New Ethanol Plant Will Use Waste Heat From Existing Power Plant

In a unique collaboration, a Minnesota electric cooperative will supply the thermal energy requirements for an ethanol plant proposed in North Dakota.

Great River Energy, the Minnesota-based transmission and distribution electric cooperative, has signed a memorandum of understanding with Headwaters Inc. to become co-owner of a 50 million gallon, $65 million ethanol plant on land next to the Coal Creek Station power plant near Underwood, N.D. Representatives at the Coal Creek station have reported that construction costs at the ethanol plant will be about $15 million less by using heat from the existing power plant instead of building their own boiler system. Construction is planned to begin in the fall and the ethanol plant would begin operation the fall of 2006.

North Dakota enacted an ethanol production incentive program in 2003 to help attract new plants (ND Laws 2003, Chapter 57). Their "counter-cyclical" production incentive ties a very generous $0.40 per gallon production incentive to the average North Dakota price per bushel of corn (baseline of $1.80/bushel) and the average North Dakota rack price per gallon of ethanol (baseline of $1.30/gallon). While the incentives on a per gallon basis are large, annual distribution of ethanol incentives cannot exceed $1.6 million and that limits payments to around 4 million gallons per year. Each ethanol facility is limited to a cumulative total of $10 million in state incentive payments.

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