Priam, Minn. — A Minnesota cooperative has a new “power point.”
Minnesota Valley Alfalfa Producers started plans to generate electricity from alfalfa stems 14 years ago. But after investing six years of effort and millions of dollars, the farmer-owned cooperative was forced to pull the plug on the project when its partners dropped out.
Despite its rocky start, MnVAP went on to became one of the nation’s largest alfalfa pellet mills, says Montevideo farmer Keith Poier, MnVAP chair. And now — as Minnesota pursues ambitious renewable-energy goals — MnVAP has returned to its founding vision of biomass power. The cooperative wants to supply biomass fuel pellets to Minnesota’s growing renewable-energy sector.
“MnVAP members initially signed on with the intent of being a renewable energy company,” says Kim Larson, a Willmar farmer and consultant who helped organize the co-op in 1994, “and they are once again looking at renewable energy opportunities.”
Late last year, the cooperative received a $1 million renewable-energy grant from the Xcel Energy Renewable Development Fund. MnVAP will use the grant money to test a new technology for grinding and drying high moisture agricultural fibers, such as wood, native grasses and crop residues.
“Innovative and new renewable technologies, such as solar and biomass, have trouble competing with conventional energy in the marketplace,” said Scott Wilensky, Xcel Energy acting vice president of regulatory and government affairs, in a written statement. “The fund’s objective is to remove barriers to entry of new renewable-energy technologies.”
MnVAP will work with AURI and Canadian equipment manufacturer First American Scientific Corporation to test a biomass pulverizing method known as a kinetic disintegration system or KDS. KDS was originally developed for the mining industry, Poier says. Now it’s being used by other industries that need to grind and dry materials before condensing them into pellets.
KDS combines grinding and drying into one operation, eliminating several processing steps and lowering fuel use, Poier says. With this new technology, MnVAP hopes to cut its manufacturing costs in half, he says. That “would allow them to be competitive in a biomass industry,” says Al Doering, scientist at AURI’s coproduct lab in Waseca.
AURI, which helped the co-op get started in the early 1990s, will assist MnVAP in evaluating this new technology. “We’ll help them compare it to their current process,” Doering says. “Some of the things we’ll be looking at are pellet quality, moisture, output and energy savings.”
A good fit for MnVAP
Providing feedstocks for renewable power would be an ideal fit for the farmer cooperative, Doering says. “They’ve been in business a long time, and they have years of experience in collecting and processing long stem biomass.”
Today, MnVAP manufactures 40,000 tons of alfalfa pellets annually and ships its products to feed mills all over the United States, Poier says. Alfalfa is a high-protein staple of livestock diets.
Like the feed industry, the developing biomass-power industry will need cost effective ways to handle voluminous, perishable plant materials, Poier says. “These materials are very expensive to transport and touchy to store. We’re already in the business of processing a bulky raw material so it can be densified and shipped across the country to an end user.”
MnVAP has another big advantage, too, says Larson, the Willmar consultant who is coordinating the co-op’s biomass project. “They are a farmer-owned co-op with 141 shareholders.” MnVAP growers currently supply the co-op with 10,000 acres of alfalfa. In the future, these farmers could also provide the dedicated energy crops that will be needed, Larson says. “Not only can they process biomass, but they have the nucleus of growers to supply it, too. That’s their biggest
asset.”
MnVAP members “farm up and down the Minnesota River Valley and the Red River Valley,” Poier adds. These environmentally sensitive areas could benefit from perennial energy crops, “plants like alfalfa that are good for the land and water,” he says. “That’s an important part of this — to improve the environment.”
Markets emerging
Last February, Minnesota passed landmark legislation that requires state utilities to generate a quarter of their power from renewable sources by 2025. The goal, called “25 by 25,” is one of the most ambitious in the nation, Doering says, and it’s encouraging the development of biomass markets.
For example, municipal utilities in Willmar and New Ulm are looking into co-firing biomass and coal. Ethanol plants are also interested in gasifying or combusting biomass to produce “greener” transportation fuel. Already, three Minnesota ethanol plants are generating biomass power to run their operations. In the future, more companies “will need densified material,” Doering says, creating opportunities for suppliers such as MnVAP to fill the need.
In 1994, when MnVAP formed, “We were way ahead of our time in so many ways,” says Poier, who has served on the co-op’s board since 1999 and been a member since its start. After the first biomass-power initiative collapsed, shareholders could have thrown in the towel, “but we held together.”
The company has struggled to be profitable in a thin-margin business, Poier says, but now, “we’ve gotten to the point where we’re ready to stretch ourselves.” He adds, “I really think this is an opportunity that will pay benefits,” not only for MnVAP, but also “for our communities, our farmers, our state and the nation.”
