Cobs to Switchgrass to Gasoline Parity

Partners in a venture taking shape in eastern Tennessee hope to realize the promise of cellulosic ethanol.
By Susanne Retka Schill | May 04, 2009
Reports from a spring U.S. DOE meeting of cellulosic ethanol grant recipients indicate the embryonic industry is bogged down by a difficult financing environment and the challenge of creating a feedstock supply chain from scratch. While a few projects are under construction, others are still working to put the final package together and many DOE-funded projects are struggling to build momentum. In eastern Tennessee, a corporate/state partnership is forging ahead with its vision despite industry-wide problems and has begun the construction of a demonstration cellulosic ethanol facility while its second round of switchgrass seedlings are emerging.

The University of Tennessee has been laying the groundwork for this project for several years, conducting a full range of agronomic research on switchgrass varieties, establishment and management and potential conversion technologies and uses. Tennessee's vision began taking shape as part of the SunGrant Research Initiative, created by Congress in 2003 to establish five regional efforts in biobased energy and product technologies. Several departments in the University of Tennessee, along with the DOE's Oak Ridge National Laboratory explored feedstock and conversion options. In the fall of 2007, the university's groundwork seemed to have come to a fruitful juncture when a partnership was announced with cellulosic ethanol developer Mascoma Corp. to build a 5 MMgy cellulosic ethanol plant at Vonore, Tenn. The project, designed to demonstrate cellulosic ethanol technology at one-tenth commercial scale, landed a $26 million DOE grant and the state of Tennessee committed $40 million to the project. But just a year later, in July of 2008, UT announced it had ended that partnership and would be working with the joint venture Dupont Danisco Cellulosic Ethanol LLC.

Shifting Directions
With the shift in direction for industry partners in Tennessee, it appears the project is picking up momentum. DDCE's plans are to build a 250,000 gallon demonstration facility with corn cobs as the initial feedstock at the site near Vonore, Tenn., chosen by the Tennessee Bioenergy Initiative. Meanwhile, the University of Tennessee continues to sign up farmers in a state-funded incentive program to stimulate switchgrass establishment, and is now looking to get a pelleting plant established as an alternative user of switchgrass production while the biorefinery project develops.

A ceremonial groundbreaking was held in October at Niles Ferry near Vonore for DDCE's demonstration plant. The plant is a joint venture with Genera Energy LLC, the corporation formed by the University of Tennessee Research Foundation to manage the collaboration. Construction began in earnest in December on the 250,000 gallon per year facility. "We're calling it a demonstration instead of pilot plant," says Georg Anderl, DDCE vice president of engineering. "Because of the strengths that the parent companies have going into this joint venture, at this scale we can go directly to commercial scale without intermediate steps." By the end of the year DDCE expects to be running cob through the facility, producing the data for the parallel engineering of the first commercial facility targeted to be operational by late 2012.

While DDCE is planning to build and operate several commercial plants using its technology, it is not planning to become a major provider of cellulosic ethanol, says Joe Skurla, president and CEO. "We will be entering the market globally as a provider of cellulosic ethanol technology. That will mean licensing, royalties, providing proprietary equipment, maintenance contracts and support." DDCE has a team already looking for a location for the first corn cob-based commercial facility, likely to be co-located with a corn ethanol plant to make use of existing infrastructure. Once the cob-based process is underway, DDCE will turn to switchgrass, with the first commercial facility to be built in Tennessee. "It's important to put your money where your mouth is," Skurla says, "and that makes your mouth more credible." The commercial facilities are aimed at demonstrating the viability of DDCE's technology platform and the Vonore facility under construction now will become an applications laboratory for optimizing DDCE's process for multiple agricultural residues and dedicated energy crops.

Unlike many cellulosic ethanol ventures under development, the money backing DDCE is coming entirely from the joint venture partners. Each entity is contributing $70 million as well as technology and key personnel. Skurla and Stuart Thomas, DDCE technology director, joined the joint venture from Dupont, while Georg Anderl, vice president of engineering, and Jack Huttner, vice president commercial and public affairs, came from Genencor, a division of Danisco AS. The joint venture is built upon previous collaborations. The Dupont-Tate & Layle BioProducts Joint Venture tapped into Genencor's enzyme expertise as they developed and built a plant at Loudon, Tenn., to manufacture bio propanediol from corn starch. DuPont sells the bio-based polymer and also uses it in several product lines including fibers, de-icers and detergents.

Anderl says DDCE goes beyond the typical joint venture. "We're not taking technology and throwing it over the wall to a partner," he says. "We're developing the technology in an integrated fashion in one technology shop. The coupling of the types of enzymes with the substrate and the pretreatment technology and how we're processing downstream are not seen as individual operations but an integrated process that we can quickly iterate through to an optimal design. I don't think that truly exists with anybody else. In its final form, the commercial facility will have everything it needs, including the enzyme production on site. It's truly a way to get at this in a rapid way with the best possible answer." The joint venture is structured to draw from the parent companies, Huttner says, "while being deliberate about changing the culture of the two companies to make the joint venture the kind of lean, decision-oriented, action-oriented, good collaborator that we want to be." For Skurla, a main advantage of the joint venture is being fully funded. "It frees me up to focus on the technology and the business development rather than focusing on fundraising."

