“We are tied into a lot of what’s happening in the private arena,” says Larry Russo, biorefinery technology manager within the DOE’s Biomass Program. “There’s been a tremendous amount of private money in the last 18 months—mostly venture capital—flowing into a lot of these projects making them catch fire a little bit, and getting the technologies out there.” But doing the research is not enough. “We need to do the research of course, but then we need to do the pilot testing with our partners, and then scale these things up to get to the point where it can attract financing on its own,” he says. “That’s what we’re doing at DOE—we’re buying down the risk by our involvement.”
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One of the big challenges still facing a U.S. biorefinery build-out is “techno-economical” in nature as Russo characterizes it. In other words, loose technology ends still need cinching up before big-money lenders have enough faith to strike a loan deal for biorefinery projects. Thermochemically, this means improving syngas clean up. “We know that clean up is a very important step so we had a solicitation that was issued just this week (at the end of March) to address not only the clean up, but to address catalyst selection as well,” Russo reveals. Biochemically speaking, there is still the lingering need for more cost-effective and higher performing enzymes and more fruitful ethanologens.
Despite all of this, Range Fuels Inc., which broke ground on its 20 MMgy wood-to-ethanol thermochemical plant in Soperton, Ga., is finding success quite unlike the rest of the biorefinery projects. On April 1, the company announced that it had raised more than $100 million in series B equity financing. This is in addition to the $76 million DOE grant Range Fuels received along with a $6 million grant from the state of Georgia. The company says the $100-plus million will go toward the completion of construction on the 20 MMgy biorefinery. Russo confirms that Range Fuels is the only commercial-scale cellulosic ethanol plant under construction by the end of the first quarter of 2008. Three more projects that were part of the original $385-million award have completed what’s called a Phase One award.
“We’re awarding these large projects in two phases,” Russo tells Biomass Magazine. “This allows work to get started other than construction to meet the compliance issues—it allows them to dot their i’s and cross their t’s prior to construction.” Because federal money is involved, the national environmental protection act requires proof that a biorefinery project will not detrimentally affect the environment and, if there is a potential for ill effects, tactics to mitigate them must be presented. “All of this takes about a year,” he says. To enable progress to start earlier, the DOE decided to cut initial checks post haste to Range Fuels, Poet Energy, Abengoa Bioenergy and BlueFire Ethanol Inc.
Only one of these original six projects is working on a concentrated acid hydrolysis pretreatment—BlueFire Ethanol. The company recently completed testing on decrystalizing, hydrolyzing and filtration equipment from B&P Process Equipment, a vendor out of Saginaw, Mich. B&P Process Equipment engineer Abbey Martin says decrystalization tests using its equipment yielded better results than data from the Izumi, Japan, pilot plant. “We believe that we can now design a commercial unit that will perform better and cost less than a design based solely on the pilot data,” Martin says. The vendor equipment testing is part of a larger, “integrated investigation” being conducted for final engineering of BlueFire’s full-scale 17 MMgy municipal solid waste biorefinery, the location of which will be at a landfill in Corona, Calif.
Recent ‘10 percent’ Demos
The more recent DOE grant award of $114 million announced in first-quarter 2008 is for four “10 percent” demonstration facilities with two additional projects to be named later.
These projects are smaller scale than the original six and are expected to demonstrate commercial viability by building biorefineries producing 10 percent of an intended commercial volume. Recipients of this latest grant are ICM Inc., Lignol Innovations Inc., Pacific Ethanol Inc., and Stora Enso North America. Awarding the 10 percent projects before announcing funding for the six commercial-scale biorefineries may have made more sense to some, but there is a method to the DOE’s madness. “When Congress did the Energy Policy Act of 2005, they decided they wanted to do something to get commercial deployment of cellulosic biofuels out the door,” Russo says. “Those first six projects have been worked on for years and years, and were the closest to being ready—the closest to deployment.” Ten percent is not a magic number either—it’s what Wall Street and conventional financiers told DOE they require to even consider a finance package.
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