Posted December 11, 2009, at 9:14 a.m. CST

Inbicon A/S recently announced it has signed a memorandum of understanding (MOU) with two U.S. companies to collaborate on the licensing, development and construction of a biomass refinery that will produce 20 MMgy of cellulosic ethanol at the Spiritwood development park in Jamestown, N.D. Inbicon will serve as the technology provider and will provide support and quality assurance through the facility's projected 2012 start-up date. Renewable energy company Otoka Energy will be owner/operator of the facility, which will be co-located with a 62 megawatt coal-fired power plant owned and operated by Great River Energy.

Inbicon CEO Niels Henriksen said the biomass refinery will utilize Inbicon's proprietary technology to convert more than 400,000 tons of wheat straw into ethanol, lignin and other coproducts. Steam from the Great River Energy power plant will be used to power the entire biomass refinery. In exchange, the refinery will send lignin created as a byproduct of its ethanol production to the power plant to be used to offset some of the plant's operational needs for fossil fuels. In addition, because Inbicon's process results in a clean lignin that can be burned by the power plant without treatment, there is no risk for boiler damage, according to the company. "Energy exchange between the two plants dramatically increases the efficiency of both operations and gives each a small carbon footprint," Henriksen said.

The Spiritwood project is being modeled after Inbicon's recently opened demonstration-scale facility in Kalundborg, Denmark. The Kalundborg facility, which held its grand opening in November, will process approximately 30,000 tons of wheat straw annually and produce about 1.4 MMgy. In addition, Inbicon hopes to use the Kalundborg site as a technology campus to foster worldwide scientific collaboration that will advance cellulosic conversion technology. The campus has already been spotlighted by world leaders as a representative of the next generation of fuel and power production. Attendees of the United Nations' December climate change conference in Copenhagen were given tours of the facility and were transported in vehicles powered by the facility's cellulosic ethanol.

There will be many similarities between the Kalundborg and Spiritwood, but the difference in scale of the facilities means there will be a few differences as well. The much larger scale of Spiritwood carries a much higher price tag. Total project costs for Spiritwood are estimated at between $180 million and $220 million. By comparison, the Kalundborg facility was completed for approximately $79 million. Acquiring the feedstock required to fuel Spiritwood will be difficult, but the company has received promising support from North Dakota government officials.

According to Tom Corle, co-founder of G-Team Consultants, which represents Inbicon in North America, N.D. Gov. John Hoeven has been supportive and has made significant efforts to make the Inbicon-Otoka-Great River Energy project successful. The state recently awarded Otoka a biomass supply and transportation development grant and, according to Corle, Jamestown-area wheat farmers have been approached by project members and are receptive to providing feedstock to the plant. "We've met with quite a few farmers in Jamestown and there is a very supportive community," Corle said.

Corle said Inbicon plans to announce another MOU soon, but was unable to comment further. The company initially intended to co-locate its cellulosic facilities with corn ethanol plants, but those projects have been difficult to establish and Inbicon has expanded its focus to include other manufacturing facilities and power plants. "The problem is that a lot of ethanol plants are financially in hard straights right now, so those projects have been advancing a little slower than some of these other opportunities," Corle said. "We really see cellulosic ethanol working in conjunction with a whole symbiotic relationship with other manufacturers and power stations, so that they can co-exist and make multiple products other than just ethanol. That's how we see the numbers start to work to turn a profit on some of these plants."

Looming U.S. greenhouse gas cap and trade legislation could prove to be beneficial for companies such as Inbicon that are capable of producing renewable fuel standard-compliant cellulosic biofuel while simultaneously reducing the emissions of its host facilities. "I think 2010 is going to be a big year for cellulosic ethanol and I think it's really going to come around," Corle said. "The technology seems to be maturing at a pace where we are ready to build commercial installations."

SOURCE: ETHANOL PRODUCER MAGAZINE