Abengoa Bioenergy: Biofuels Digest’s 2015 5-Minute Guide

The company is active in three areas in biofuels:

a. Traditional fermentation of cereal grains and sugar cane for the commercial production of bioethanol

b. Traditional transesterification for the production of biodiesel from cereal and vegetable oils.

c. Commercial scale cellulosic fuel production.

Overall, the company has €7256 in sales, 24,000 employees and €1.365 in EBITDA. The company says: ”We specialize in carrying out complex turn-key projects for solar-thermal plants, solar-gas hybrid plants, conventional generation plants, biofuels plants and water infrastructures, as well as large-scale desalination plants and transmission lines, among others.”

Rankings

50 Hottest Companies in Bioenergy: #10, 2013-14

The Situation

Last October (2014), Abengoa Bioenergy officially opened what is for the time being the world’s largest cellulosic biorefinery in Hugoton, surrounded by dignitaries such as US Energy Secretary Ernest Moniz, Kansas Governor Sam Brownback, Kansas senior Senator Pat Roberts, former Interior Secretary Ken Salazar, former Energy Secretary Bill Richardson among many others.

The second generation cellulosic ethanol plant in Hugoton, Kansas, located about 90 miles southwest of Dodge City finished construction in mid-August and began producing cellulosic ethanol at the end of September with the capacity to produce up to 25 million gallons per year.

The plant utilizes corn stover residues that do not compete with food or feed grain. The state-of-the-art facility also features an electricity cogeneration component allowing it to operate as a self-sufficient renewable energy producer. By utilizing residual biomass solids from the ethanol conversion process, the plant generates 21 megawatts (MW) of electricity – enough to power itself and provide 4-5 megawatts of renewable power to the local Stevens County community.

At full capacity, the Hugoton facility will process 1,000 tons per day of biomass, most of which is harvested within a 50-mile radius each year – providing $17 million per year of extra income for local farmers whose agricultural waste would otherwise have little or no value. Of that biomass, more than 80 percent is expected to consist of irrigated corn stover, with the remainder comprised of wheat straw, milo stubble and switchgrass.

Abengoa has identified the U.S. market as “the most important market for the company,” according to chief executive Manuel Sanchez Ortega. “Today it represents the top geography in terms of revenues. One-third of our business is in the U.S.” The company, which recently listed itself on the NASDAQ marketplace, is currently due onstream at its Hugoton, Kansas ethanol plant late this year or early 2014.

Meanwhile, the company last week (January 2015) signed a pact with infrastructure investor EIG Global Energy Partners have entered into a non-binding agreement with the objective of jointly investing in a New Company (Newco) for the development of the already contracted portfolio of Abengoa’s projects under construction. EIG is a leading specialist investor in energy and energy-related infrastructure based in Washington, DC with approximately US$15 billion under management.

A portfolio of projects has been defined including conventional generation and renewable energy assets and transmission lines in different geographies, including US, Mexico, Brazil and Chile for a total investment amount above US$9.5 billion, including equity and non-recourse debt.

Fuel Type

Bioethanol, biodiesel.

Major investors

Parent Company is public (ABG) on the Madrid (SIBE) exchange.

Past milestones

In December 2014, the Brazilian National Bank for Economic and Social Development (BNDES) approved $223.38 in financing for four sugarcane projects. The largest announced financing is for Abengoa Bioenergy SA Agribusiness, which will receive $116.8M to implement its second-generation ethanol plant. The new project will be integrated with the Usina São Luiz first-generation ethanol plant in Pirassununga, in São Paulo state. The project will result in the fourth 2G ethanol plant in Brazil (after the first two from GranBio, and a new plant just commissioned by Raizen). The plant will have a nominal capacity of 64 million liters per year (16.93 million gallons). With this new investment, the capacity 2G ethanol production in Brazil will reach almost 200 million liters per year, BNDES said.

In June 2014, Deinove announced a 36-month collaboration agreement with Abengoa, with the support of Bpifrance, to develop at industrial scale DEINOVE’s consolidated bioprocess (CBP) using Deinococcus bacterium, to digest and convert agricultural residues to ethanol at a competitive cost. Performances obtained with substrates supplied to Deinove by Abengoa will be evaluated in order to set up a process that can be implemented, subject to adequate performance, in full-size factories.

In September 2013, the company said that it is looking to launch its MSW-to-ethanol technology at commercial scale by processing the entire city waste produced in Seville. The facility will produce 28 million liters of biofuel per year from half a million metric tons of waste. Construction cost for the plant is expected at around

In July 2013, Abengoa inaugurated its demonstration waste-to-biofuels plant, with a capacity to treat 25,000 tons of municipal solid waste from which it will obtain up to 1.5 million liters (400,000 gallons per year) of ethanol.

The demonstration plant, located in Babilafuente (Salamanca, Spain) uses waste-to-biofuels technology developed by Abengoa to produce second-generation biofuels from MSW using a fermentation and enzymatic hydrolysis treatment. During the transformation process, the organic matter is treated in various ways to produce organic fiber that is rich in cellulose and hemicellulose, which is subsequently converted into ethanol.

Future milestones

First Brazilian project

Additional commercial-scale projects in the US and abroad

Business model

Owner / Operator

Competitive edge

Distribution (own marketing company), economies of scale provides low-cost, quality (only Fuel Ethanol company that is registered to ISO-9001), locations (three continents), R&D investments.

Distribution, research, marketing or production partnerships or alliances

Industrial Partners

• NatureWorks

• Novus International

• Monsanto

• Genencor

• Dyadic

Universities

• Auburn University

• Kansas State University

• University of Concepción

• University of Buenos Aires

• Lund University

• University of Sevilla

• University of Nebraska

Research Centers

• Asociación de Investigación y Cooperación Industrial de Andalucía –AICIA

• Centro de Investigaciones Energeticas, Medioambientales y Tecnologicas – CIEMAT

• National Renewable Energy Laboratory – NREL

• Pacific Northwest National Laboratory – PNL

• Argonne National Laboratory – ANL

• Instituto Catalysis y Petroquimicos – ICP

• Instituto Tecnologico de Aragon – ITA

• Centro de Investigacion y Desarrollo en Automocion – CIDAUT

• Washington University – St. Louis

• UOP

Company website