Renewable Energy Memo

October 26, 2009

Renewable Energy Around the Web: October 26, 2009

Filed under: Around the Web, Biofuels, CleanTech investing, Emissions Cap and Trade — Tags: , , — Jonathan B. Wilson @ 7:01 am

Our weekly compilation of renewable energy news and information from around the Web.

50 Hottest in Bioenergy

Our friends at Biofuels Digest have closed the nominations on their 50 hottest companies in bioenergy contest.  A select panel of judges will now rank the nominees.  Results are expected near the end of the year.

Biodiesel Turns the Corner

A hypothetical biodiesel plant generating biodiesel from soybean oil would have been profitable in Septmeber (after six months of losses) according to Biodiesel Magazine.

More Controversy Over Indirect Land Use Charges

A new paper in the journal Science, critizes the Kyoto Treaty and other international agreements for the way they calculate carbon emissions.  According to the paper, authored by a group of recognized renewable energy scientists, a better method of accounting would look at the degree to which one method of fuel generation results in few net tons of CO2 than an alternative method. 

Timothy D. Searchinger, the paper’s lead author and a researcher at Princeton, argued that the generation of power from biomass is treated as an entirely non-anthropogenic source of CO2 and that this practice under-estimates the generation of emissions from biomass and bioenergy.  He said, “It literally means you can chip up the world’s forests and burn them” for fuel without accounting for any effect on greenhouse gases. 

An article in the Wall Street Journal traced the accounting practice back to the implementation of the Kyoto protocol, which developed a system for measuring the production of greenhouse gases.  For a number of reasons, the Kyoto protocol imposed no limits on land-use emissions in developing countries.   “So if a forest is cleared in Indonesia and ends up as a biofuel in Europe, Asia does not count the land-use emissions and Europe does not report the tailpipe emissions.”

Proponents of biofuels have reacted negatively to the article, as well as to early controversy over accounting for GHG emissions attributable to land-use in developing countries, by arguing that biofuels, overall, producer fewer GHGs than do fossil fuels.

The Renewable Fuels Association, a trade association for the ethanol industry, argued that “the release of CO2 from recently living organisms has no overall effect on atmospheric CO2 levels and is therefore carbon neutral because atmospheric CO2 decreases when a plant photosynthesizes, then increases back to its initial level when that carbon (in the form of a biofuel) is burned and returned to the atmosphere. In this way, biofuels “recycle” organic carbon.”

Isn’t this all a question of timing though?  It’s true, as the RFA argues that biofuels “recycle” organic carbon because plans absorb CO2 from the atmosphere in the process of photosynthesis and then emit the same amount of carbon when they are combusted.  Fossil fuels, however, do the same thing though over a much longer period of time.

Presumably RFA’s point is that fossil fuels that have fixed carbon in a geological resource.  Once fixed, the carbon will not become a part of atmospheric CO2 unless burned.  Plant life, however, are always in the midst of either fixing or releasing CO2, as CO2 would be released when dead plants are combusted or when they rot on the forest floor. 

Canadian Biogas Producer Inks Feedstock Supply Deal

Ontario, Canada-based StormFisher Biogas has sealed a deal with grocery retailer Loblaw Companies Ltd. for the annual supply of 15,000 metric tons (16,500 tons) of organic waste to fuel its $15 million biogas plant in London, Ontario.

The agreement with Loblaw, a subsidiary of Canadian food distributor giant George Weston Ltd., is StormFisher’s biggest deal since last year’s announcement of plans to construct up to 30 anaerobic digestion plants across North America over the next five years. The plants will be funded by $350 million from private equity company Denham Capital Management, and range from 2.8 to 5 megawatts

The London facility is the company’s flagship project, slated to commence operations in late 2010. The 210,000 MMbtu/2.8 megawatt plant will require approximately 140,000 metric tons (154,300 tons) of organic waste per year and be capable of powering about 2,800 homes; the amount of organic waste Loblaw will supply should be enough to power 225 homes.

The Ontario Power Authority will purchase the electricity from StormFisher through its Standard Offer Program, a feed-in tariff that was put in place in Ontario at the beginning of 2007. According to the program criteria, biogas projects under 10 megawatts are paid 11 cents per kilowatt hour.

