Beta Renewables, Biochemtex ink deal for commercial-scale cellulosic biofuels project in Slovakia

October 6, 2014 |

beta-renewablesCellulosic leaders sign with Energochemica for the construction of a 2nd Generation Ethanol plant in the Slovak Republic.

In Italy, Biochemtex and Beta Renewables announced an agreement with Energochemica SE for the construction of a 16.5 million gallon (55,000 ton per year) cellulosic ethanol plant. The plant, which will be constructed in Strazske, Slovak Republic, will also generate power and steam. The project is commencing immediately and the start-up of the plant is anticipated for the first half of 2017. The plant will utilize non-food biomass as its feedstock and is expected to deliver “cost-competitive ethanol” according to the project sponsors.

Biochemtex will provide basic engineering, key equipment and technical field services, and will use Beta’s PROESA technology. ENERGOCHEMICA SE is a holding company established in Prague in 2011 —with holdings including FORTISCHEM, Chemko, TP2, PTCHEM, and Light Stabilizers.

Beta Renewables_Cellulosic Ethanol Deliveries_2

The plant will use enzymes from Novozymes and yeast from Leaf Technologies. Novozymes and Leaf Technologies are long-term partners of Beta Renewables and their role is crucial for PROESA technology. The Energy Block, by using the lignin produced as a by-product of the PROESA technology, will generate all power and steam necessary to the plant and will sell the additional energy to the grid.

beta-renewable

“We look at our deal with ENERGOCHEMICA SE as an important step to develop second generation bioethanol activities in Europe,” said Guido Ghisolfi, CEO and President of Beta Renewables and Biochemtex. “We believe that PROESATM technology will let producers see superior returns on their investments, while meeting the EU targets of 10% renewable energy in transport by 2020. The Strazske plant will be the third in the world based on PROESA technology, following Crescentino, Italy, and Alagoas, Brazil.”

Beta Renewables

Two weeks ago as the Slovakian deal was being finalized, CEO Guido Ghisolfi spoke with the Digest about feedstocks, technology and economics.

More on the Feedstocks

BD. Let’s start with the supply chains — and feedstocks. Many have aimed at low-cost sources like municipal solid waste, while you’ve been focused on agricultural residues and energy crops as well. which come at a higher cost.
GG: All feedstocks are fine, as long as you have a clean output. But that’s the problem. The challenge as we have seen it is that when you take a feedstock for free, the art of handling is passed to a company like ours, and we take on the challenge of purification. So, some feedstocks are “free”, but not really free.

BD: You’ve been outspoken on biomass handling, and not a big fan of being “feedstock agnostic”, citing costs. Can you give an example to illustrate?
GG: One of the first consequential decisions that has to be made in a system is what is accepted in the feedstock. For example, bale size, You have round bales, square bale, even small bales. It costs an additional $15-$20 million to handle “any size of bale”.

And there’s a cost in obtaining “good clean biomass”, too. Nothing that comes off an agricultural field is going to come in without rocks and dirt, so another decision is how much you wash, and how you do it. With cleaner biomass, you spend less energy processing rocks and dirt — so there’s a trade-off between investing more to clean it, or spending more later on to work with a less pure feedstock. We finally concluded that it was better to add a new intensive washing step, which we are implementing right now in Crescentino.

BD: Does putting more moisture back into the feedstock cost you anything later on when you have to move it, and process it?
GG: We add water anyway for the hydrolysis. Straw comes in 88% dry and stover is 75% dry, so we’re not going to process it that dry.

More on the Process Economics

BD: How do the operating economics work for you?
GG: In our process, we start with 5 tons of biomass. We make a ton of ethanol, we have a 1.1. tons of CO2 and other gases, and 0.5 tons of stillage (brown organic water at around 10% organic material content), and the rest is mostly lignin cake. So what we really create in a plant is ethanol, lignin cake and stillage, and the business lies in finding the most value in each of those.

BD: In many cases, the lignin is used by the plant to provide power and stream, and the value of the materials is in the ethanol. Your technology places a lot of emphasis on green electricity, as does technology from INEOS Bio. Why?
GG: In our system, we build an anaerobic digester, which converts the stillage to gas which we burn to provide steam to the plant. We obtain more than 4MWh of power from the lignin per ton of biomass, and we have about 3.3MWh left over after we have provided the power for the process. That has real value, depending on the market.

BD: So, you look at this as a plant that makes two products, ethanol and green electricity, when it comes to looking for locations with optimal economics.
GG: It comes down to a simple equation:
B + 350 – E = C, where B is the cost per ton for biomass and you have five tons, 350 per ton is the operating cost for that biomass, E is the value of green electricity you produce, and C is the cost you have in bringing ethanol to the market.

BD: Can you give us an example?
GG: Here we are at Crescentino, in Italy. The value of green electricity is $200 per MWh and the cost of biomass is $100 per metric ton. So you have:

B + 350 – E = C
500 + 350 – 660 = C
500 is 5 tons of biomass at $100 per ton, and $660 is 3.3 MWh of green electricity at $200 per MWh.
190 = C
So, the cost you have for ethanol is $190 per ton, or around $0.55 per gallon.

Even with your capex, you are going to make money with this plant.

In Brazil, it works like this, where biomass is $30 per ton, and the green electricity is $150 per MWh.

B + 350 – E = C
150 + 350 – 500 = C
150 is 5 tons of biomass at $30 per ton, and $500 is 3.3 MWh of green electricity at $150 per MWh.
0 = C
So, Brazil is zero cash cost for the ethanol, and what you make s your EBITDA after you have accounted for your capex.

BD: How does this work elsewhere in the EU? What about the US or China, where you have been active?
GG: For France biomass is $60 per ton, and the green electricity is $150 per MWh.
B + 350 – E = C
300 + 350 – 500 = C
So, in France the cost is $150 per ton of ethanol, and the value is around $630 per ton.

In China, the biomass is $40 per ton, and the green electricity is $125 per MWh.
B + 350 – E = C
200 + 350 – 414 = C
So, in China the cost is $236 per ton of ethanol, and in China, cellulosic ethanol is valuable because you can’t make ethanol from corn or other food crops.

In California, the biomass is $100 per ton (Canergy says it will be $80 in their view, and that makes the project better), and the green electricity is $100 per MWh.
B + 350 – E = C
400 + 350 – 330 = C

So, in California the cost is $420 per ton of ethanol, or $1.25 per gallon. With an LCFS in place, you can make the economics work there too. Any where you have a price for green electricity, you can find value.

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