The Iowa Power Fund last week awarded $14.75 million to Poet LLC to help the company build Iowa's first cellulosic ethanol plant. The decision made by the Power Fund board will keep Iowa at the forefront of development of the cellulosic ethanol industry, say Iowa officials.
The board's decision is the largest financial commitment yet by the Power Fund, which grants state money to projects to help develop renewable sources of energy. Poet, based in Sioux Falls, S.D., owns and operates ethanol plants in Iowa and elsewhere.
The state plans to invest $20 million in the ethanol plant at Emmetsburg in northwest Iowa. Poet expects to have the new addition open sometime in 2010 and be making cellulosic ethanol. The Iowa Department of Economic Development has already granted $5.25 million to Poet for the project. The $14.75 million plus $5.25 million adds up to $20 million from the state of Iowa.
Iowa's financial support is welcome
The existing plant, once it is remodeled and the cellulosic facility is added, will make ethanol from corncobs in addition to grain. "For years Iowa has been a leader in renewable fuels innovation, and with this new grant made to Poet for the Emmetsburg plant, Iowa will continue to lead the way," says Iowa Lt. Governor Patty Judge. "The new facility will be one of the first in the nation to produce cellulosic ethanol. This represents the next generation in biofuels, and another step toward energy independence."
Called Project Liberty, the transformation of the current 50-million-gallon-per-year grain-to-ethanol plant into an integrated corn-to-ethanol and cellulose-to-ethanol biorefinery is jointly funded by Poet and the U.S. Department of Energy--in addition to the funding from the state of Iowa.
Once complete, the facility will produce 125 million gallons of ethanol per year, of which 25 million gallons will be cellulosic ethanol made from corn fiber and corn- cobs. By adding cellulosic production to an existing grain ethanol plant, Poet will be able to produce 11% more ethanol from a bushel of corn, 27% more from an acre of corn, while reducing fossil fuel consumption and water use, says Poet CEO Jeff Broin.
Power Fund grants largest award
"One of the reasons we decided to build our first cellulosic ethanol production facility in Iowa is because of the state's deep commitment to renewable energy," says Broin. "This is an investment that ensures Iowa will continue to be a leader as the ethanol industry expands to include cellulosic production."
In their application to the Power Fund, Poet officials laid out the significant benefits the project could hold for Iowa. In Emmetsburg, where Poet will expand the existing ethanol plant to include production of cellulosic ethanol from cobs, the capital investment will be more than $200 million and when finished the new plant will create 35 additional jobs.
Also, with cobs currently valued at $30 to $60 per ton, farmers in the Emmetsburg area would see an increase in revenue of $5.4 to $10.8 million.
Farmers can earn income by selling cobs
But the potential long-term benefits are much larger, says Broin. Poet plans to add cellulosic ethanol production to its six other facilities in Iowa, and potentially license the technology to all biorefineries in Iowa. This could represent an additional capital investment of $2 billion and create 2,700 new jobs across the state. For Iowa farmers it presents an opportunity for $150 million to $300 million in annual revenue from selling cobs which they aren't doing now.
"We are humbled and honored to have the state of Iowa invest alongside us in development of cellulosic ethanol production," says Broin. "For ethanol to continue to save consumers money at the gas pump, decrease our dangerous reliance on foreign oil and reduce greenhouse gas emissions, we must have a broad collaboration of private companies, government and universities for the cellulosic industry to thrive. The state of Iowa understands that and is determined to take a leadership role in this emerging industry."