Abengoa Bioenrgy and Mid-Kansas Electric Co. have announced a partnership to build the nation's first cellulosic ethanol and biomass electrical power plant in southwest Kansas.
The innovative plant is scheduled to be in operation by 2012 and produce 15 million gallons of cellulosic ethanol and 115 megawatts of power annually. Mid-Kansas has agreed to buy 75 megawatts of the base load electricity provided by the plant.
The plant will be built near Hugoton in Stevens County. It will use biomass from crop residue as a fuel source, utilizing mostly corn stover with some wheat straw, milo stubble and switchgrass, according to Abengoa.
"As an international energy company, we believe this project is an important part of our continual growth in bioenergy," said Javier Salgado Leirado, president and CEO of Abengoa Bioenergy. "Advancing this project required the perfect match of agricultural resources, technology, and a utility partner—all present in our partnership with Mid-Kansas. The agreement terms allow us to move forward with the project and bring significant investment to Kansas."
The facility will be constructed at a cost of $550 million and will generate about 100 full-time construction jobs during the 24-month building period. Construction is expected to generate $17 million in wages. Financing comes from Abengoa equity, a federal Department of Energy grant for $76 million and other potential grant sources.
"The Mid-Kansas board is continually looking for opportunities to develop base load resources to add to the Mid-Kansas generation portfolio," said L. Earl Watkins, Jr., president and chief executive officer of Mid-Kansas. "This power purchase agreement will generate base load while benefitting area farmers. We are pleased to support this effort and look forward to a successful relationship with Abengoa Bioenergy."
The contract calls for Mid-Kansas to purchase all electricity from the facility for a 20-year contract period with rights to extend for additional years. Pioneer Electric Cooperative Inc. will provide retail electric service to the facility.