USDA Rural Development Striving to improve the economy and quality of life in all of rural Minnesota Waste-to Energy Workshop May 24, 2011 Lisa Noty
Agency Background
Rural Development Food, Conservation, and Energy Act 2008 Energy Title Programs with Mandatory Funding
RD Energy Programs Biorefinery Assistance Program Advanced Biofuel Payment Program Rural Energy for America Program
Biorefinery Assistance Program (9003) Guaranteed loan program for the development and construction of commercial-scale biorefineries and for the retrofitting of existing facilities using eligible technology for the development of advanced biofuels.
Biorefinery Assistance Program (9003) Biorefinery A facility that converts renewable biomass into biofuels and biobased products and may produce electricity. Energy must be sold.
Biorefinery Assistance Program (9003) Advanced biofuel Fuel derived from renewable biomass, other than corn kernel starch including: (i) biofuel derived from cellulose, hemicellulose, or lignin (ii) biofuel derived from waste material (crop residue, veg waste material, animal waste, food waste, and yard waste)
Biorefinery Assistance Program (9003) Advanced biofuel cont (iii) Diesel-equivalent fuel derived from renewable biomass (iv) Biogas produced through the conversion of organic matter from renewable biomass (v) Butanol or other alcohols produced through conversion of organic matter from renewable biomass (vi) Other fuel derived from cellulosic biomass
Biorefinery Assistance Program (9003) Eligible technology (i) technology that is being adopted in a viable commercial-scale operation of a biorefinery that produces an advanced biofuel or (ii) technology that has been demonstrated to have technical and economic potential for commercial application in a biorefinery that produces an advanced biofuel
Biorefinery Assistance Program (9003) Guaranteed Loans 2011 Funding level $129 million Application deadline May 10
Advanced Biofuel Payment Program (9005) Purpose To support and ensure the expanding production of Advanced Biofuels by providing payments to Eligible Advanced Biofuel Producers
Advanced Biofuel Payment Program (9005) Advanced Biofuel Producer An individual, corporation, company, foundation, association, labor organization, firm, partnership, society, joint stock company, group of organizations or non-profit entity that produces and sells advanced biofuels
Advanced Biofuel Payment Program (9005) Payment Amounts fiscal year 2010 $80 million 80% Allocated in Base Payments $16 MM per quarter 20% Allocated to Incremental payments, $16 MM one-time payment made at the end of the fiscal year
Advanced Biofuel Payment Program (9005) Most recent Base Payment $.0000001765 per BTU
Rural Energy for America Program (REAP)
Rural Energy for America Program (REAP) 1. Energy audits and Renewable Energy Development Assistance 2.Feasibility Studies 3. Renewable Energy Systems and Energy Efficiency Improvements
Eligible Applicants Ag Producers receive at least 50% of GI from farming operations Small Business- private entity that meets SBA s small business definition by NAICS www.sba.gov/size/indextableofsize.html typically gross sales or employees
Feasibility Studies Purpose conduct Feasibility Studies for renewable energy systems. Typically include: Economic Feasibility, Market Feasibility, Technical Feasibility, Financial Feasibility, Management Feasibility, and Qualifications
Feasibility Studies Applicant eligibility 1) small businesses located in non-metropolitan area or ag producer, 2) be the owner of RES,
Feasibility Studies Details 1) $3 million available in 2010 2) MN received 3 applications submitted 1 3) maximum grant $50,000 or 25% 4) 2 years to complete Examples - large wind turbines, biomass system to heat turkey barns, biomass in ethanol plant, geothermal system in greenhouse
Renewable Energy or Energy Efficiency Improvement Systems Purpose - Provide financial assistance to agriculture producers and rural small businesses to purchase and install renewable energy systems and make energy efficiency improvements
Renewable Energy or Energy Efficiency Improvement Systems Types of Assistance Grant Guaranteed Loans Loan/Grant Combinations
