Sweetwater Energy, Inc., a Rochester NY-based cellulosic sugar producer, today announced a 15-year commercial agreement with Windsor, Colorado-based Front Range Energy, to generate cellulosic ethanol at Front Range’s current corn-ethanol facility.
Sweetwater will use its patented, decentralized process to convert locally available cellulosic, non-food biomass, such as crop residues, energy crops, and woody biomass into highly fermentable sugar, which Front Range will ferment into ethanol.
The agreement has a total potential value in excess of $100 million, and requires a minimal capital outlay by Front Range while stabilizing the company’s feedstock costs.
“It’s very exciting to be an early adopter of Sweetwater’s technology and to bridge that gap from grain to cellulosic ethanol,” says Dan Sanders Jr., Vice President of Front Range Energy. “Supplementing our corn with this sugar allows us to displace some of the volatility of the corn market, with the goal of moving a higher and higher percentage of our production to cellulosic. We’ve had great success fermenting Sweetwater’s sugar, and from a business standpoint, we have great confidence in Sweetwater’s management team.”
“To say we’re enthusiastic about this relationship with Dan and the whole Front Range team is an understatement,” says Arunas Chesonis, Chairman and CEO of Sweetwater. “They’re a progressive team looking to stay ahead of the curve, and that’s a very rewarding mindset to have in a company you’ll be working with for the next 15 years. We’re going to kick this off by replacing about 7 percent of the corn currently processed, and as our partnership grows and we see how well both parties are benefiting from the cellulosic ethanol production, we’ll increase the amount of cellulosic material and really open up the cellulosic markets to Front Range.”
Sweetwater will place one of its cellulosic facilities near the Front Range site and will deliver enough refined monomeric sugar for Front Range 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 Front Range’s corn ethanol facility will migrate to Sweetwater’s cellulosic feedstocks.
Decentralized Production Patent
Just one month ago, Sweetwater announced that the United States Patent and Trademark Office had issued US Patent 8,323,923 to Sweetwater for the manufacture and deployment of distributed pretreatment units designed for the extraction of sugars from any cellulosic feedstock for the production of ethanol.
“Coupled with the Sweetwater business model, which removes virtually all risk for our customers in the corn ethanol space, this patent has paved the way for this $100 million agreement with Front Range, announced on the heels of our $100 million agreement with Ace Ethanol, two weeks ago,” says Jack Baron, President and COO of Sweetwater.
The patent allows Sweetwater to deploy its cellulosic sugar conversion facilities in a “hub and spoke” fashion, providing broad scale diversity for cellulosic ethanol production that takes full advantage of economic and capacity constraints surrounding cellulosic biomass.
“This process is a major breakthrough for the future of cellulosic ethanol,” says Baron. “The patent protects the first technology to support a viable economic model for scaling the conversion of cellulosic biomass into highly fermentable sugar and subsequently, ethanol. It will mean a great deal to the U.S. corn ethanol industry, and to the profitable future of biofuel production worldwide.”
Sweetwater uses a unique technology to produce low-cost sugars from non-food plant materials, including waste materials such as crop residues, wood thinning, or non-food, purpose-grown crops such as energy sorghum. This highly fermentable sugar solution is sold to refineries, which use it to produce biofuels, biochemicals, and bioplastics. Sweetwater Energy processes carbon captured from the atmosphere by crops and trees over the past few years, as opposed to over 100 million years ago in the case of fossil fuel technologies.