Imagine having a market for as many as 21 different feedstocks. More than 600 members of the Show Me Energy Cooperative do. Farmers receive $45 to $60/ton for a variety of grasses and forbs that are made into biomass pellets and then co-fired with coal at an electric generation plant. The largest test burn in the United States with 22,000 tons of biomass pellets was completed in 2009 at the 385 MW KCP&L plant at Sibley, MO.
Farmers receive a price based upon each feedstock’s net energy value and moisture. Switchgrass, bluestem, fescue and miscanthus are the main feedstocks grown for Show Me Energy’s pellet production plant in Centerview, MO. But many other grasses, forbs and even storm-damaged wood are produced into pellets.
Show Me Energy was established in 2007 as a New Generation Cooperative (NGC). Producers have created NGCs to increase their share of the consumer dollar and to add value to their basic commodities through processing. Members of Show Me Energy’s 612-member cooperative sign year-to-year marketing agreements to produce a certain amount of biomass. These members come from 32 counties in west-central Missouri and eight counties in east-central Kansas.
During the equity drive, producers who purchased shares in the cooperative received tax credits from the state of Missouri. In August 2009, Show Me Energy also was the first biomass producer to qualify for the USDA’s Biomass Crop Assistance Program (BCAP), which provides financial assistance to producers who deliver eligible biomass to designated biomass conversion facilities to produce heat, power, bio-based products or biofuels.
BCAP-qualified producers are eligible to receive up to 75% of the cost of establishing and planting biomass crops within a BCAP project area. The USDA provides annual payments to compensate for lost opportunity costs until these crops are established and provides financial assistance for the collection, harvest, storage and transportation of biomass crops by matching the amounts paid to producers by the biomass conversion facility, up to $45/dry ton.
While BCAP has had some growing pains, it has taken a commonsense approach of involving farmers from its inception, says Steve Flick, president of Show Me Energy’s board of directors. “Farmers are the foundation to drive [the new biomass energy] technology — not technology driving farmers.
“BCAP is going to be changing the [agricultural] landscape,” Flick says, suggesting that more farmers will put land, including marginal land, into dedicated energy crops. To qualify for BCAP, farmers must have a conservation plan approved by the NRCS. Show Me Energy’s members leave about 30% of corn stover residue on their fields and harvest native grasses in late fall after a killing frost, leaving unharvested strips near waterways.
A national model
Congressman Ike Skelton (D-MO) says that Show Me Energy “has established itself as a national model in the area of renewable energy development, a model that should be encouraged by the federal government and eventually replicated throughout the American countryside.”
This business model allows for profits to be redistributed to members so they can reinvest in their local communities in the form of equipment and so on. “The money is not going to Wall Street mutual funds,” Flick says.
Will more cooperatives begin providing biomass feedstocks to power plants and cellulosic ethanol facilities? Flick thinks more entrepreneurial co-ops will get involved but says they need leaders who are passionate about renewable energy and are willing to work hard. He adds that cellulosic ethanol technology is still in its infancy. “That’s why we started with power generation,” he says.
Show Me Energy Cooperative received a USDA Rural Business Enterprise Grant (RBEG) to evaluate a state-of-the-art modular syngas technology that will serve as a model for building a future 20-MW power/liquid fuels plant on site.