55 Mgy Green Plains Renewable Energy corn ethanol plant launches in Iowa

In Iowa, the 55 Mgy Green Plains Renewable Energy corn ethanol plant in Superior commenced production, and will supply California, New York and Florida markets with ethanol fuel as well as local markets with wet distillers grains and a broader market with dried distiller grains.  The plant expects to spend up to $130 million per year to acquire 18-20 million bushels of corn, at $6.50 to $7.22 per bushel.

Green Plains background

Earlier this year, Green Plains Renewable Energy and VBV announced that they will merge into a 330 Mgy ethanol producer. VBV owns a majority stake in two 110 Mgy corn ethanol projects slated for completion this year, Indiana Bio-Energy and Ethanol Grain Processors in Tennessee.

Green Plains Renewable Energy received a $2.19 million grant last month from the Iowa Power Fund for algae-related development. Details over licensing and royalties remain to be worked out in coming weeks. The grant will fund 75 percent of a $2.8 million, 195-day algae production trial that will produce 1.6 tons of algae biomass. A second phase costing $4.2 million would produce a half-ton per week of algae biomass, and a third phase costing $80 million for a commercial scale plant would produce 1700 pounds per hectare per day of biomass.

Last February, members of the Great Lakes Cooperative approved a merger with Green Plains Renewable Energy by a vote of 718 to 174. The Cooperative, which recorded $146 million in revenues in 2007, specializes in grain, feed and fuel products in Iowa and Minnesota with operations in seven northern Iowa locations. The merger gives Green Plains access to a reliable supply of corn for its biofuel production stream.

Green Plains Renewable Energy (GPRE) and the Great Lakes co-operative announced the potential merger last September, in an agreement that brought together Great Lakes’ corn production capacity with Green Plains’ manufacturing, financial and marketing capabilities.

The origin of the deal is reported to be efforts by Great Lakes to provide corn for Green Plains’ 50 Mgy Superior, IA plant, scheduled to open in 2008. The company opened its 50 Mgy corn ethanol plant at Shenandoah, IA last year.

Under the merger agreement, co-op members will receive a combination of cash and stock.

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