Spanish energy company Abengoa, caught in a financial crisis, has shut down its cellulosic ethanol plant in Hugoton, Kansas, after little more than a year of operation, reports Kansas Agland. The 25 million-gallon-a-year plant was billed as the first commercial-scale, next-generation biofuel plant when it opened amid hoopla on Oct. 7, 2014. “We’re all kinda reeling a little bit right now,” Neal Gillespie, Stevens County Economic Development director, told Kansas Agland. Abengoa said it would use plant residue, purchased from farmers in the Hugoton area, to produce biofuel.
Cellulosic ethanol was expected to become a widely produced, second-generation biofuel and displace corn ethanol by 2022 as the largest U.S. biofuel. The industry is years behind schedule and produces only a comparative trickle of fuel. Development has been delayed by high production costs and difficulty in securing financing. By relying on grass, woody plants and crop debris as feedstock, cellulosic ethanol would end the argument that it was unwise to convert food crops, such as corn, into fuel, said advocates.
But only a handful of cellulosic ethanol plants are in operation. POET, the largest U.S. ethanol maker, “will ship its first cellulosic biofuel this month” from a joint venture with DSM in Emmetsburg, Iowa, said AgriNews. “A DuPont cellulosic ethanol plant opened in Nevada, Iowa, on Oct. 30.” Quad County Corn Processors in Galva, Iowa, was first into production of cellulosic ethanol in 2014 and produced one million gallons by last April, but it earned less money than expected from the advanced biofuel, E&E Publishing reported in May.
The POET-DSM plant has a capacity of 25 million gallons a year and the DuPont plant is rated at 30 million gallons. The Quad County plant utilizes fiber from corn kernels to make up to two million gallons a year of cellulosic ethanol.
“Several calls to Abengoa’s corporate office in Missouri were not returned, and the Hugoton facility’s phone number has been disconnected,” said Kansas Agland. The Stevens County economic director estimated 50 employees lost jobs in the shutdown.
The Hugoton plant, 90 miles southwest of Dodge City in western Kansas, was built with a $132.4 million loan guarantee and a $97 million grant from the Energy Department. The Energy Department website said Abengoa paid back the loan guarantee in March.
Citing reports in Spanish media, watchdog.org said, “Abengoa is suspending its cellulosic biofuels plant in Hugoton, Kansas, as well as six other bioenergy plants in the U.S., including a facility in Colwich, Kansas, that produces corn-based ethanol. The company is also reportedly on the verge of shutting down the headquarters of Abengoa Bioenergy in St. Louis.”
Abengoa filed for creditor protection last month when refinancing talks fell apart, making sale of its assets more likely, said greentech media.