Sugarcane Takes Root In California’s Clean Energy Transformation

    California Ethanol + Power Is Building The First Large-Scale Sugarcane-To-Ethanol Plant In The United States

    Sugarcane Stalks In California’s Imperial Valley

    Scorching California deserts may not garner images of lush sugarcane sprouting higher than the tallest human beings. However, the Imperial Valley’s rich soil, deep alluvial clay, and access to irrigation water from the Colorado River basin has made the region a sugarcane production hotbed for decades. The valley is located east of San Diego, south of the Salton Sea, west of the Colorado River, and just North of the United States/Mexico border. It is here where California Ethanol + Power (CE+P) is planning one of the largest locally grown sugarcane campuses in the world — Sugar Valley Energy (SVE).

    Location Of Sugar Valley Energy

    “SVE will be a 160-acre multi-plant campus processing locally grown sugarcane into high-value and in-demand low-carbon energy products: sugarcane-to-ethanol, sugarcane-to-low-carbon electricity, and biomethane, along with wastewater treatment capabilities,” said David Rubenstein, president and CEO of CE+P. “Once production reaches full capacity, SVE is designed to produce 68 million gallons of ultra-low carbon, fuel-grade sugarcane ethanol each year. This Essential Ethanol will be mixed with gasoline for cleaner burning fuel. After the sugarcane juice is extracted to make the ethanol, the remaining biomass will be combusted to produce up to 49 MW of green electricity. A portion of this electricity will power the SVE plant. The remaining balance will be available for export to the California power grid. In addition, SVE will produce approximately 740 million cubic ft. of pipeline-quality biomethane gas annually. Finally, SVE has the opportunity to utilize its sugarcane crop residue to produce next-generation green energy products via gasification/pyrolysis methods now commercializing.”

    Sugarcane Farming In California’s Imperial Valley

    Substantially increasing the sugarcane production in the Imperial Valley has been a topic of conversation for well over 20 years. In addition to being a source of low-cost sugar, sugarcane can be fermented and distilled to produce ethanol. Ethanol is a renewable gasoline fuel source that can be used as a drop-in replacement to traditional fossil fuels to reduce greenhouse gas (GHG) emissions.

    According to the California Energy Commission, ethanol can reduce carbon dioxide (CO2) emissions by 61% to 83%, depending on the feedstock used. “All biofuels are important to consider and ultimately play a role in terms of our long-term sustainable energy landscape,” said Rubenstein. “Sugarcane offers a number of benefits that help make SVE a viable solution in this region of California right now. SVE’s Essential Ethanol will be the lowest carbon intensity sugarcane ethanol available in the United States at commercial volumes. The sugarcane crop has a high carbon-sequestration rate compared to other crops being grown in the Imperial Valley. Sugarcane is an attractive year-round crop for farmers in one of the world’s most productive agricultural regions with abundant sunshine and on-demand irrigation supported by senior water rights to draw off the Colorado River. These conditions make sugarcane a reliable, sustainable, and profitable crop to the region. We strongly believe this project is right for the community and right for the state.”

    The Imperial Valley’s dry climate, sunlight, and irrigation infrastructure allows sugarcane to be planted and harvested year-round, which produces a higher crop yield. Comparatively, sugarcane can’t be grown year-round in Texas, Louisiana, or Florida because rain limits the harvesting season to just six months.

    Sugarcane Plants In California’s Imperial Valley

    Sugarcane is considered a preferred treatment as an Advanced Biofuel under the Renewable Fuels Standard (RFS). CE+P issued a technical analysis of its prospective sugarcane-derived ethanol using the California-modified version of Argonne National Laboratory’s latest GHGs, regulated emissions, and energy use in transportation (GREET) model. The study concluded that CE+P’s fuel pathway, including electricity as a co-product, would emit more than 80% fewer GHG on a full fuel cycle basis than gasoline when consumed in California. “Imperial Valley has near-ideal climate conditions with an abundance of sunshine and on-demand irrigation to grow sugarcane,” said Rubenstein. “The project will bring agricultural opportunities requiring approximately 48,000 acres to sustain full commercial operations bringing an attractive and reliable new crop to the region. SVE is an important first project for CE+P, responsible for supporting an estimated 15,100 jobs, US$1.7 billion in economic activity, a new tax base for the community, and new sustainable energy sources for the region.”

