Texas plant powers state's electric
grid using only biodiesel
Mar 17, 2007 John Porretto The Associated
Chicken fat and a $3.5 million investment
are behind a breakthrough in the way Texans heat,
cool and light their homes and offices.
Using the slimy, light-colored tallow
as the source for clean-burning biodiesel, Biofuels
Power Corp. flipped the switch on three, 2,000-horsepower
diesel engines a couple of weeks ago, adding a bit
more energy to the massive grid that powers much of
the Lone Star State.
Privately held Biofuels Power and others
in the renewable energy business say the plant is
the first of its kind to produce power for sale on
the open market using only biodiesel, a petroleum-free
alternative fuel made from plant oils like cotton
seed and animal fat - in this case, chicken fat.
The National Biodiesel Board, a nonprofit
trade association, says it knows of no other such
plant running entirely on biodiesel, which can be
used in any conventional diesel engine. A local congressman,
Rep. Nick Lampson, cited the fledgling company for
its groundbreaking venture.
By year's end, Biofuels Power, based
in the Houston suburb of The Woodlands, says it hopes
to finish a second, larger biodiesel plant to produce
power for Entergy Corp. customers in parts of east
Texas and Louisiana.
"This is simply one way to deliver renewable
power to people," said Ken Crimmins, Biofuels Power's
chief operating officer. "People are afraid of something
new, but they're not afraid to turn on their light
switch. Flip the switch, there's your renewable power.
The electrons don't care how they're made."
Biofuels are seen as a way to reduce
harmful emissions and wean Americans and the rest
of the world off fossil fuels. President Bush has
proposed ramping up production of such alternative
fuels, like those used in some vehicles, but for now
they account for an extremely small percentage of
the world's fuel market.
At present, renewable energy sources
- biofuels, wind, solar, among them - supply only
about 6 percent of America's energy needs, according
to the federal government's Energy Information Administration.
That figure is expected to grow only to about 7 percent
in the next 20 years, meaning fossil fuels will still
carry the bulk of the load.
For now, Biofuels Power's contribution
to Texas' energy supply is a mere blip. Its new plant
in this small town 20 miles north of Houston has the
capacity to generate 5 megawatts of power. Crimmins
said that translates into roughly enough juice to
power 700 homes, though the number can vary widely
depending on the size of the home and the time of
day and year.
Appropriately, the operation itself
is small - and not one that likely could have arisen
Tommy Mann, who helps lead Accenture
Ltd.'s energy industry group, said one of the big
challenges for any biofuel outfit is finding a feedstock
supply that not only is abundant and cost effective
but also near enough to avoid expensive shipping costs.
That's certainly the case for Biofuels
Power and its partner in the project, privately held
Safe Renewables Corp., which produces the biodiesel
at a plant in nearby Conroe. Crimmins said Safe Renewables
is within 200 miles of four or five chicken rendering
operations. Richard DeGarmo, Safe Renewables' senior
vice president, said the cost of chicken fat varies
depending on the season, but it usually sells for
between 15 cents and 22 cents a pound.
What's more, Biofuels Power's entry
into the market comes at a time when Texas is in dire
need of more power supplies and as the state encourages
greater diversity of energy sources. And it's found
a city that couldn't be happier to have such an innovative
project in its midst.
"We're a very progressive city," said
Mayor Fred O'Connor. "We like progressive things."
The project hatched a few years ago
and includes about 140 investors, including a group
of commodity traders at the Chicago Board of Trade,
Crimmins said. They've raised about $10 million to
date, including an initial $3.5 million for the Oak
Ridge North plant. Much of the remainder will be used
to fund the second plant.
"It sounds like a lot of things have
fallen into place for them," Mann said.
Biofuels Power has only six people on
the payroll, though it occasionally hires contract
workers. One or two people can operate the relatively
simple plant - three engines inside a small metal
building with a control room.
In a nutshell, here's how the operation
works: Safe Renewables takes the chicken fat and,
using a chemical process, creates two products - methyl
esters (the chemical name for biodiesel) and glycerin
(a byproduct sometimes used in soaps and beauty products.)
The biodiesel is shipped by tanker truck the couple
of miles to the power plant. Because the plant is
easing itself up to full capacity, it's difficult
to say how much fuel it will use each day, but Crimmins
said the amount could be anywhere from 70 gallons
to 100 gallons an hour.
But the plant doesn't run around the
clock; the idea is to create power for times of the
day when demand is greatest - and prices are highest.
Like other power generators, Biofuels Power uses a
registered agent to sell the power on the open market.
The price of a kilowatt of electricity can sell for
as little 2 cents when demand is low to 65 cents or
more at peak times.
Crimmins said the company also benefits
from a $1-a-gallon federal tax credit for using biodiesel.
Pondering the company's future, Crimmins
said there are no plans at present to go public with
a stock offering. But that might change if the company
has a chance to build a much larger operation.
"It's a possibility," he said, "if we
ran across an opportunity to refuel all of Hawaii,
for instance, or do some major project where we couldn't
raise the money any other way."