Go Bionic: Top 10 Bolt-ons, retrofits adding power, performance to the first-gen biofuels fleet

May 22, 2013 |

supermanGreat Scott! Hot new technologies are turning ethanol plants from beleaguered bastions of first-gen fuels into hot properties for deploying advanced strategies.

Who, how, and where?

As you likely know, young Superman learned his trade on a Smallville, Kansas corn farm. But these days, first-gen biofuels plants themselves — from the corn belt to Brazil’s Cane Country, are going bionic.

New suites of biotech “exoskeletons” — developed by partners like Iogen, Butamax, Gevo, Sweetwater Energy, Renmatix, Virdia, Edeniq, NexSteppe, Ceres, Agrivida, POET-DSM, Beta Renewables and more — are turning challenged first-gen facilities into hot performers in both carbon and financial terms.

Why are first-gen plants adopting the new high-tech in record numbers? We can think of four big reasons.

1. Save time, money and aggravation. As much as 90% of project costs are unrelated to core technologies — they represent investment in land, water, power, piping, safety, administration buildings, feedstock storage and logistics, distillation, pretreatment and more – facets that can often be shared between a first-generation plant and next-gen.

2. Bigger addressable market. If your first-gen products, such as ethanol, have infrastructure challenges, your next-gen products, like perhaps biodiesel, or drop-in renewable fuels or chemicals, or biobutanol — may be far less near a blend wall.

3. High RIN values. New processes can make it possible for first-gen plants to qualify for the advanced biofuels or cellulosic biofuels pools and the higher-value renewable fuel credits — either for the full-production, or for add-on gallons.

4. Lower carbon footprint. Changing or adding technologies or feedstocks can reduce the direct carbon footprint, and provide less exposure to carbon penalties like indirect land use change.

The opportunities are considerable. First-generation biofuels technology in the US and Brazil alone represents more than 20 billion gallons of installed capacity – and nearly 30 billion gallons around the world. So, let’s look at the top 10 exoskeleton strategies – who’s developing what, for whom, and why?

1. Cellulosic – first gen hybrids

This is the POET-DSM route. Take a 100 million gallon traditional ethanol plant in Emmetsburg. Start bringing in the corn stover as well as the corn kernels – add-on some highly cool enzymatic hydrolysis technologies and – voila – you have 25 million gallons of bolt-on production, same grower base, same location. More on the latest with POET-DSM, here.

But it applies equally to Brazil, where companies are beginning to add-on cellulosic processing capabilities, essentially to focus on adding value to sugarcane bagasse (currently burned, inefficiently, for power generation).

Three players on this path? GranBio’s financing round is complete this month for Brazil’s first commercial scale second generation ethanol plant. The project will use Beta Renewables’s technology for the 22 mgy bagasse and sugarcane crop residue plant.

Last month, we reported that the UK’s TMO has signed an MOU with Usina Santa Maria to jointly invest $30 million in the company’s first cellulosic ethanol plant in Brazil. The 10 million liter facility would use bagasse supplied from the mill under a 20 year feedstock supply agreement and could come online as soon as 2014.

In March, we reported that Raizen will invest $102 million in an add-on cellulosic ethanol plant that will be attached to its Costa Pinto facility in Piracicaba. The 40 million liter per year bagasse-based facility may begin production as soon as next year – Iogen is the technology partner.

2. Technology Switcheroo – Corn to Cellulosic migration

Corn to cellulosic is a term developed by Edeniq and Logos for their project in Visalia, CA.  In this case, instead of add-ons, there’s outright migration from unaffordable feedstock to affordable.

The Corn-to-Cellulosic Migration plant utilizes Edeniq’s proprietary technology to process over one metric ton of cellulosic feedstock per day to cellulosic ethanol, exceeding the plant’s initial target. This month, we reported that the project completed a successful “performance test” that exceeded the benchmark of  1,000 hours of continuous operation.

