Ethanol

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Ethanol

Currently, 100 ethanol plants are operating in the United States, with 41 new plants or expansions under construction. The industry produced 4.7 billion gallons of ethanol in 2005, and the renewable fuels standard will provide a market for nearly 8 billion gallons by 2012. The industry is expected to invest an estimated $6 billion to build 4.3 billion gallons of new ethanol capacity by 2012 to meet this growing demand. As the market adjusts to meet this projected growth, the size and location of new dry mill ethanol plants are changing-from the current typical profile of 40 million to 50 million gallon per year (mmgy) plants located in the Midwest (where electricity prices are generally low) to new 100 mmgy plants sited not only in the Midwest, but also in the Northeast and California, where ethanol demand is concentrated and electricity prices are generally higher. These market shifts and available financial incentives are making CHP an even more economical choice for new facility construction and fuel production.1

Dry mill ethanol plants are an excellent fit for CHP. They have large and relatively constant power and steam demands, and they operate 24 hours a day, 365 days a year. The size of the electricity and steam loads at ethanol plants closely matches the size of commonly available CHP technologies. Energy represents a large potion of dry mill ethanol production costs, second only to the cost of the corn used as the feedstock.1

Demand for ethanol is growing. Ethanol is the primary replacement for MTBE, which is now banned in 22 states because of its environmental effects. In addition, ethanol's relative value has increased as gasoline prices climb. The inclusion of a new renewable fuel standard and fuel production tax credit in the Energy Policy Act of 2005 is expected to dramatically increase demand for ethanol and construction of new dry mill ethanol plants in the near future.1

What can CHP do for Dry Mill Ethanol Facilies?

Combined heat and power can be an excellent solution for the energy needs of an ethanol plant. With CHP, a plant can:2

Generate electricity and steam reliably on-site
Reduce energy and operating costs
Reduce greenhouse gas emissions and other environmental impacts
Optimize the use of alternative fuels

Current Status

Despite CHP's excellent fit, adoption in this industry has been slow. Currently, only five U.S. dry mill ethanol facilities incorporate CHP into their operations:

Adkins Energy, LLC; Lena, IL; one 5-MW gas turbine
U.S. Energy Partners, LLC; Russell, KS; two 7.5-MW gas turbines
Northeast Missouri Grain, LLC; Macon, MO; one 10-MW gas turbine
Otter Creek Ethanol; Ashton, IA; one 7-MW gas turbine
East Kansas Agri Ethanol; Garnett, KS; one 1-MW recuperative thermal oxidizer/steam turbine

In Louisiana, there are currently two closed ethanol plants still capable of operating. These two plants have a total capacity of about 77 million gallons/year. They are the 35 MM GPY capacity Shepherd Oil plant near Jennings and the 42 MM GPY capacity Mississippi River Alcohol Corporation's (Missalco) plant near Belle Chase next to a grain terminal on the Mississippi. However, ethanol is no longer produced in Louisiana. This is the direct result of elimination of all state ethanol subsidies in 1989. All plants shut down by 1990.

Future Potential

The following are plants announced or under construction in Texas. Industry experts project that by 2008 these plants will be producing 500 million gallons of ethanol per year. Texas corn and sorghum producers and cattle owners will be major contributors to these new markets.

Panhandle Energies, Dumas - 30 million gallons/year; feedstock is corn and milo; Announced late 2004
White Energy, Hereford (Panhandle) - 100 million gallons/year; feedstock is corn and milo; Operational by May 2007
Panda Energy, Hereford (Panhandle) - 100 million gallons/year; feedstock is corn and milo; fuel is cattle manure and cotton gin waste; Operational by second half of 2007
Panda Energy, Sherman County (Panhandle) - 100 million gallons/year; feedstock is corn and milo; fuel is cattle manure biogas; Operational by fourth quarter of 2007
Biofuels Energy Corporation, Raymondville - 4 million gallons/year; Texas' first cellulosic ethanol plant (demonstration project); Operational by third quarter of 2006
Texas BioEnergy Marketing Associates, Central Texas - five distilleries at 12 million gallons/year each; feedstock is sweet sorghum; Announced June 2006
Blackland Ethanol Corporation, Central Texas - 50 million gallons/year; feedstock is corn and milo; Announced July 2006

There are also three planned ethanol plants to be located in Oklahoma.

Oklahoma Ethanol, LLC, Enid - 55 million gallons/year; feedstock is grain sorghum and corn; Operational in 2008
Orion Ethanol, Enid - 55 million gallons/year; Announced September 2006
Orion Ethanol, Shattuck - 55 million gallons/year; Announced September 2006

How is CHP used in Ethanol Plants?

CHP technologies are flexible, providing many ways to apply CHP to the dry milling ethanol process.

The most common CHP technology used in ethanol plants today consists of a gas turbine-electric generator unit, placed in tandem with a waste heat boiler. The turbine-driven generator provides electricity for the facility and the turbine exhaust is used in a waste heat boiler to produce process steam.
Interest in biomass and coal CHP is growing. Biomass can be an option for ethanol plants located near sources of agricultural or forest waste or for plants looking to use the process byproducts as a fuel source.
Ethanol plants with large thermal oxidizer loads can use a waste-heat boiler to produce steam from the oxidizer exhaust. High-pressure steam from the waste-heat boiler is used in a steam turbine-generator unit to produce electricity. Low-pressure steam from the back end of the turbine is used to meet process heat requirements.
Other CHP options are also being explored for ethanol plants, including the integration of dryer exhaust VOC destruction into gas-fired turbine-generator systems.

Is Your Facility a Good Candidate for CHP?

Do you use more than 20,000 pounds per hour of steam?
Do you pay more than 6 cents per kWh for electricity?
Is reliable high-quality power important?
Is it important to reduce energy costs and increase the overall energy efficiency of your ethanol process?
Are biomass or alternative fuels readily available near your site?
Do you want to increase your plant's environmental performance?

If the answer to two or more of these questions is "yes," CHP can benefit your facility. Please contact the Gulf Coast CHP Application Center for more information.

Case Studies

U.S. Energy Partners & City of Russell, KS

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The City of Russell, Kansas teamed with U.S. Energy Partners and installed a CHP system that provides cost-effective electricity for the City of Russell and cost-effective energy for U.S. Energy Partners' 40-million gallon/year ethanol plant. In this CHP application, Russell's gas turbines generate 15 MW of electricity, of which 3 MW are used by the ethanol plant. After powering the turbines, the turbine exhaust is used a second time in the ethanol plant to produce 64,000 pounds/hour of steam for the processes at the plant. After producing steam, the remaining energy in the turbine exhaust is used a third time to heat the plant's rotary grain dryers. The CHP plant uses 28% less fuel than a typical system with onsite thermal generation and purchased electricity. The plant also reduces greenhouse gas (GHG) emissions by 21,000 tons a year and nitrogen oxide emissions by 54 tons per year.