Energae signs purchase agreement for Alchem, investors sought

By Holly Jessen | March 07, 2012

A corn ethanol plant that has been idle since October 2007 and was sold at auction in the fall of 2010 is now being reinvented as a 10 MMgy sugar beet-to-ethanol production facility. Energae LP, a Clear Lake, Iowa, energy investment group, has announced it signed a purchase agreement and is now working to find sugar beet farmers to supply the plant with feedstock. “We have committed funds for it, but besides that, we want the sugar beet growers to be part of it,” said Jerry Krause, general partner in Energae, which is pronounced energy.

The group hopes to begin producing ethanol this fall, in time for sugar beet harvest. Letters will be sent out to sugar beet growers in a 50-mile radius of the plant and meetings are planned at the site next week. Grafton is located about 50 miles south of the Canadian border in an area known for sugar beet production, according to an American Sugar Alliance map of sugar beet production.

Sugar beet farmers in that area are already supplying sugar beets to American Crystal Sugar Co., which operates five sugar beet processing plants within 20 to 100 miles of Grafton and produces sugar for human consumption. Energae will be asking producers to commit to producing a certain amount of acres of sugar beets for the ethanol plant. “We don’t feel it will be difficult because we have talked to quite a few,” he told EPM. “We’re not asking for a lot of acres, we just need a certain amount of tons to produce the 10 million gallons a year.” He declined to give a specific number.  

The facility started out as a potato flake plant and began producing 3.5 MMgy of fuel ethanol in 1983. It will need a significant amount of renovation, Krause confirmed. At the auction in 2010 potential buyers pointed out there were areas of the roof where sky could be seen from inside the building. On the other hand, millions of dollars in equipment upgrades were completed after the plant was initially idled.

Energae also operates Permeate Refining in Hopkinton, Iowa. That 5 MMgy plant produces ethanol from mainly corn and wheat starch, but it can also utilize other feedstocks such as corn syrup, cheese byproduct whey and paper products, he said. Both plants were designed by the same company in Germany.

The Grafton plant will sell sugar beet pulp leftover at the end of fermentation process as a livestock feed. “It’s different than the waste product that the sugar beets put out because we put some additives to it to make it valuable to the cattle growers,” he said.

Other developers are looking into energy beets for ethanol production, including Green Vision Group, which wants to build dedicated energy beet ethanol plants in North Dakota. Energae is targeting sugar beets because they are already being grown in the area around the former Alchem plant, Krause said, adding that energy beets are still a possibility down the road. “We’d sure take a look at it,” he said.