Abengoa has agreement with Kansas Electric

By Anna Austin | January 04, 2010
Posted January 22, 2010

Spanish cellulosic ethanol producer Abengoa Bioenergy has teamed up with Mid-Kansas Electric Co. LLC to develop a cellulosic ethanol and power plant in Stevens County, Kan., to produce 15 MMgy of ethanol and 75 megawatts (MW) of power per year.

Abengoa Bioenergy Hybrid of Kansas will utilize locally available biomass resources such as corn stover, wheat straw and switchgrass as feedstocks, procuring them from farmers/producers in seven counties within a 50-mile radius of the plant. ABHK will require about 2,500 tons of biomass per day, or the equivalent of about 130 truckloads, according to Chris Roach, ABHK project development manager.

Once the biomass materials are harvested into package form, they will be transported via flat bed trailer to the nearest satellite depot. An estimated 80 percent of the biomass packages will go from the field to a satellite depot for storage and then to ABHK; the rest will be transported directly from the field to the facility, according to the companies. An extensive investigation of biomass availability has been performed and determined that there will be sufficient quantity of feedstock to meet demand. Clare Gustin, vice president of Mid-Kansas Electric Co. Member Services & External Affairs, said the facility would require only about 10 percent of the biomass residues available within 50 miles of ABHK.

Roach said in a telephone interview that contracting for the materials has already begun.

The projected cost of construction is $550 million, which will be funded by equity provided by Abengoa Bioenergy, a grant of $76 million from the U.S. DOE to support the commercialization of Abengoa cellulosic ethanol technology and additional financing through a lender or similar entity.

"The significance of this announcement is that the power purchase agreement gives Abengoa Bioenergy a 20-year contract to take to the bank' for financing," Gustin said. The electricity produced at the site will serve the retail customers of Mid-Kansas Electric located in 34 counties in the state.

The next step in developing the project will be for Abengoa Bioenergy to obtain an air permit from the Kansas Department of Health and the Environment and prepare an Environmental Impact Statement in compliance with the National Environmental Policy Act.

Roach said project construction is slated to commence in late 2010; completion is targeted for 2012.

Beyond ABHK, Abengoa currently owns two ethanol production facilities in Brazil, and recently completed construction of and is in the process of starting up two facilities in Indiana and Illinois.