October 19, 2009

IRS Memo Provides Guidance on Black Liquor Tax Credits / Producers May Continue to Obtain Credits through 2012

Filed under: Biofuels, CleanTech investing, Uncategorized — Tags: , , , , — Jonathan B. Wilson @ 10:10 am

 A recently-published memorandum from the Office of the Chief Counsel of the IRS may provide additional guidance to biofuels producers on their ability to obtain tax credits. (IRS Chief Counsel Advice 200941011).

The memorandum, penned in June but publicly-released in October, 2009, concludes that (1) ‘black liquor’ generated in a kraft mill in the paper manufacturing process may qualify as “liquid fuel derived from biomass” under IRC Section 6426(d)(2)(G), (2) the combination of black liquor with at least 0.1%diesel creates an “alternative fuel mixture” for purposes of determining the alternative fuel mixture credit under Section 6426(e) and (3) black liquor may also qualify for the cellulosic biofuel producer credit under IRC Section 40(b)(6) but a producer may not utilize both the mixture tax credit (under 6426(e)) and the producer tax credit (under 40(b)(6).

The analysis is important because the mixture credit amounts to only $0.50 per gallon (and requires the addition of diesel or another taxable fuel) while the cellulosic biofuel credit amounts to $1.01 per gallon and does not require any fuel mixing.

Even more importantly, the mixture credit program expires at the end of 2009, while the cellulosic biofuel credit continues until the end of 2012, so producers who are contemplating a sunset of their mixture credits at the end of the year could have three more years of credit under the cellulosic biofuel program.

Most pulp and paper producers are currently receiving the 50 cent alternative fuel mixture credit. In order to receive the $1.01 cellulosic biofuel credit, producers will have to take the additional step of registering under the EPA Renewable Fuel Standard Program.

Renewable Energy Around the Web: October 19, 2009

Filed under: Around the Web, Biofuels — Tags: , , , , — Jonathan B. Wilson @ 6:52 am

Our weekly compilation of renewable energy news and information from around the Web.

American Bar Association Renewable Energy Committee

The Public Utility Section of the American Bar Association announced the formation of a new renewable energy committee that will pull together lawyers to study the renewable energy industry.  The ABA’s Public Utility Section is one of the oldest in the ABA and includes among its members the in-house attorneys and outside counsel for many of the country’s major electric utilities.

Coskata Opens for Business

Coskata unveiled its new nearly-commercial-scale cellulosic ethanol plant in Madison, Pa. this past week.  According to the company:

We are proud that we have successfully scaled our technology to this significant level,” said Bill Roe, president and CEO of Coskata. “This facility is demonstrating that our efficient, affordable and flexible conversion technology is ready for commercialization. The next step is to build full-scale facilities and begin licensing our technology to project developers, project financiers and strategic partners.”

Unlike other technologies and facilities that may rely on one primary source of feedstock, Coskata’s flex ethanol facility will be producing ethanol from numerous feedstocks, including wood biomass, agricultural waste, sustainable energy crops, and construction waste. This flexible approach at the Madison facility is enabled by Westinghouse Plasma Corporation (WPC), a wholly owned subsidiary of Alter NRG, and their plasma gasification technology. The feedstock flexible nature of the Coskata approach also allows for true geographic flexibility, meaning facilities can be built anywhere a feedstock can be sourced or delivered. 

Coskata’s technology, as demonstrated through Project Lighthouse, will be able to reduce greenhouse gasses by as much as 96% over conventional gasoline, while using less than half the water that it takes to get a gallon of gasoline. In addition, the company’s ability to produce non grain-based ethanol that is as much as 7 times as energy positive as the fossil fuel used in the process, addresses many concerns related to traditional processes, including energy efficiency and the use of grain. 

“The integrated biorefinery – utilizing Westinghouse Plasma Gasification on the front end and Coskata’s syngas-to-biofuels conversion process on the back end – serves as an excellent example of two leading companies working together to deliver a viable process to the biofuel market,” said Mark Montemurro, President and CEO of Alter NRG. “We’re excited to be delivering the feedstock flexibility to Coskata’s efficient and affordable process.” 

The facility is a demonstration of “minimum scale engineering”, an industry standard term which means it is the smallest size that will still allow the company to scale directly to 50 million and 100 million gallon Coskata facilities. Some of the ethanol that is being produced at the facility has been delivered to the General Motors Milford Proving Grounds for early testing, as well as to another major strategic partner.