Eligible Applicants cont. Rural Area Small business projects must be located in nonmetropolitan area - population <50,000 and rural in nature Ag Producers can be located anywhere in the state
Renewable Energy Systems 1. Bioenergy- systems that produce energy from a biomass source (corn/pellet burners, ethanol, biodiesel) 2. Anaerobic Digesters
Renewable Energy Systems 3. Geothermal direct use 4. Geothermal electric generation
Renewable Energy Systems 5. Hydrogen renewable energy system that produces hydrogen or a renewable energy system that uses hydrogen as an energy transport medium
Renewable Energy Systems 6. Solar (Small) < 10 kw 7. Solar (Large) > 10 kw
Renewable Energy Systems 8. Wind (Small) < 100 kw 9. Wind (Large) > 100 kw
Energy Efficiency Any type of improvement that decreases energy consumption. Energy savings is documented through an energy audit/assessment
Program Limitations Residential Use Vehicle Use Used equipment
Details Maximum grant assistance 25% of project costs renewable energy $500,000 energy efficiency $250,000 Maximum guarantee 75% of project costs up to $25 million* Minimum grant renewable energy $2500 (system $10,000) energy efficiency $1500 (system $6000) *maximum REAP benefit is 75% of TPC
Details Mandatory Set Aside - Grant requests of $20,000 or less - $21 million Funding Level (2011): Farm Bill $70 MM Appropriations $5 MM
Types of Grant Applications Simplified Application Full Application
Simplified Application TPC < $200,000 technology is commercially available complete project in 24 months grant reimbursement after project is completed
Full Grant Application TPC >$200,000 Technology proven but may not be commercially available
Scoring Guidelines 1. Quantity of Energy Replaced, Produced, or Saved A. Energy Replacement (self use) >0 but < 25% 5 pts >25% < 50% 10 pts >50% 15 pts
B. Energy Savings (EE) 20% < 30% 5 pts 30% < 35% 10 pts >35% 15 pts ** Additional 5 points if TPC < $50,000 and obtained a professional energy audit C. Energy Generation production of energy for sale 10 pts
2. Environmental Benefits proposed system contributes to the environmental goals and objectives of other Federal, State, or local programs 10 pts. 3. Commercial Availability Currently comm available & replicable 5 pts. AND provided w/5 yr warranty 10 pts
4. Technical Merit Project Team Agreements & Permits Energy or Resource Assessment Design & Engineering Project Development Schedule Project Economic Assessment Equipment Procurement
4. Technical Merit (cont) Equipment Installation Operations & Maintenance Dismantling & disposal of project Total points possible under Technical Merit section = 35 points
5. Readiness (matching funds) 50% < 75% 5 pts 75% < 100% 10 pts 100% 15 pts
6. Small Ag Producer/Very Small Rural Business Ag Producer < $600,000 gross sales 5 pts <$200,000 gross sales OR Very Small Rural Business (<15 empl AND < $1M in annl receipts) 10 pts
7. Simplified Application (TPC < $200,000 & commercially available technology & complete w/i 24 months & grant reimbursement) 5 pts
8. Previous Grantees and Borrowers No loans or grants under this program within last 2 years 5 pts
9. Simple Payback Renewable energy Systems < 10 yrs 15 pts 10 yrs but < 15 yrs 10 pts 15 yrs up to and including 20 yrs 5 pts Energy Efficiency <4 yrs 15 pts 4 yrs but < 8 yrs 10 pts 8 yrs up to and including 12 yrs 5 pts
10. Loan Rate (Guaranteed only) < prime plus 1.5% 5 pts Prime + 1% 10 pts
Minnesota Projects
Biomass
Small Wind
Large Wind
Geothermal
Dennis Klarenbeek 1219 61 st Luverne
Small Solar
Energy Efficiency
2010 Applications (received) 438 Applications Small Solar (8) Large Solar (2) Biomass (4) Anaerobic Dig (2) Geothermal (25) Small Wind (13) Large Wind (39) Energy Efficiency (342)
Challenges Part of planning process (capital replacement) Competitive environment Shortage of energy auditors Assistance with grant preparation
2011 Changes Increase diversity of projects Flex Fuel Systems/Blender pumps
Other incentives DSIREUSA.ORG
Additional Information Lisa Noty 507.373.7960x120 Lisa.Noty@mn.usda.gov http://www.rurdev.usda.gov/mn