UPDATE: Green Plains Renewable Energy approved for $2,190,407 grant

DES MOINES - Green Plains Renewable Energy's alternative energy development plan took a huge step forward Wednesday evening as it was approved for a $2,190,407 grant by the Iowa Power Fund.

According to Shelly Smith, director of Marketing for the Shenandoah Chamber and Industry Association (SCIA), funding was approved for the project, but negotiations will continue in the coming weeks as to the fine details.

"We were pleased with the outcome," said Smith in a phone conversation from Des Moines Wednesday evening. "We had a lot of good comments from the board. They were very enthusiastic about (lowering) the carbon dioxide produced as well as the carbon footprint."

SCIA Director Gregg Connell, as well as representatives from GPRE and GreenFuel, made the presentation to the Iowa Power Fund Board Wednesday. The project the GPRE is working on is using the ethanol plant to develop a small-scale algae farm to create energy.

Smith said working out the fine details mostly has to do with licensing issues. "The Iowa Power Fund wants to see if they can get a piece of the licensing for new technologies used," said Smith. "That way they can use the money to help fund future projects and put back into Iowa."

Algae are the fastest-growing plants in the world. Like other plants, they use photosynthesis to harness sunlight and carbon dioxide, creating high-value compounds in the process.

Energy is stored inside the cell as lipids and carbohydrates, and can be converted into fuels such as biodiesel and ethanol.

Of the six projects that have made it this far in the process, five were approved by the Iowa Power Fund Board Wednesday. However, the GPRE project was approved for the most money of any of the five projects.

According to small-scale experiments by the Department of Energy and the National Renewable Energy Laboratory, using algae to produce biodiesel may be the only viable method by which to produce enough automotive fuel to replace current world gasoline usage.

Microalgae have much faster growth-rates than terrestrial crops. The per unit area yield of oil from algae is estimated to be from between 5,000 to 20,000 gallons per acre, per year; this is seven to 30 times greater than the next best crop, Chinese tallow (699 gallons).

"To put it in prospective, if you had a diesel car, one acre of algae would allow you to drive that car 370,000 miles, compared to about 2,400 miles on soybean oil, which is the basis for most bio-diesel," said Connell.

The United States Department of Energy estimates that if algae fuel replaced all the petroleum fuel in the United States, it would require 15,000 square miles (38,849 square kilometers), which is a few thousand square miles larger than Maryland.

Wednesday's grant will allow GPRE and GreenFuel to conduct a 195-day on-site-test for optimal algae production.

The expected production is about eight kilograms per day of algal biomass, and the cost is approximately $2,803,844. GPRE would be responsible for slightly over $600,000, which is not covered by the Iowa Power Fund grant.

The second phase, which would cost about $4,209,266 would be to build a facility about 10 times the size of the first one and would produce roughly 81 kilograms a day of algal biomass.

The final phase of the project, which would be a commercial facility would cost around $80 million and produce 850 kilograms per hectare a day of algal biomass.

"This project not only can revolutionize the biofuel industry in the state of Iowa, but in one 250 acre, 100-hectare system (the construction cost) is about $80 million. About 40 percent, which is $28 million, is in materials, and there's no reason that can't be produced in the state of Iowa, most especially in Shenandoah," said Connell.

"We're talking a potential $5 to $10-billion market, and we certainly would like to be a part of that."

Two other important factors to remember, according to Connell are that it is not a food source there would be a competition over, and the algae is all naturally occurring.

"These are all algae that are natural to our environment there are no GMOs (genetically modified organism)," he said. "The reason they grow to this level is the amounts of (carbon dioxide) and the water available."

Other advantages of algae include its versatility, as well as its potential for being an important source of food for hogs and chickens.

Algae can also grow on marginal lands, such as in desert areas where the groundwater is saline.

It can grow anywhere from the tropics to the Arctic Circle, in fresh and saltwater, and even in waste water.
Proteins produced by algae make them valuable ingredients for animal feed.

This is also a way for GPRE to use its waste products, namely carbon dioxide and waste water, to produce something valuable and prevent them from becoming greenhouse gases.

GreenFuel uses a portfolio of technologies to profitably recycle CO2 from smokestack, fermentation, and geothermal gases via naturally occurring species of algae.

Algae can be converted to transportation fuels and feed ingredients or recycled back to a combustion source as biomass for power generation.

Industrial facilities need no internal modifications to host a GreenFuel algae farm. In addition, the system does not require fertile land or potable water.