“We invested in Coskata so that we could enable the rapid deployment of commercially viable and environmentally sustainable ethanol globally,” said Bob Babik, GM Vehicle Emissions Director. “We’re proud to say that we have already accepted some of Coskata’s ethanol at our Milford facility.”  

Globally, General Motors has produced more than 5 million flex-fuel vehicles to date. In the U.S. alone, there are more than 3.5 million GM flex-fuel cars and trucks on the road. For the 2010 model year, 17 E85-capable flex-fuel vehicles from the Chevrolet, Cadillac, Buick and GMC brands.

GM claims to be on track to make more than half of its vehicle production flex-fuel capable by 2012.

New Biomass Facility in South Georgia

 Wiregrass Power announced that it would break ground in 2010 on a $100 million biomass facility in Valdosta in southern Georgia.  The plant will process wood waste and wastewater sludge that is currently being deposited in a landfill. 

 Momentum for Biofuels

 We covered the increasing number of biofuels projects in the works, wondering aloud whether biofuels were gaining momentum.

 Environmental Issues Slow Big Solar Projects

 The LA Times covered the problem of delays at large solar projects in California due to environmental permitting delays. 

 The development of solar-power facilities in the desert has been a top priority of the Obama administration as it seeks to ease the nation’s dependence on fossil fuels and curb global warming. In addition, Gov. Arnold Schwarzenegger has urged that the state meet one-third of its electricity needs from renewable sources by 2020.

Companies are racing to finalize their permits and break ground by the end of next year, which would qualify them to obtain some of the $15 billion in federal stimulus funds designated for renewable energy projects. At stake is the creation of 48,000 jobs and more than 5,300 megawatts of new energy, enough to power almost 1.8 million homes, according to federal land managers.

But the presence of sensitive habitat, rare plants and imperiled creatures such as desert tortoises, bighorn sheep and flat-tailed horned lizards threatens to stall or derail some of the projects closest to securing permits.

 The article describes the utter chaos that ensues when multiple state and federal agencies are empowered to review and approve (or not) plans to locate energy facilities.  While the Obama administration has clearly made the installation of additional solar capacity a priority, other state and federal agencies will deny permission over any perceived environmental risk.  The end result is to increase the cost of initiating new facilities, to decrease the number of new facilities and ultimately to drive up the cost of power itself.

October 16, 2009

Momentum for Biofuels

Filed under: Biofuels, CleanTech investing — Tags: — Jonathan B. Wilson @ 7:14 am

The folks at Seeking Alpha (a blog for serious investors — not cheerleaders for sustainability or any particular point of view) make the argument that biofuels are beginning to gain momentum.  While these are not the days of wine and roses, it is encouraging to see the investment community looking at the biofuels space.  Some of the deals highlighted in the Seeking Alpha article include:

  • Powers Energy of America, an advanced biofuels company based in Evansville, Indiana.  That firm announced that it hopes to build a $285 million waste-to-ethanol plant in Lake County, about 65 miles north of Bloomington. The state of Indiana is now developing more than 12 separate biomass ethanol plants.   The company claims to have a 20-year contract for the supply of municipal waste, which will be concerted to ethanol fuel. They have already received $40 million for the project, but are waiting for additional funding or a bond guarantee for $245 million from the U.S. Department of Energy’s renewable grant program.
  • Masada Resource Group, based in New York.  Masada claims to be waiting for approval from the the city council of Middletown to proceed with a 10 Mgy waste-to-ethanol plant. The plant, which was originally proposed in 1996, has cost more than $40 million in its development phase, according to Seeking Alpha.  
  • Enerkem is said to be building a waste-to-energy plant on the Clover Bar landfill in Alberta, Canada.   The facility is expected to convert 100,000 tons of waste material into methanol, and to develop a process to convert methanol into ethanol for fuel markets. The proposed plant would open in 2010.
  • BlueFire Ethanol Fuels (BFRE.OB) announced yesterday that they would build their first second commercial scale ethanol plant in Mississippi instead of Mecca Lancaster, Ca., as originally planned.  BlueFire secured additional financing from a cellulosic ethanol grant from the U.S. Department of Energy last year.  Rumors indicated that BlueFire had run into problems with permitted the site in California, perhaps explaining to move to Mississippi.    [Update: An alert reader noted that the plant at Mecca was actually to be BFRE's second plant, and not its first.] 

