Sweetwater Energy signs 2nd cellulosic ethanol deal; 15-year, $100M agreement with Front Range
16 January 2013
Sweetwater Energy, Inc., a cellulosic sugar producer, announced a 15-year commercial agreement with Windsor, Colorado-based Front Range Energy, to generate cellulosic ethanol at Front Range’s current corn-ethanol facility. The agreement, Sweetwater’s second such (earlier post), has a total potential value in excess of $100 million, and requires a minimal capital outlay by Front Range while stabilizing the company’s feedstock costs.
Sweetwater will use its patented, decentralized process to convert locally available cellulosic, non-food biomass, such as crop residues, energy crops, and woody biomass into highly fermentable sugar, which Front Range will ferment into ethanol.
Supplementing our corn with this sugar allows us to displace some of the volatility of the corn market, with the goal of moving a higher and higher percentage of our production to cellulosic.—Dan Sanders Jr., Vice President of Front Range Energy
We’re going to kick this off by replacing about 7 percent of the corn currently processed, and as our partnership grows and we see how well both parties are benefiting from the cellulosic ethanol production, we’ll increase the amount of cellulosic material and really open up the cellulosic markets to Front Range.—Arunas Chesonis, Chairman and CEO of Sweetwater
Sweetwater will place one of its cellulosic facilities near the Front Range site and will deliver enough refined monomeric sugar for Front Range to produce up to 3.6 million gallons of ethanol per year during the initial phase of the relationship.
The economics afforded by Sweetwater’s cellulosic sugar and the patented hub-and-spoke distributed model will ultimately determine the pace and volume with which Front Range’s corn ethanol facility will migrate to Sweetwater’s cellulosic feedstocks.
One month ago, Sweetwater announced that the United States Patent and Trademark Office (USPTO) had issued US Patent 8,323,923 to Sweetwater for the manufacture and deployment of distributed pretreatment units designed for the extraction of sugars from any cellulosic feedstock for the production of ethanol.
The patent allows Sweetwater to deploy its cellulosic sugar conversion facilities in a “hub and spoke” fashion, providing broad scale diversity for cellulosic ethanol production that takes full advantage of economic and capacity constraints surrounding cellulosic biomass.
Sweetwater produces low-cost sugars from non-food plant materials, including waste materials such as crop residues, wood thinning, or non-food, purpose-grown crops such as energy sorghum. This highly fermentable sugar solution is sold to refineries, which use it to produce biofuels, biochemicals, and bioplastics.
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