But there’s more afoot in the outright conversion sector than the Edeniq/Logos project. Up in Washington state, we reported earlier this month that  Advanced Biofuels Corp. has bought a 7 million gallon per year first generation ethanol plant and plans to re-fit it into an advanced biofuel facility using Bio-Process Innovation Inc technology. The refitted plant will produce 6 million gallon per year cellulosic ethanol plant from wheat straw including producing 1 million gallons from waste ethanol.

3. Feedstock add-ons

In this case, the processing technology remains essentially the same — but new technologies are bringing in an expanded supply of sugars that will allow plants to process all year long, in the base of Brazil where sweet sorghum can be grown during cane’s off-season. Or, cellulosic sugars can replace the most expensive portion of first-gen feedstock (often, corn bought from grain elevators instead of via direct grower contracting).

Exemplar? In January, Sweetwater Energy announced a 15-year commercial agreement with Colorado-based Front Range Energy, to supply renewable sugars for up to 3.6 million gallons of cellulosic ethanol per year during the initial phase of the relationship at Front Range’s current corn-ethanol facility. The agreement has a total potential value in excess of $100 million, and requires a minimal capital outlay by Front Range while stabilizing the company’s feedstock costs. The announcement mirrors a deal inked earlier with Ace Ethanol.

Down in Brazil, the hot topic is adding sweet sorghum capacity.

Last month, at the Advanced Biofuels Leadership Conference (ABLC), NexSteppe announced the launch of its first sorghum hybrid products in the U.S. and in Brazil. NexSteppe’s new Malibu sweet sorghum hybrids and Palo Alto high biomass sorghum hybrids offer a tailored alternative for companies seeking a cost-effective feedstock solution for the production of advanced and cellulosic biofuels, biopower and biobased products.

At the same time Ceres is looking for final yield data from 3000 hectares planted in Brazil.  The trials have previously demonstrated large increases in biomass, extractable juice volume and total harvestable sugar compared to commercial products introducedin 2011. Hybrids yields have averaged 80 or more metric tons per hectare.

But the strategy is not limited to the ethanol side. There’s biodiesel, too.

Earlier this month, we reported that Renewable Energy Group executed a purchase agreement to acquire a 30-million gallon per year capacity biodiesel plant from Soy Energy. The Mason City plant, originally built to process highly refined raw materials in 2006, was upgraded in 2010 to utilize a larger variety of raw materials including animal fats and used cooking oil. REG plans to repair then re-start the refinery and further upgrade the plant in the future. That’s part of the REG strategy — use it’s high technology to add value to existing biodiesel assets.

4. Feedstock switching. Sorghum as the new corn?

As we saw in “The New Milo-naires: Corn, Milo and the Biofuels Market’s Invisible Hand”.

Aemetis (AMTX:OTC) operates a 60 mgy corn ethanol plant which imported milo from Argentina in Q4 2012 at a cost savings of about $0.90 per bushel under corn. They require approximately 22 million bushels per year at capacity, so the milo savings are more than $18 million per year.

Add $18 million to the $24 million per year AB RIN’s, subtract about $8 million for the increased cost of biogas, and the net increase in cash flow is about $34 million per year for the 60 mgy (former) corn ethanol plant operated by Aemetis.

5. Advanced corn oil extraction and yield technologies

Back in February, we reported that Edeniq and Pacific Ethanol entered into an agreement to install Edeniq technology at Pacific Ethanol’s Stockton, California ethanol plant. Pacific Ethanol will deploy Edeniq’s patented OilPlus corn oil extraction process to increase corn oil recovery.

Corn oil extraction has become, these days, table-stakes for an ethanol producer. But here’s an unusual one. Earlier this month, we reported that researchers at NCERC announced a successful production of ethanol from the cellulosic portion of the corn kernel.

“Any of the 211 existing ethanol plants in the United States could be retrofitted with existing bolt-on technologies to produce cellulosic ethanol from corn without the need to build new facilities,” said NCERC Director John Caupert. “This translates into opportunities for jobs and economic development, particularly in rural areas.”

