Green Plains Renewable Energy Inc., (GPRE) of Shenandoah submitted one of 16 grant applications to the Iowa Power Fund that passed the first round for an alternative energy development grant.
The project is to produce an algae farm to use the carbon dioxide and waste water, which are byproducts of making ethanol, to produce large quantities of algae.
Algae are high-cost/high-yield feedstocks to produce biofuels. It's one of the most potential sources for meeting our energy needs, producing 30 times more energy per acre than terrestrial crops.
Monday the project moved on to the next phase of the process as the only project recommended by the Iowa Power Fund Due Diligence board for full funding.
"The presentation lasted about an hour, and when we were done the due diligence board recommended that our project be sent to the board for full funding," said Shenandoah Chamber and Industry Director Gregg Connell, who made the presentation. "I think we were the only project that actually moved ahead with the caveat of full funding.
"The board has to make the decision (Wednesday). We hope the board acts in accordance to the due diligence board's recommendation."
The Iowa Power fund is a $100 million state fund to expand Iowa's renewable energy industry.
The fund, which is in it's first year, makes a total of $25 million available for the current fiscal year and next, and $25 million each year for the three following years.
Those dollars could be used to leverage private investment and federal grants.
The proposed funding that Connell and Green Plains are asking for is $2,190,407 from the state, to go along with $600,000 from Green Plains.
This is a project that Connell has been working on for the past couple of years, and presented to GPRE. He said his motivation behind the long hours spent on the process is to bring the project to Shenandoah.
Connell said he believes they will get an answer at tomorrow's meeting, which will allow the project to kick into high gear.
"My understanding is the board will make awards tomorrow," said Connell. "That means we will be able to start our project immediately. We'll probably be able to have staff from GreenFuel, along with laboratories and a small algae farm sometime between June and July."
Founded in 2001, GreenFuel profitably recycles carbon dioxide from flue gases to produce biofuels and feed. GreenFuel is the company which developed the model for using algae to create biofuels.
Connell said the project would be monumental for Green Plains, as well as the city.
"It's a huge thing for Shenandoah," he said. "The eye of the world will be on Shenandoah to see if in fact you can produce mass amounts of algae using (carbon dioxide) and waste water from an ethanol plant to be able to produce mass amounts of biofuel.
"The problem that we have today in the biodiesel industry is the feedstocks, which are mostly soybean oil, is so high that most of them aren't even operating any more. There is a market that's been created, there are mandatory amounts the Federal Government has established that be used by the year 2022 - 36 billion gallons. We will be the focal point of the world to see what happens."