    Project Status

    The SVE project is approaching the completion of its predevelopment phase and moving into detailed engineering and financing. In January 2021, CE+P began securing formal commitments with local farming communities to grow the first 20,000 acres of sugarcane feedstock. “Our team has begun discussions with local growers about production opportunities,” said Rubenstein. “Sugarcane is highly suited for the hot, dry Imperial Valley climate and has water demand similar to alfalfa, one of the region’s existing dominant crops. Our long-term agreements will offer local growers the opportunity to grow reliable and sustainable crops and benefit from a stable revenue stream. We are grateful for the opportunity to share the project’s benefits with our growing partners to share the economic and environmental benefits with the broader community.”

    Quick Statistics

    68 Million Gallons Annual SVE production of low-carbon fuel-grade Essential Ethanol
    1.6 billion gallons 2019 California ethanol fuel consumption
    4.3% SVE ethanol production relative to California’s ethanol fuel consumption
    40 MW Electricity, of which 25 MW will be available for export to the grid
    737 million cubic ft. Pipeline quality biomethane
    28,000 tons Inorganic soil amendment
    200,000 tons Saleable CO2 gas
    200,000 tons Field residue
    2300 tons Fly ash
    US$1.7 billion Total economic impact
    US$1.29 billion Direct investment (construction costs and businesses revenues)
    US$928 million Imperial County economic activity
    15,122 Full and part-time jobs from the construction and first-year operations
    150 Jobs needed to operate the new SVE campus
    ~100 Long-term agreements with farmers


    California’s Energy Independence

    CE+P’s mission is to produce sustainable renewable low-carbon energy in California from the right renewable resources. Sugarcane fits this criterion well. Aside from the benefits discussed, CE+P believes that increasing domestic sugarcane production could increase California’s energy independence as well. In 2019, California consumed around 15.41 billion gallons of gasoline and 1.6 billion gallons of ethanol. About 218 million gallons or 13.6% of California’s ethanol consumption comes from domestic production. Therefore, the SVE project has the potential to increase California’s ethanol production by over 30%. “SVE will be a leading contributor toward moving California in the direction of bolstering our energy independence, lowering the carbon intensity of our fuels, and lowering the footprint of its manufacturing and transport,” said Rubenstein. “SVE’s super-low carbon Essential Ethanol will have a carbon intensity less than half of the average Brazilian sugarcane ethanol pathway. The company will contribute positively to California’s goals of reducing GHG emissions and meeting the Low-Carbon Fuel Standard, Renewable Portfolio Standard, and Cap and Trade Regulations.”

    Biomass Power Generation Island

    With all the buzz surrounding the ethanol plant, it can be easy to lose track of the other developments taking root at the SVE campus. Most notable is the 49-MW biomass power generation island, which will be the first facility of its kind to be built in the United States. With that honor comes a great deal of challenges, but Rubenstein believes that the power island is a critical piece of the SVE project’s green infrastructure. “Approximately 5% of the nation’s electricity is generated from biomass power plants. SVE’s power island will use the bagasse from the sugarcane to generate 49 MW of green electricity, which will power SVE’s facility and send power to the California grid,” said Rubenstein. “CE+P’s sugarcane-to-ethanol technology has been successful around the world for many decades. SVE it is the first large-scale sugarcane-to-ethanol plant in the United States. We’re deploying processes and equipment that are both commercially proven and financeable, but CE+P must also meet California’s stringent environmental regulations. Bringing the right technology and off-take partners on board is key. Sugarcane is an important feedstock whose time has come, and fortunately, both California and federal governments have developed incentive structures to encourage projects such as SVE.”

