Denmark's DONG Energy and local partners will explore the possibility of building a bioenergy complex, including a large-scale bioethanol plant to turn straw into fuel.
State-owned DONG has joined two local energy providers and a waste firm to form a consortium called Maabjerg Energy Concept, which will determine the feasibility of the project in western Jutland over the coming 15 months.
"We are looking very positively at this," chairman of Maabjerg Energy Concept Jorgen Udby told Reuters.
He said the partners would invest 39 million crowns in the feasibility study. The plant itself could cost 2-3 billion Danish crowns ($390 million – $580 million).
If the consortium decides to build a plant with capacity of at least 50 million litres (13 million gallons) per year, it could be ready for production by 2016, he said.
"Then it would definitely be the first of this type of concept in the world," Udby said.
Besides a new bioethanol plant, the consortium will also look at expanding an existing biogas plant and converting an existing biomass-fired power plant to make it capable of burning waste from bioethanol production.
FULLY UTILISE STRAW
"The main idea is to fully utilise the raw material, straw," Udby said. "Only around 25 percent of the straw's energy is captured in bioethanol."
The residues of ethanol production, molasses and lignin, can be inputs in the biogas plant and the biomass-fired power plant.
Second-generation bioefuel, sometimes also called cellulosic ethanol, can be made of non-food plant material, such as straw, corn cobs or corn stover, wood chips or sugarcane bagasse. It avoids problems linked to producing ethanol from food crops.
Like first-generation biofuels, second-generation bioethanol can be blended with gasoline to run cars and help meet targets for green energy. But production is still in its infancy.
Dozens of pilot and demonstration projects for cellulosic ethanol are under way around the world, but groundwork for the first commercial-scale plants is only getting started.
DONG Energy, an oil, gas and electricity producer, is developing technology for second-generation biofuel through its Inbicon unit, which has a 1.5 million gallons per year pilot plant at Kalundborg.
DONG and Inbicon hope also to export the technology.
Danish industrial enzymes producer Novozymes (NZYMb.CO), which supplies enzymes for bioethanol production, is watching the project closely and hopes the new plant will be built.
"We see this as an important next step from pilot plants to large-scale projects for second-generation bioethanol," Novozymes' chief of public affairs Flemming Voetmann said.
"This project could definitely be epoch-making," he said.
Udby said he expected the project to be funded partly with public loans and partly with money from institutional investors.
The project depends on political support for second-generation biofuel in Denmark and perhaps a state guarantee that would help it through if the venture lost money, he said.
Once the plant is running, the production cost of the ethanol will be competitive to gasoline at market prices so it would no longer depend on continued public support, Udby added.
