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Renewable energy revs up the rural economy

Minnesota farmers will be harvesting more green power, thanks to AURI’s Center for Producer-Owned Energy.

In its first two years, CPOE helped develop ethanol, biodiesel, biomass gasification, manure digestion, community wind power and renewable energy coproducts, says Max Norris, CPOE director.

With a $1 million USDA grant, plus private sector matching grants, CPOE has backed two dozen ideas for turning farm products into renewable energy. Several projects have resulted in businesses expected to attract an estimated $200 million in capital investment. And CPOE initiatives have benefited more than 8,800 Minnesota ag producers, says Lisa Gjersvik, AURI resource development manager. “Creating wealth in rural Minnesota is what it’s all about,” Norris says.

CPOE offers business development expertise and applied research services to commercialize innovative ideas. Minnesota has “a very active renewable energy research program at the University of Minnesota,” says Wayne Hansen, AURI project director. “One of our roles is to take that basic research and put it to use.”

CPOE has worked with producer-owned companies at every business-development stage — from first concept to feasibility to financing. It’s a unique mission, carried out in partnership with Minnesota commodity groups and ag processors who contributed cash and in-kind the first two years.

Not only do these partners contribute money, “they also help develop concepts and opportunities for renewable energy,” says Denny Timmerman, AURI project director. “Our commodity groups depend on us to look at new ideas,” Norris adds.


Over the last two years, the center has helped Minnesota farmers evaluate the profitability of gasifying grass seed chaff, sugar beet pulp and corn stover. It has worked with soybean growers to test biodiesel performance in all-terrain vehicles and Mississippi River towboats. And it has helped both large and small dairy farmers explore methane production.

In the liquid biofuels sector, CPOE helped launch a new corn ethanol plant in Fergus Falls, Minn., which broke ground in October 2006. And it’s working with organizers of proposed ethanol plants near Erskine and Luverne. The center also worked with CornPlus Ethanol in Winnebago to boost ethanol yields by adding cheap excess sugar to the fermentation phase (see “Sweeter still,” page 8).

In the coming year, CPOE will test crude glycerin and vegetable oils in industrial turbines and boilers. “There’s huge interest in this research,” which could open vast new markets for biodiesel coproducts, says Rose Patzer, AURI associate scientist. The center will also investigate fractionating soybean meal, another biodiesel coproduct, to improve its nutritional qualities for poultry.

Lowering risk

These innovations could one day help farmers diversify their products and strengthen the rural economy, says Mike Sparby, AURI project director. But new ideas are often risky, and CPOE’s work “helps mitigate the risk of new technology,” he says.

Pilot tests — such as a biodiesel-wind cogeneration demonstration scheduled for next summer — let investors see new technology in action. “These are local projects, within driving distance,” Hansen says. “You don’t have to go to Europe or India to see them.”

The center’s feasibility research also saves producers time and money. For example, a new community wind-power handbook outlines all the steps needed to develop a profitable wind turbine. Even studies that turn thumbs down on a proposed venture, such as transporting methane made on dairy farms, are valuable learning tools, Hansen says. “You can show people the numbers and prevent them from putting money into something that’s not going to work — at least not now.”

Energy leader

Two years after its founding, the Center for Producer-Owned Energy is the go-to place for rural Minnesota entrepreneurs who want to start renewable-energy businesses, says Butch Koehmstedt, a USDA rural development officer in Thief River Falls. “The staff has a lot of expertise and knowledge, which they can pass on to businesses looking for alternative energy resources.”

Minnesota is already a renewable energy leader, Norris says. The state boasts robust ethanol and biodiesel manufacturing, expanding E85 distribution, rapidly growing wind-power capacity and strong interest in biomass power.

Norris says that the Center for Producer-Owned Energy “is part of the reason there is so much interest in Minnesota in renewable fuels. The USDA funds let us look at a broad array of ways to create renewable energy.” Although the USDA grant ended in December, the center’s renewable energy mission will continue, Norris says, supported by AURI, Minnesota commodity groups and other state partners.