6. Advanced enzymes

Our 2012 Biofuels Digest Yield Improvement Award went to Mascoma and Lallemand’s TransFerm enzymes. It’s a bioengineered drop-in substitute for conventional fermenting yeast that lowers costs for corn ethanol producers by alleviating the need to purchase a significant amount of the expensive enzymes currently used in corn ethanol production.

7. Enzymes in corn

Last October, we reported that Syngenta and Plymouth Energy signed an agreement to use Enogen trait technology starting in fall 2013. Syngenta states that when using Enogen trait technology there is no need to use liquid alpha amylase enzyme for dry grind ethanol production.

The technology improves ethanol production while reducing energy, gas and water usage. Syngenta is currently contracting corn growers to grow Enogen corn. Under the agreement, growers will receive a premium price for each bushel of Enogen grain delivered to the ethanol plant.

Over in Massachusetts, Agrivida has been working hard too. “Agrivida has created a proprietary INzyme molecular engineering technology that allows the renewable chemicals, fuels and other industries to grow a substrate of non-food energy crops that contain dormant enzymes, “said Agrivida’s Dr. Michael Lanahan.  “These enzymes accumulate in the energy crop—which can be corn stover or other grains or plants—and are then activated during processing.

8. Algae co-location and production

Our 2012 Industrial Symbiosis Award went to Green Plains Renewable Energy and BioProcess Algae — as the as the BioProcess Algae project advances from a small pilot system to a 5-acre demonstration including all components systems that lead from CO2 capture through algae growth, harvest, and extraction. It aims at transforming not only the opportunities for algae production, but the potential to transform GPRE’s operating income stream beyond corn ethanol, distillers grains and corn oil.

But there’s more than BioProcessAlgae in the game these days — the technology options have expanded to include the biodiesel side. In February, we reported that American Natural Processors is receiving $300,000 in state funds and tax credits for a $5.8m algal oil plant expansion into Galva. The funding will come from the Iowa Economic Development Authority Board. The expansion is retrofitting a biodiesel plant that opened in 2008 but closed in 2010; it is expected to be completed by 2016.

9. Switchover to biobutanol

Gevo, Butamax, and Green Biologics are working on these opportunities – though Butamax and Gevo have been more active to date with the US corn ethanol fleet. The opportunity? Take the same corn ethanol feedstock stream, add a relatively low-impact unit for biobutanol production, and produce a $4 molecule instead of a $2 molecule. Payback, say the technology developers, can come within three years.

We looked at the Gevo-Butamax competition in “Gevo vs Butamax: Biofuels’ Montagues and Capulets race for scale with new agreements.

The Gevo group of facilities now includes:

Biofuel Energy – Fairmont, Minnesota
Biofuel Energy – Wood River, Nebraska
Redfield Energy – Redfield, South Dakota
Gevo – Luverne, Minnesota
Malaysian Biotechnology project (unnamed) – Terengganu state, Malaysia

The Butamax Early Adopters Group now includes:

Big River Resources of Illinois, Iowa, & Wisconsin
Corn, LP of Goldfield, Iowa
Granite Falls Energy LLC of Granite Falls, MN
Highwater Ethanol of Lamberton, MN
Lincolnway Energy of Nevada, Iowa
Little Sioux Corn Processors of Marcus, Iowa
Platinum Ethanol LLC of Arthur, Iowa
Siouxland Ethanol of Jackson, Nebraska

10. Advanced milling

Edeniq’s Cellunator technology produces sugars by milling corn and other plant materials into “right-sized” particles of feedstock that can be more easily converted.

This year, the penny has dropped on deployment. Aemetis is testing EdeniQ’s systems, Pacific Ethanol too — and Edeniq announced that it has begun engineering and construction of a bagasse to sugars demonstration-scale plant together with its partner, Usina Vale, a Brazilian sugar and ethanol producer. The demonstration plant will produce cellulosic sugars from sugarcane bagasse, the fibrous by-product of sugarcane juice extraction.

The Bottom Line

We’ve said it many times. Want a great route into advanced, next-gen technologies to make fuels and chemicals? Buy an ethanol plant.

Category: Top Stories

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