January 07, 2013

Sweetwater Energy and Ace Ethanol to Begin Commercial Production of Cellulosic Ethanol

Sweetwater Energy, Inc., a Rochester NY-based cellulosic sugar producer, announced a first of its kind in the nation, long-term commercial agreement with Ace Ethanol, a Stanley, WI-based corn ethanol production facility, to generate cellulosic ethanol at Ace’s plant for up to 16 years. Sweetwater’s patented, decentralized process will convert locally available cellulosic, non-food biomass, such as crop residues, energy crops, and woody biomass into highly fermentable sugar, which Ace will ferment into ethanol. The entire contract has a total potential value in excess of $100 million, and requires a minimal capital outlay by Ace Ethanol while stabilizing Ace’s feedstock cost over the life of the agreement.

“Ace Ethanol has been bench testing Sweetwater’s cellulosic material for some time and we’re confident that this project will be commercially profitable,” says Neal Kemmet, President of Ace Ethanol. “With Sweetwater, we’ll move from 100% corn to a combination of corn starch and 7% cellulosic sugar as our feedstocks.”

“This is a very exciting time for the industry, and we couldn’t be more pleased to have aligned Sweetwater with Ace,” says Jack Baron, President and COO of Sweetwater. “Our patented, decentralized sugar-production model is designed to let us work in tandem with a refiner’s existing infrastructure, which fosters strong collaboration on both sides.  Furthermore, our refined sugars can be used for biochemical or bioplastics production, giving Ace diversification options in the future. Ace is a progressive industry leader located near affordable biomass; they are financially successful and constantly incorporating proven new technologies to maintain their leadership position.”

“Over the last year we’ve had some incredible conversations with everyone at Ace Ethanol, and the more we talked about the benefits we could provide for one another, the more we realized that a partnership between our two companies made for a fantastic fit,” says Arunas Chesonis, Chairman and CEO of Sweetwater. “We’ve now signed a definitive agreement for a long-term commercial relationship for cellulosic sugar, effectively moving an existing dry-mill corn ethanol facility to cellulosic ethanol without interrupting their operations. And best of all, since the process is scalable, Ace can increase the amount of cellulosic sugar they’re adding to their process in the coming years.”

Sweetwater Energy uses a unique, patented technology to produce low-cost sugar solution from non-food biomass. This sugar solution is sold to biorefineries, which use it to produce biofuels, biochemicals, and bioplastics. Unlike petroleum-based technologies, Sweetwater Energy’s process uses carbon from renewable biomass that is grown or procured domestically, and significantly reduces greenhouse gases.

The Sweetwater-Ace agreement entails Sweetwater placing one of its cellulosic facilities adjacent to the Ace Ethanol site, and delivering enough refined monomeric sugar for Ace to produce up to 3.6 million gallons of ethanol per year during the initial phase of the relationship. The promising economics afforded by Sweetwater’s cellulosic sugar and the patented hub-and-spoke distributed model will ultimately determine the pace and volume with which Ace’s corn ethanol facility will migrate to Sweetwater’s cellulosic feedstocks.

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