Skurla adds DDCE is planning to roll out its technology quickly. "Once we have the data from our demonstration facility, we would expect we would get funding for our commercial facility, we also expect to be in a position to work with early adaptors to provide them with customized licenses to do their own commercial facilities. This is to take advantage of subsidies and early loan guarantees. We view this deployment as starting to occur next year, rather than three or five years down the road." DDCE plans an ongoing relationship with licensees to share process improvements as the technology develops.


DDCE is developing an integrated, energy efficient process with onsite enzyme and ethanologen production.

Process Details
Careful not to divulge too many details, the management team provides an overview to EPM of the DDCE process. Dupont has contributed the thermochemical pretreatment process it has been working on for five years based on a dilute alkaline process. The enzymatic hydrolysis to convert the cellulose and hemicellulose into fermentable sugars is based on the Accellerase enzyme platform developed by Genencor, although DDCE is customizing the enzyme cocktail to integrate it with preprocessing and fermentation environments. The proprietary ethanalogen used in fermentation was developed through a Dupont collaboration with DOE National Renewable Energy Laboratories, based on NREL's work with Zymomonas mobilis. "It's a chemical approach that is very energy efficient and also byproduct efficient," Thomas says. "We've taken the path of extensive chemical recycling to minimize the environmental footprint. From a feedstock perspective it is fairly flexible."

"Cob will be first," Skurla explains, "because it is where we've done our work and it has the existing infrastructure. But cob is a finite opportunity. The real development will be in the area of dedicated energy crops, which brings us to switchgrass and that brings us to why we're doing work with Tennessee." Skurla sees a potential for dedicated energy crops to change economics in rural areas and possibly change the dynamics of the ethanol market as cellulosic ethanol production develops outside the Corn Belt.

Targeting Marginal Land
There is little corn in east Tennessee where DDCE is building its facility. The most common crops are hay, soybeans and wheat. To diversify and strengthen the agricultural economy, the state is backing the development of dedicated energy crops in the region through an $8 million investment in a farmer incentive program. Most of the 750 acres signed up in the first round of farmer contracts last year were cropland since there was little time for field preparation. Also, the number of acres was limited by seed availability. "We had very good success with the first year switchgrass production we harvested beginning in November," says Kelly Tiller, co-director of UT's Office of Bioenergy
Programs and president and CEO of Genera Energy. "We had almost a 90 percent success rate in establishment which is higher than we expected," she says. "The first year average was a little over two tons per acre." UT agronomists researching switchgrass production had projected the first year yields would average between 1 and 2 tons per acre, between 5 to 6 tons per acre in the second year and 8 to 10 tons in the third and subsequent years. The first year production has been baled and moved to a central location where it has been covered with tarps for storage.

The success from the first year of the program led to 3,500 acres being offered for enrollment in the second year, of which 1,950 were selected, all within a 50-mile radius of Vonore. "One thing we are trying to do in this program is get a good cross section of a lot of different conditions," Tiller says. "We're looking not only at soil productivity and soil types, but slope, previous cropping history and weed pressure - also managerial expertise and equipment available. We have used all of those in our selection criteria for participation in the program to try to give us as a broad of an experience as we can with all of these factors." The smallest acreage allowed is 15 acres per farm, although that can be broken into smaller fields. Based on economic analysis done in earlier research, UT established a price of $450 per acre, which amortizes the cost of switchgrass establishment over the three years of the contract. It is an attractive, yet risky option for farmers, Tiller says, as there is no guarantee of a market when the contract ends after three years.

As UT extension service works with farmers in planting and establishing the switchgrass, agronomic studies continue along with work on storage issues, with equipment manufacturers on harvesting and handling, and preprocessing issues. "We're putting together the engineering systems to get the quantity and quality you need at a price you can afford," Tiller explains. The goal is to get the switchgrass to the bioenergy user at $60 per dry ton. "We're not there right now, but we do see where there is lots of room for improvement in reducing those costs."

Gasoline Parity
"We need to look at the entire value chain and understand how you can squeeze the most capital and cost out, and increase the wealth created," Skurla says. "The citing of the plant, the treatment of the biomass whether it's chopped up finely or coarsely, whether it's compacted or not, has to be integrated into the economics throughout the value chain.
On top of that you have to impose the life cycle analysis as well to ensure you are managing the carbon molecule to its optimal advantage."

Skurla says the DDCE vision is to reach gasoline parity. "We've done the modeling in terms of expected crude oil prices, expected biomass prices, expected costs of conversion.

Our focus is not to be competitive with starch ethanol, although we will be. Our focus is not to become a desirable biofuel, although we will be. Our focus is to become an alternative for the consumer to make the choice of what they will put in their vehicles. With oil at about $80 a barrel and technology development of the path where we anticipate it to be - this is a learning curve, of course - sometime within the next decade, this industry will be at gasoline parity."

Susanne Retka Schill is an assistant editor at BBI International. Reach her at sretkaschill@bbiinternational.com or (701) 738-4922.