At current prices of about $40-50 per ton for agricultural feedstock, a 30MW power plant uses about $20,000 worth of fuel each day, or more than $7.3 million a year. According to Kukkonen, biomass power plant operators typically look for 20-year fuel supply agreements with extension options.
Chief Executive Carl Kukkonen commented: “We have generated strong interest in Asia for Giant King Grass as a dedicated renewable energy crop for energy producers, including power companies that burn 100% biomass instead of coal or natural gas to generate electricity.
Biomass power plants currently use agricultural waste and municipal solid waste for fuel. However, supplies of agricultural waste-including corn straw, wheat straw, rice straw and residuals from growing cotton-are seasonal, since harvests of those crops occur at different times, and the fuel quality of the waste varies with each crop. To reduce these operating and business risks associated with agricultural waste, operators of biomass power plants are seeking a dedicated energy crop, such as Giant King Grass, for at least 50% of their fuel needs.
The Chinese government is strongly encouraging growth of biomass power plants by offering substantial subsidies for using green energy sources and guaranteeing that all electricity generated from green sources will be purchased by the national power grid.
Kukkonen added: “We are excited about these recent business developments and the growing trend worldwide toward renewable energy. The potential for Giant King Grass as biomass for power plants is substantial in Asia as well as other regions of the world. Furthermore, Giant King Grass can also be used to make liquid biofuels, such as cellulosic ethanol, and green gasoline, which are collectively known as grassoline.”
