Posted August 17, 2010, at 2:51 p.m. CST

Several utilities are in discussions with Nebraska-based Next Step Biofuels Inc., interested in cofiring the company's corn stover PowerPellets with coal. The corn stover pellets are attractive because they pulverize and process like coal, and ship and store like grain, according to Will Gardenswartz, Next Step Biofuels spokesman.

Nebraska utility Omaha Public Power District will test burn 2,200 tons of the PowerPellets, which will replace 5 percent of the coal usage in one of five boilers, and is the furthest along in supply negotiations with Next Step, Gardenswartz said. If all goes well, a contract could be in place by mid-October.

Next Step harvests the corn stover with its own equipment from farms within a 50-mile radius. "The economic radius of corn stover pellets is pretty small," he said. "You'll ruin the economics of the business if you're going 100 miles." The stover is baled and brought to the pellet plant as needed. The equipment used is pretty standard, Gardenswartz said, but proprietary steps are required to rid the harvested stover of pebbles, dirt and other impurities that can harm the boilers or make extra work for operators. "There is an art to it," he said.

The pellets can be transported more easily than the corn stover, allowing for distances of 100 to 150 miles before economics become a problem. Next Step is looking into developing contracts with utilities outside of Nebraska, as well.

One pellet plant needs about 180,000 tons of stover, which equates to between 50,000 and 70,000 acres of farmland. Next Step harvests about one-half to two-thirds of the corn stover on a given field, but the amount is determined by an agronomic study of each field. "You have to be very smart about leaving the right amount of stover in the field," Gardenswartz said. But as corn yields increase, so does the amount of residue left behind and leaving too much can hinder next year's crops. "There's more of everything," he said. "There's more biomass on the land. That's a good trend for us."

On average, wood has a higher energy content than corn stover at 8,000 Btu compared with 7,000 to 7,500, but PowerPellets bring other advantages to the table, Gardenswartz said. Since corn stover pellets pulverize just like coal, the largest investments a utility would need to make would be for storage and conveyors to feed the pellets into the boilers.

Gardenswartz declined to release a cost figure for the PowerPellets, as negotiations are still underway with OPPD.