Miscanthus - a plant that can produce a lot more than heat

Monday, February 28, 2011

The Tiessen family of Leamington is investing millions to turn this tall perennial grass into fuel, animal bedding, fibre and everything from bedpans to a planting medium for greenhouses
 

by MIKE MULHERN

They started growing miscanthus in 2007 to have something sustainable and cost-effective to heat the 37 acres of greenhouses their family owns here. The more they looked at it, the more they realized they were dealing with a plant that could be used for a lot more than heat.

Dean and Jason Tiessen are the owners of New Energy Farms, a company on a mission to breed and market miscanthus varieties suitable for fuel, animal bedding, fibre and other applications – everything from a single-use bedpan, to trays for plant and medical products, to a planting medium to replace coconut fibre in hydroponic greenhouse operations. 

The Tiessens began their search for a new fuel source by looking at various crops, including willow and poplar. "We looked at perennial grasses, switchgrass and miscanthus. Miscanthus came out on top," Dean says. They started their search because they weren't satisfied with wood, a fuel they still use, because the price wasn't stable and neither was the quality.

"With waste wood," Dean says, "you get 30 per cent moisture one day, the next day it's 60 per cent moisture, the next day it's full of garbage and mess and so on, so we have to set up our boilers for the worst-case scenario." But the real issue is price and that keeps going up.

"I can't go another generation worrying about energy costs because Mexico, Central America, Spain, all these other competitors are coming into the greenhouse markets," says Dean.

Looking at the books for their Leamington family greenhouse business, Pyramid Farms, Dean found that in 1974 they were getting 68 cents a pound for tomatoes and they paid nine cents a gallon for bunker oil. "In 2011, bunker oil is $2.70 a gallon and we're getting 40 cents a pound for our tomatoes." Technology and genetic advances allow them to harvest three times more tomatoes per acre now, but fuel is still eating away at the margins.

"Fuel has been a moving target," Dean says, so they set out to find a way to fix costs over a 15- or 20-year period.

So far, the Tiessens have set up breeder programs in Canada, Germany and Spain. They have fields of miscanthus planted in Canada, the United States and Europe, and they are planning a cubing mill that will create fibre, bedding and fuel streams for miscanthus, and fuel streams for wood and crop residues.

They've already invested $2.8 million in New Energy Farms and Dean and Jason, along with first cousins Ryan and Michael Tiessen, are investing $3.2 million in the cubing plant in Leamington, which they hope will be built and running by June. The cubing plant, with the capacity to produce 70,000 tonnes of biomass cubes per year, will be part of a separate company as yet unnamed.

Dean Tiessen believes that New Energy Farms is in the middle of two value chains waiting for the opportunity to link up.

On one side, farmers are eager for a new cropping opportunity, especially one like this with few inputs and a long horizon of 20 years or more. On the other, corporations are looking to fill their fuel and fibre needs using a material that is sustainable, reliable and not subject to wild price swings. 

"Sixty per cent of our inquiries come from end-users looking for solutions, 40 per cent come from farmers asking, 'What can we do and how can we sell it?'" Dean says, noting that there is an almost 50/50 split of people wanting to produce and people wanting to use. It's just that the users are not ready to place orders and the producers can't do anything until the market is ready.

On the policy side, Dean says, Ontario Power Generation's announcement two years ago that it was looking at biomass as a potential fuel to fire generation plants seemed positive but, apart from continuing study, nothing so far has come of it.

"The Ontario Power Generating opportunity was one of the strongest and most exciting opportunities for farmers and other proponents in the province," Dean says. "A year ago, primary producers were excited about the opportunity. Now they say: 'I don't think it's real, I don't think it's going to happen. We have to look at other avenues.' "

New Energy Farms has eight Ontario producers growing planting material. Between them, they could produce enough root material to plant 18,000 acres in 2012. New Energy Farms has enough root material to plant an additional 62,000 acres in 2012, if there is an opportunity on the sales side.

The Tiessens also have 280 acres in Tifton, Ga., and there may be more reason for optimism there. The U.S. Department of Agriculture has something called the Biomass Crop Assistance Program (BCAP) designed to provide "financial assistance to owners and operators of agricultural and non-industrial private forest land who wish to establish, produce and deliver biomass feed stocks." An unintended consequence of the 2009 law was intense market competition for wood shavings, wood chips, sawdust and other wood scraps between traditional purchasers – landscapers and particleboard manufacturers – and facilities that convert biomass to energy. So program enrolment was suspended and now farmers are waiting for new money intended only for sustainable biomass crops.

"U.S. sales inquiries for 2011 are 10 to 20 times what they were in 2010," Dean says, "but (before buying) they are waiting on the BCAP policy outcome."  He doesn't know whether the money will come in time for the 2011 U.S. planting season.

Pyramid Farms was started by Dean and Jason's parents in 1965. While they grow tomatoes now, they have grown other crops over the years, including cucumbers and peppers. BF