Besides a payoff in cleaner coal plant emissions, use of the pellets promises new jobs and markets in the Midwestern farm belt.
The pellets — a highly compressed mix of pulverized sawdust, switch grass and the fast-growing miscanthus plant — look and feel like the wood in inexpensive furniture made from engineered scrap. The pellets can ship the same way coal travels, by river barge.
So far, DP&L has successfully burned a coal mix consisting of up to 7 percent of the pellets by weight. The testing has included hundreds of tons of the pellets, which throw off three-quarters of the heat given by coal combustion, said Mark Linsberg, director of development.
“It’s feasible to do,” he said. “We’re learning what the impacts are.”
In his state of the state address last week, Gov. Ted Strickland announced a plan to create a $40 million Energy Gateway Fund — $30 million in federal stimulus funds and $10 million in state funds.
The state would try to match its money dollar-for-dollar with private investment funds to finance solar, wind, biomass, and fuel cell manufacturing. The fund could be operational by late March, said Mark Shanahan, the governor’s energy adviser.
DP&L, according to Ohio law, must generate 12.5 percent of its power from renewable resources by 2025.
Pricing for the pellets remains unknowable, as a market is still emerging. At current rates, said Joe Jancauskas, DP&L’s manager of generation performance, they’re sometimes cheaper — and sometimes more expensive — than coal.
As a market matures, prices should moderate. The beauty of the pellets is that they can be burned without any upgrades to the coal plant, Jancauskas said.
According to Linsberg, the utility will spend the remainder of 2010 testing the pellets.
Biofuels are safer for the environment and check man-made global warming because when burned, the carbon dioxide emissions are comparable to the carbon dioxide the plant absorbed while growing. They are naturally lower in sulfur and other pollutants.
Pellet supplier Midwestern Biofuels, LLC, which has a plant in South Shore, Ky., was founded by two coal industry veterans. Co-founder Brandon Minix said Midwestern can produce 130,000 tons of biofuel annually and is aiming for 500,000 tons of capacity toward year’s end.
Related employment should grow from 36 jobs to about 200 in that period, he noted. Customers include utilities in Ohio and North Carolina, Minix said, with some attempting to burn up to 10 percent of their mix in biofuel.
The company and its affiliates have leases for 23,000 acres in Kentucky to grow the plants for the biofuel, Minix said. He said he’s looking at growing plants in Ohio also.
“The more volume we can push out, the lower our cost can be,” he said. “In our area, there is an abundance of raw materials.”
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