    California’s Ambitious Transportation Emissions Reductions

    The SVE project coincides with California’s ambitious climate reduction goals. In late September 2020, California Governor Gavin Newsom signed an executive order banning the sale of gas-powered cars by 2035. The governor’s order marks the latest push toward halting climate change in America’s most populated state. According to Newsom, transportation in California is responsible for over 50% of the state’s carbon pollution, making it an obvious target for lower emissions. California, which is home to over 12% of Americans, has more electric vehicles (EVs) than any other state. However, gas-powered cars account for more than 75% of California’s car sales, according to the US Energy Department.

    Fuel Source Consumption (Trillion Btu) Percentage Of Total
    Natural Gas 2207 31.1%
    Motor Gasoline (Excluding Ethanol) 1716 24.2%
    Jet Fuel 685 9.7%
    Other Renewables 618 8.7%
    Distillate Fuel Oil 576 8.1%
    Other Petroleum 332 4.7%
    Biomass 267 3.8%
    Hydroelectric Power 240 3.4%
    Nuclear Electric Power 190 2.7%
    Residual Fuel 169 2.4%
    Hydrocarbon Gas Liquid 58 0.8%
    Coal 33 0.5%
    Total 7091  

    California 2018 Energy Consumption (Estimates)

    Data Source: US Energy Information Administration, State Energy Data System


    In addition to lower emission fossil fuel sources like compressed natural gas (CNG) and liquefied natural gas (LNG) — biofuels, electricity, and hydrogen are the most likely alternative fuels that could replace gasoline, jet fuel, and distillates in the coming years. With a capacity of 68 million gallons or 4.3% of California’s ethanol demands, SVE has the capability to make California more ethanol independent.

    California’s current transportation fuel blend is 10% ethanol. CE+P estimates that demand for its low-carbon ethanol could increase based on California’s continuing emissions reduction requirements. The company estimates that there are over one million flex fuel vehicles currently registered in California. These vehicles are capable of operating on gasoline ethanol blends containing 10% to 85% ethanol. “Developing any innovative plan requires communicating a very clear vision to a large group of stakeholders; however, Sugar Valley Energy is a project whose time has obviously come. Demands for new forms of renewable energy continue to grow to meet the California Low-Carbon Fuel Standard and federal requirements,” said Rubenstein.

    Sugar Valley Energy Project Facility Renderings

    California’s push toward reducing transportation fuels has sparked widespread infrastructure projects throughout the state. In addition to SVE, another notable project includes Phillips 66’s Rodeo Renewed renewable fuels plant. America’s largest independent refining and marketing company is transforming its San Francisco refinery into the world’s largest renewable fuels plant that can produce up to 50,000 bpd of renewable diesel. Phillips 66 plans on producing fuels not from crude oil, but from soybeans, cooking oil, fats, greases, and other feedstocks. The project is expected to be completed in early 2024 (see “Renewable Vows,” First Quarter 2021 ESG Review, p. 12).

    Lessons Other States Can Learn From California Projects

    Aside from hallmark utility-scale solar and wind facilities, California is home to successful community solar projects, microgrids, renewable natural gas, renewable diesel, sustainable aviation fuel projects, and more. California’s tax incentives and ideal climate make it the perfect testing ground for large and small clean energy projects that other states can model after. When asked how CE+P viewed the market for alternative fuels in California, Rubenstein was confident that the transition is still in its infancy. “CE+P is optimistic about the growing demand for lower carbon ethanol,” said Rubenstein. “It is committed to developing additional facilities that will help the state of California realize its clean energy goals. We are responding to the robust market demand for alternative, low-carbon transportation fuels and green power and are excited to play our part. SVE is well-positioned to be a significant market supplier and is working with large, credible firms as offtake partners. The project presents the opportunity to serve as a powerful engine of progress, growth, and prosperity.”

    “We absolutely believe other regions with ideal growing conditions for sugarcane could adopt this project model,” said Rubenstein. “SVE is an innovator in the green transportation fuels and biomass-to-energy market in California, with the opportunity to shape and drive the market. We hope to build follow-on projects and, in fact, already have a second project top of mind. We welcome the opportunity to share our experience with potential project proponents and stakeholders.”