ND cellulosic project revamps following feedstock study

By Kris Bevill | March 31, 2011

Plans for a proposed cellulosic ethanol plant at Spiritwood, N.D., located near Jamestown in south-central portion of the state, have been revamped following the completion of a comprehensive feedstock supply and marketing study. The facility was originally planned to produce 20 MMgy of cellulosic ethanol but now is expected to be a hybrid plant, producing 50 MMgy of corn-based ethanol and 8 MMgy of cellulosic ethanol.

The project is being developed by Dakota Spirit AgEnergy LLC, a subsidiary of Minnesota-based electric cooperative Great River Energy. GRE is currently constructing a combined heat and power (CHP) plant at the proposed ethanol plant site, which also houses a separate Cargill Malt plant. The CHP plant will provide steam to the malt plant and the proposed ethanol facility.

Great River Energy and the North Dakota Agricultural Products Utilization Commission funded the feedstock and market supply study, which was conducted to determine the overall economic feasibility of the project and verify feedstock supply and market prices for products produced at the plant. It concluded that while the 480,000 tons annually of feedstock required for a 20 MMgy plant could be obtained from within a 100-mile radius of the plant, reducing that requirement to 192,000 tons, enough to feed an 8 MMgy plant, would be more economical and likely to succeed. Wheat straw was the initial target feedstock, but the study determined a combination of corn stover and wheat straw should be utilized at the plant to mitigate risk. The cellulosic ethanol plant will utilize technology developed by Denmark’s Inbicon A/S.

Area farmers readily participated in the study and are interested in supplying feedstock to the plant but they expressed “little to no interest” in purchasing the equipment necessary to harvest and transport the feedstock. A short harvest window means a large fleet of equipment, including power units, balers, stackers and trucks, will be required, as well as increased labor hours. “The magnitude of the effort to bale, transport and store approximately one million bales of feedstock within a 30- to 45-day window is a major factor,” the study noted. One method of reducing the cost of collection, storage, harvest and transport is to construct satellite storage units, according to the study. This will also mitigate risk of loss to fire, a major concern when storing biomass. Estimated cost of feedstock was determined to range from $45 to $67 per dry ton.

According to Great River Energy, the hybrid ethanol plant will be constructed in two phases, producing corn ethanol first. A groundbreaking could be held later this year if financing is acquired, according to Great River Energy. The study focused on a potential feedstock procurement plan for the cellulosic plant, which would undergo construction beginning in 2012 and begin producing at half of its nameplate capacity in 2014. The plan calls for a small feedstock harvest this fall of 2,000 acres of wheat straw and 2,000 acres of corn. The feedstock process and costs would continue to be refined as harvested acres are increased gradually each year until 50 percent of annual feedstock requirements are harvested in 2014. By 2017, the plan calls for a maintained 20 percent feedstock buffer each year going forward.

Inbicon’s technology produces ethanol, C5 molasses and lignin. Ethanol produced at the plant is estimated to be worth $3 per gallon, based on calculations for future cellulosic waiver credits. About 170,000 tons of lignin is expected to be produced annually at the plant, some of which can be co-fired at Great River Energy’s co-located CHP plant. The lignin pellets were determined to be worth $50 to $150 per ton. The 188,000 tons of C5 molasses produced annually could be used as an animal feed, but will face a tight market, competing with locally available sugar beet molasses. For that reason, and because users will not be initially familiar with the product, the study estimated the molasses to be valued between $90 and $130 per ton.

State officials so far have expressed enthusiasm and support for the project. A group including local and state officials recently traveled to Denmark to explore that country’s crop residue harvest system and to tour the Inbicon demonstration-scale cellulosic facility at Kalundborg. Dakota Spirit AgEnergy has yet to request state funding for the project; it expects the plant to be ultimately owned and operated by a group of stakeholders including local investors. N.D. Gov. Jack Dalrymple said the project is an example of an effort to create new markets for farmers, create jobs and help in reducing the country’s dependency on foreign oil.