Biomass-to-electricity study may benefit corn-based ethanol plants
The study found that for an investment of approximately $57 million, a 50 MMgy corn-based ethanol plant could use biomass to produce enough heat and power to operate the plant and sell energy back to the power grid. Tiffany said utility companies would more than likely be supportive of plants that make such an investment. According to the study, a 50 MMgy plant could produce seven megawatts to sell back to the power grid. "This could be very substantial and maybe also become very attractive to those power utilities that face requirements in the future," Tiffany said. The study also found that a 50 MMgy plant using biomass as an energy source would spend $15 million per year on local energy feedstocks versus $17 million per year on natural gas.
Mark Schmidt, vice president of AgStar Financial Services, attended a workshop in Mankato, Minn., and presented the lender viewpoints on the study. He told Biomass Magazine that lenders are willing to finance projects suggested in the university study. "It's a case-by-case process," he said. "Plants have different theories on how they want to embrace biomass for their particular plant according to what they believe will be the most successful and economical thing for them to do." While Schmidt said lenders find comfort in the study because it confirms previous theories, financing is difficult right now, and new plants might not have success in financing such a project. "If an ethanol plant costs $2 per gallon to build it from scratch and these energy features are costing another 30 to 40 cents per gallon, they're not raising the bar for initial financing because they don't have a track record," he said. "It takes a while for any marketplace to absorb new things, and it's the same thing here."