By KEVIN WALKER
Michigan Correspondent

KNOXVILLE, Tenn. — The U.S. Department of Energy (DOE) has announced that Mascoma Corp. and the University of Tennessee have received a $26 million grant to help build a demonstration cellulosic ethanol plant.

The facility will be built at the Niles Ferry Industrial Park in Monroe County as part of UT’s Tennessee Biofuels Initiative. An additional $40.7 million was appropriated last year by the state of Tennessee for construction of the plant. Some of those funds will also be used for more research and development of bioenergy crops, such as improving cellulosic ethanol processes.

“This newest award is a dramatic example of how the vision and investment made by Governor (Phil) Bredesen and our state leaders has helped to leverage major federal funding that will have dramatic impact on rural development in Tennessee,” said David Millhorn, executive vice president for UT.

The Tennessee Biofuels Initiative is a business model spearheaded by UT and supported by the governor and state legislature. The ultimate goal is to create a new and thriving ethanol industry in the state with multiple plants using locally grown biomass, primarily switchgrass. The initiative is also meant to reduce the country’s dependence on foreign oil and to help Tennessee’s farmers and surrounding communities.

“Mascoma is poised to be the first ‘grassoline’ producer in the U.S. to successfully commercialize ethanol made from switchgrass and other plants,” said Priscilla Li, a spokeswoman for the Cambridge, Mass.-based alternative energy company.

The Tennessee demonstration plant is the third cellulosic ethanol biorefinery Mascoma has announced it will build. This project represents one of the largest commitments of capital yet made in support of the cellulosic biofuel industry.

The first project was in upstate New York, with another slated for Michigan. Li said Mascoma chose Tennessee and the other locations because of the economic climate, feedstock abundance and access to scientific talent at area universities and research facilities.

Governments at different levels are endorsing and helping fund these projects, and demand is being created through government regulations and mandates. She also said the business sector is demanding low-carbon oil substitutes.

Mascoma is interested in accelerated research and development, along with commerce, which means scientific trials in tandem with ramping up production. It is also pursuing a “multi-feedstock strategy,” which means different feedstocks in different places: For example, woody biomass in Michigan and switchgrass in Tennessee.

Initial research conducted by UT’s Institute of Agriculture indicates that Tennessee is capable of generating more than 1 billion gallons of cellulosic ethanol from switchgrass alone.

The new ethanol plant will be complemented by research efforts at Oak Ridge National Laboratory (ORNL). In June 2007, ORNL was awarded $135 million from the DOE to fund the Bioenergy Science Center, a Tennessee research collaborative that will address the technical challenges to commercial production of cellulosic ethanol.
The new funding brings the total investment in the region to some $230 million toward bioenergy sciences.

The two other DOE bioenergy research centers are the Great Lakes Bioenergy Research Center, led by the University of Wisconsin in Madison in close collaboration with Michigan State University in East Lansing, and the Joint BioEnergy Institute, led by the Lawrence Berkeley National Laboratory in Berkeley, Calif.

Earlier this year UT also announced a farmer incentive program for production of switchgrass as a feedstock for the new plant. The university has contracted with 16 farmers within 50 miles of the site to produce 720 acres of switchgrass this year. The number of participants is expected to increase along with the needs of the biorefinery, and approximately 6,000 acres of switchgrass should be in production by 2010.