POET, East Kansas Agri-Energy earn Energy Star designation

June 20, 2008

The EPA has awarded the Energy Star designation for energy efficiency to POET Biorefining in Ashton, Iowa, and East Kansas Agri-Energy in Garnett, Kansas. The 56 Mgy POET corn ethanol plant in Ashton, which opened in 2005, is equipped with combined heat and power (CHP) that generates up to 7.2 MW of electricity and requires 16 percent less fuel than a conventional process. The process saves 18,900 tons of CO2 emissions per year. The East Kansas Agri-Energy dry mill ethanol plant in Garnett, Kan., opened in 2005. The steam turbine system uses 23 percent less fuel than conventional thermal generation and purchased electricity. The plant reduces carbon dioxide emissions by an estimated 14,500 tons per year.

Poet background

Last month, Poet canceled the development of a 65 Mgy corn ethanol plant in Glenville over permitting delays. The company did not mention growing anti-corn ethanol sentiment as a factor in its decision.

“When we selected Glenville for a second ethanol production facility, we believed that we would be holding its grand opening sometime around today,” said Larry Ward, Vice President of Project Development for POET. “Early discussions with the appropriate authorities indicated there wouldn’t be any unusual permitting concerns due to the plant’s close proximity to another POET plant. However, permitting has delayed the project by more than a year and has caused a significant amount of additional costs making it less attractive than other potential projects in the Eastern Corn Belt.”

Last month, Poet said that it is reconsidering its cellulosic ethanol plant in Emmitsburg, Iowa following a decision of the Iowa Power Fund to defer consideration of a request for a $20 million grant.

“[The decision] will cause us to step back and take another look at the project. We’ll have to see what happens,” said Poet’s Jim Sturdevant in comments on the decision. The Iowa Power Fund has $25 million each year to disburse to support bioenergy projects across the state, and its board members said that the $20 million request from Poet would not leave enough funding for other projects.

Poet received an $80 million grant from the Department of Energy and has been seeking additional capital for its commercial-scale cellulosic ethanol plant, called “Project Liberty”.

POET also recently announced that its Emmitsburg, IA cellulosic ethanol plant, jointly funded with the US Department of Energy, will produce 125 Mgy including 25 Mgy from corn fiber and cobs. The plant, which will be operational in 2011, will pay between $30 and $60 per ton of cobs and fiber for the 850 tons per day required by the plant. The cob price equates to a price of $0.63 and $1.26 per bushel, compared to more than $5 per bushel for corn.

The CEO of POET said that the company will increase production capacity to at least 1.5 billion gallons in 2008 through new plant construction. Speaking at the Reuters Global Agriculture and Biofuels Summit, Jeff Broin said that the company expects also to add cellulosic fuel capabilities to most of its 22 existing plants. Following the completion of the proposed merger of VeraSun Energy and US BioEnergy, VeraSun will have 1.6 billion gallons in planned capacity in 2008. POET is constructing four new ethanol plants and expanding one other.

In South Dakota, POET’s ethanol plant near Chancellor, will be expanded from 50 to 100 Mgy without expansion of fossil fuel usage. The expansion includes the addition of a solid waste fuel boiler that will produce more than 50 percent of the plant’s power needs.

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