Seeking Alpha noted that Ethanol imports to the U.S. increased 198,000 bbl to 702,000 bbl, while product supplied to the market, a proxy for demand, fell 443,000 bbl or 14,290 bpd to 22.466 million bbl or 724,710 bpd, according to the U.S.Department of Energy.

October 14, 2009

Wilson to Lead New ABA Renewable Energy Committee

As reported in the Atlanta Business Chronicle, the American Bar Association has tapped Atlanta lawyer Jonathan B. Wilson to head its new Renewable Energy Committee, which addresses green energy.

Wilson, a corporate attorney with the Atlanta firm of Taylor English Duma LLP, will lead the group, which seeks to improve research and scholarship in solar, wind and other natural resources and to make programs available to benefit the legal profession and U.S. public.

Wilson is a 15-year member of the ABA’s Public Utility Section, which focuses on the communications and energy industries. He also founded the section’s Internet Industry Committee in 1996.

As a founding chair of the Renewable Energy Committee, he plans to recruit at least 100 members by spring 2010, hold regular Web-based seminars on renewable energy and build a nationwide database of state-level renewable incentives.

“Everybody recognizes the value of energy independence and renewable energy,” Wilson said, in a news release. “But the questions are: How big a role should renewables play? How should the government be involved? How can companies take advantage of incentives? We’ll be addressing these crucial questions and more in the Renewable Energy Committee.”

For more information about the Renewable Energy Committee including instructions for joining, please visit this site.

October 13, 2009

Renewable Energy Around the Web: October 12, 2009

Filed under: Around the Web, Biofuels, CleanTech investing — Tags: , , , — Jonathan B. Wilson @ 7:45 am

Our weekly compilation of renewable energy news and information around the web.  (Cut short this week due to travel to a conference of the ABA Public Utility Section in Aspen, Colo.).

Ethanol Revival

Murphy Oil bought a corn ethanol plant in North Dakota for $92 million, announcing that it would spend an additional $15 million to upgrade the plant.  Biofuels Digest notes that this is the third similar announcement in as many weeks as other purchasers have taken up idle ethanol plants.

Is this the sign of a revival for ethanol?  The recent fall in the price of corn suggests that what was once uneconomical may now be coming back into vogue if ethanol producers can find a way to run profitably.

EPA to Regulate the Emission of Greehouse Gases

The EPA has published a notice of proposed rulemaking entitled Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule.  The proposed rule would establish a threshhold of 25,000 tons per year of CO2 emission as the level at which an emitter would become subject to regulation under Title V of the Clean Air Act.  As Ethanol Producer magazine notes, this level would likely subject most commercial ethanol plants to regulation as a result.  Indeed, the EPA recently confirmed that nearly all ethanol plants would be treated as “major emitters” under the new rule.

EIA: Home Heating to be Cheaper This Year

The Department of Energy’s Energy Information Administration is predicting that the cost of heating your home with heating oil will be roughly 8% cheaper this winter than last.  The fall in cost is a combination of a warmer expected winter, lower oil prices and increased conservation.  The home heating oil industry has vowed to have a biofuel content of at least 2% in heating oil sold after July 2010.

Coskata to Unveil New Ethanol Plant

Coskata is slated to unveil its new ethanol plant in Madison, Pa., in just a few days on October 15. 

Coskata was founded in 2006 with funding from Khosla Ventures, Advanced Technology Ventures and Great Point Ventures, and made a significant public debut in January 2008 when General Motors Corp. announced at the North American International Auto Show in Detroit it would invest an undisclosed amount of money in the company.

Coskata employs a three-step process technology that is capable of converting multiple feedstocks including woody biomass, agricultural waste, energy crops and construction/industrial wastes into synthesis gas. The syngas undergoes bacterial fermentation using Coskata’s proprietary microorganisms, and is converted into ethanol without using enzymes.

Coskata describes the facility as “minimum-scale engineering,” meaning it is the exact size that will allow the company to scale to 50 MMgy and 100 MMgy facilities. The $25 million plant, located 30 miles southeast of Pittsburgh, is co-located with a pilot-plant gasifier owned and operated by a unit of Calgary, Alberta’s Alter NRG Corp.

