and capex
Originally, the plant has been slated for a nameplate capacity of 28 million gallons – now upped to 30 million after process improvements based on data derived from Dupont’s pilot facility in Vonore, Tennessee.
Overall, the $200 million plant will cost $6.66 per installed gallon, well below cost estimates that have been used by the USDA and other organizations in estimating the cost of expanding cellulosic biofuels capacity. “Nearly a decade ago, DuPont set out to develop innovative technology that would result in low capital and low-cost cellulosic ethanol production,” said James C. Collins, president, DuPont Industrial Biosciences.
“By leveraging DuPont Pioneer corn production expertise and designing an integrated technology platform, we’ve built an affordable and sustainable entry point into this new industry. And we didn’t get to this point alone. We’ve built an incredible partnership with the state of Iowa, Iowa State University, entrepreneurial growers and a whole host of partners around the country who share our vision of making renewable fuels a commercial reality.”
Expansion from Nevada: reducing technology and feedstock risk
“Weve been licensing chemical technology in polymers and plastics for a long time,” noted Collins. “and so we understand and will make the typical technology guarantees that customers need. For example, that the process will make ethanol, and at these kinds of rates.
Some companies we have been talking to already have the supply chain established, some less so. We now have three years work in working with local growers and Iowa State in how to sustainably remove stover – and we will share that experience with customers in helping to manage supply chain management development and risk. But it’s not one size fits all.”
The integrated model
“We know the technology risk is there, for any new industrial process and this is no exception,” said Collins. “But we think we have minimized a lot of risk with our intergrated approach, where we bring a technology, enzymes, and supply chain expertise. We are more like Apple, as opposed to the Dell model where you get chip from Intel, software from Microsoft and so on. I think we have seen, in the moves seen in the marketplace in the past year, that enzyme companies and processing technologies are coming together in a validation of that model.”
Addressing market risk: RFS2 going forward
“There’s still a tough debate around RFS and the waiver,” Collins said. “There’s still uncertainty around RFS, although less now then in the past. But it’s important to keep the pressure on with Fuels America, and also for companies like ourselves, Poet-DSM, and Abengoa to share positive progress to help policymakers see the benefits.”
One of the key dependencies in this project is stover – sustainable harvest, storage and affordable transportation to the plant.
“We worked with 50 growers this past year, Dupont leased the harvest equipment to work with them, totaling 15000 acres, from which we harvested 30000 tons,” Collins said.
“For now, we think that the group that owns the plant, will own the equipment and work with growers to harvest. As a next wave, you’ll see specialists and they work their way across the country, to bale, stack and stage — or even some entrepreneurial growers that are willing to invest in the equipment, which requires heavier gauge balers than for wheat straw.
“Further down the line, we see a lot of progress with John Deere on the development of a single pass system for corn and stover harvest.
One of the concerns that has been expressed with the use of stover is the problem of having to harvest all at once and store all year – not only the cost and logistics of storage, but the problem of stover pre-fermenting. How does it work?
“Bales are stacked at field edge at harvest, then moved to distributed staging 20-30 locations in a radius around the plant- that’s the intermediate storage. The key is not to move them around a lot – to stay in the staged area until needed. Overall, there’s 375000 tons of stover, or 1 bale every minute, 600,000 bales a year. We’ll bring those as needed.
On pre-fermentation? Collins is not worried. “ISU has been core testing bales, and we have three years of data. We get some bale breakage, and little bit of spike where we lose 2-3 percent of biomass the first month. But the spike is minor and goes away, unless you store too wet, where it can ferment a little on you.
DuPont will further adapt its cellulosic ethanol technology to additional feedstocks. It is already processing switchgrass in the testing facility it owns jointly with the University of Tennessee near Knoxville, Tenn.
A peer reviewed life cycle assessment of the DuPont biorefinery and supply chain indicates a potential greater than 100 percent reduction in greenhouse gas emissions compared to gasoline. This significant greenhouse gas reduction is enabled by use of cellulosic co-products as a source of renewable energy. The DuPont biorefinery co-product is a material that can displace coal in facilities currently burning this fossil fuel.
“We are excited to explore the various synergies between Lincolnway and DuPont that bring value to both companies. One area is the possibility of using DuPont’s cellulosic ethanol co-product to replace our coal usage,” said Lincolnway Energy Chairman Jeff Taylor. “We strive to continually improve our operations and environmental impact. Replacing our fossil fuels with this renewable cellulosic ethanol co-product to generate heat and power makes great sense. It is generated right next door, would reduce our coal usage and the transportation costs of shipping coal cars almost a thousand miles.”
The bottom line
When completed, it is expected to be the world’s largest cellulosic ethanol facility – a key part of that first wave of plants from Beta Renewables-Novozymes, POET-DSM, Mascoma and Abengoa that is expected to bring 100 million gallons of capacity online in 2013-14.
For sure, the big name lies not in the first 100 million gallons, but the expansion. There, an interesting horse race is lining up, especially between Beta-Novozymes and DuPont which have both adopted the licensing model (Abengoa and POET-DSM, for the moment, are focused on build, own and operate in association with their considerable grain ethanol fleets).
Common to both the Beta-Novozymes and DuPont approaches – integration of enzymes and process technology – and an emphasis on low capex. That appears, at this stage, to be the winning combination – but the next step – selling and executing on licenses, is just getting underway.
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