Sweetwater Energy, Ace Ethanol partner for cellulosic production

By Wisconsin Bio Industry Alliance | January 04, 2013

Ace Ethanol, Wisconsin’s first large scale corn ethanol production facility announced another first today. Ace Ethanol, will partner with Sweetwater Energy Inc., a Rochester, N.Y.-based cellulosic sugar producer 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 percent corn to a combination of corn starch and 7 percent 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.

“While the ethanol industry in Wisconsin has now doubt seen its fair share of challenges in the past year, it’s exciting to have member producers such as Ace Ethanol who continue to innovate, look to the future and provide alternative energy for our nation,” said WBIA Executive Director Joshua Morby.

The Wisconsin Bio Industry Alliance is a diverse group of businesses, environmental groups and statewide and local organizations that have come together to build both public and legislative awareness of the Bio Industry in Wisconsin.