GM will use the ethanol produced at the facility for testing in flexible-fuel vehicles at its Milford, Mich., proving grounds.

October 9, 2009

Southern Company Buys Biomass Facility

Filed under: CleanTech investing — Tags: , — Jonathan B. Wilson @ 9:48 am

Southern Company has reportedly agreed to buy the biomass facility of Nacodoches Power for an undisclosed amount. 

The biomass facility in Sacul, Texas, is set to open during the third quarter, with operations set to start in 2012. The 165-acre project will be one of the largest biomass-fueled electric generating facilities in America, capable of generating approximately 100 megawatts

The plant will be fueled with biomass materials, including forest residue from the surrounding areas, wood processing residues and clean municipal wood waste. The project will require around 1 million tons of fuel annually.

The plant’s output is committed through a 20-year power purchase agreement with Austin Energy, the municipal utility owned by and serving Austin, Texas.

October 8, 2009

Qteros Makes Breakthrough Announcement on Ethanol from MSW

Filed under: Biofuels, Energy Blog — Tags: — Jonathan B. Wilson @ 8:01 am

Biofuels innovator Qteros and Applied Clean Tech  have announced a breakthrough in ethanol development from municipal solid waste, according to Biofuels Digest

Recyllose™, a recycled solids-based material produced from municipal wastewater, can now be turned into fuel for cars, announced Applied Cleantech and Qteros, the advanced biofuels company wh claims to be able to turn biomass into cellulosic ethanol through its proprietary Q Microbe™ technology.

Qteros has entered into a joint development project with Applied CleanTech (ACT), a commodities recycling company based in Israel, to use ACT’s Recyllose™-based feedstock, produced from municipal wastewater solids, for even more efficient and low-cost ethanol production. ACT’s recycling system treats wastewater solids, producing high-quality alternative energy sources for the production of electricity or ethanol, while reducing sludge formation and lowering wastewater treatment plant costs and increasing plant capacity.

The companies said they are the first to demonstrate commercial success in creating ethanol from the cellulose in municipal and agricultural liquid waste, and to offer a process that all municipalities can use to help reduce expenses.

“Our customer is every municipality that has a wastewater treatment plant,” said Jeff Hausthor, Qteros co-founder and senior project manager. “It will provide a value-added product for municipal wastewater plants, thereby making treatment plants much less expensive to run and helping local governments throughout the world with their constrained budgets.”

Israel Biran, ACT’s CEO, added, “It also helps answer the question of what municipalities can do with their sewage sludge, a major challenge now facing every wastewater treatment plant operator.”

By using ACT’s proprietary feedstock, Hausthor said Qteros and ACT’s researchers have found that an ethanol production plant can produce 120–135 gallons of ethanol per ton of Recyllose™.

Since Recyllose™ is low in lignin (a major component of plant cell walls that is difficult to degrade), and lignin can be inhibitory to efficient conversion to ethanol, Hausthor said the material improves cellulosic plant operational efficiency  20 percent over higher lignin content feedstocks.

Qteros’ CEO William Frey said that with previous technologies, a cellulosic ethanol plant would have to produce roughly 20-30 million gallons per year (MGY) in order to be profitable. With the proposed Qteros-ACT process, Frey said, production with these economics could be viable at a smaller scale.

ACT President Dr. Refael Aharon said that a wastewater plant that handles 150 million gallons a day (serving a population of about 2 million people) can be sufficient to supply a smaller-scale ethanol plant with cellulose.

Qteros and ACT said that by applying the proprietary one-step Qteros fermentation technology to ACT’s Recyllose™ feedstock, they have achieved a high-yield, waste-to-ethanol production process that is superior to other industrial-scale processes both technically and economically.

The research has been supported in part by a grant from the Binational Industrial Research and Development (BIRD) Foundation. The BIRD Foundation funds joint efforts between Israel and the United States, and their financial support has resulted in the very successful collaboration of Qteros’ and ACT’s technologies.

The U.S. government has set a goal of increasing annual production of alternative fuels like ethanol from today’s 10 billion gallons to 36 billion gallons by 2022. Qteros predicts that this announcement will move the country one step closer to realizing its goal. “Ethanol is the best next-generation fuel,” said Frey.

October 5, 2009

Renewable Energy Around the Web: October 5, 2009

Our weekly compilation of renewable energy news and information around the Web.

Three Cheers for Asset-Backed Securities

We covered a modest proposal from our friends at Biofuels Digest to create a publicly-funded securitization vehicle for buying participations in renewable energy loan pools.  A publicly-funded vehicle would be nice to have but would probably take Congressional action.  In the mean time, a private securitization vehicle would also work if there were enough deep pocket sponsors to get it off the ground.

Biomass Mapping Application

With funding from the DOE and others, the National Renewable Energy Laboratory has developed a biomass mapping application.  Users can select a location on the map, quantify the biomass resources available within a user-defined radius, and then estimate the total thermal energy or power that could be generated by recovering a specific portion of that biomass. While the tool is useful in refining the prospecting process of site identification, it should not replace the need for an on-site biomass evaluation, according to Anelia Milbrandt, NREL senior energy resources analyst.

The tool took about a year to develop, and was made available in August. Biomass resource data are based on an assessment performed by NREL in 2005, which was updated prior to the release of the application. Infrastructure and other pertinent data were provided by the EPA, USDA and other agencies.  The tool is available here

Bio-Char Legislation

A group of senators that includes Majority Leader Harry Reid have introduced a bill that would provide loan guarantees and other incentives for the removal of bio-char from publicly-owned lands. 

The Water Efficiency via Carbon Harvest and Restoration Act of 2009 (S.B. 1713) (introduced September 24, 2009) would establish U.S. Department of Interior and USDA loan guarantee programs to develop biochar demonstration projects, including mobile and fixed biochar production units.

The purpose of the act is restore the natural hydrology of Western landscapes by removing water-intensive plant species, reduce dangerous forest and rangeland fuel loads, develope technologies to convert undesirable invasive plant species to useful materials and to develop markets for those materials, and provide technologies to land managers to continue those processes into the future.

Future Biofuels Imbalance?

Some scientists are wondering whether our supply of biofuels (biodiesel and ethanol) will outstrip demand with some researchers speculating that U.S. biofuel supply could exceed demand as early as 2015. 

Bully for Jatrodiesel

Inc. Magazine featured Jatrodiesel on its list of top performing companies in 2009.  (Coverage in Biodiesel Magazine). 

The magazine placed Jatrodiesel at the 550 slot and ranked it 22 in the energy sector. The selection is evidence that there’s still money to be made in the biodiesel industry.  

“The biodiesel plants that are not doing well basically have two problems,” said Raj Mosali, CEO of Jatrodiesel. “Either they don’t have any cash on hand, or they can’t sell their biodiesel because their price is too high. Right now, there is about 35 cent margin between a producer’s cost and the price of diesel fuel, so a plant that is using multi-feedstock technology and has a pretty lean operation should be able to make money.”

Some biodiesel plants have inefficient technologies and can’t make biodiesel at a reasonable price. In addition, they often don’t have capital to make improvements. “Our growth is coming from our ability to fix issues at existing plants, not from building turn-key operations,” Mosali says. “The plants that do have cash are putting in polishing equipment or adding distillation columns or glycerin recovery, which can really add to the bottom line.”

October 2, 2009

Gevo Offers Biobutanol Retrofits for Ethanol Producers

Biofuels Digest reports that Gevo has launched a 1 MGY biobutanol plant in St. Joseph, Missouri.

Butanol is formed through fermentation, like ethanol, but has a higher energy value and a lower vaporization profile.  This makes butanol an ideal drop-in fuel for existing gasoline vehicles or as a supplement to biodiesel.

Gevo has also announced the formation of Gevo Development to develop a fleet of biorefineries based on converting existing ethanol plants to Gevo’s proprietary technology for biobutanol.  The new company will be managed by Mike Slaney and David Black, who co-founded and raised over $430 million to capitalize ASABiofuels. In August, 2007, VeraSun Energy Corporation acquired ASAB, its three ethanol production facilities (totaling 300 million gallons per year of ethanol capacity) and three development sites for $725 million.

Gevo CEO Pat Gruber said that the “Gevo Development’s business model is open — it will include acquisitions, joint ventures and tolling arrangements providing flexibility to existing owners and lenders.”

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