As 2014 comes to a close, South Carolina became the 44th state to institute net metering. The news comes on the heels of the announcement that New York has set a significant net metering cap expansion. The New York Public Service Commission agreed to double the allowable rooftop solar capacity for solar net metering. The solar market has already created 5,000 jobs in New York.

Net metering allows solar customers to get credit on their utility bills at the retail rate for any excess power their rooftop solar installations send back to the grid. Utilities sell this clean energy to neighboring customers for the full retail value. In South Carolina, Duke and SCEG agreed to full retail rate net metering and to not seek any solar-specific charges until 2021.

In a recent South Carolina poll, 73 percent of respondents across political party lines said they want to see more solar growth, and a strong majority of South Carolinians (more than 75%) agreed that rooftop solar is an important part of providing choice and competition in electricity.

“Repeated expansions and the addition of a 44th net metering state demonstrate the strength and fairness of solar net metering,” said Bryan Miller, co-chairman of the Alliance for Solar Choice (TASC) and VP of Public Policy for Sunrun. “The public wants more rooftop solar, and they support net metering as the policy that drives solar growth.”

The Alliance for Solar Choice (TASC) says they were instrumental in the wins and this year have delivered seven net metering expansions including cap increases in Massachusetts, New Hampshire, Rhode Island, South Carolina and Vermont. The utilities have failed to achieve any net metering retractions.

The Renewable Fuels Association (RFA) submitted comments to the Food and Drug Administration (FDA) yesterday on the supplemental rulemaking proposal outlining best practices for the regulation of animal food under the Food Safety Modernization Act (FSMA). The act outlines regulations for animal feed, which includes the ethanol co-product dried distillers grain.

RFA submitted comments earlier this year following the initial proposed rule noting that animal feed would be unnecessarily regulated in a similar fashion to human food. RFA praised the FDA for addressing this concern in its updated version, noting that the “revised CGMPs (current good manufacturing processes) in the supplemental proposed rule appear more applicable to the animal feed industry and appear to provide more flexibility for the wide variety of the animal feed facility processes covered.”

However, RFA raised concerns with additions to the rule that would implement “…product and environmental testing programs, supplier approval programs, and verification programs that were not in the initial proposed rule language.” The comments stress that an individual plant “…should be provided the flexibility to determine its own needs and compliance strategy.” RFA also noted that “If applied in a prescriptive and indiscriminate way, these programs can add unnecessary cost burdens and divert resources away from the effective practices that ethanol producers currently use to assure safe, high quality co-products.”

Read RFA comments here.

MagneGas Corporation has completed construction of its Venturi sterilization system at a major hog farm in technology. The company has developed a patented technology that converts liquid waste into hydrogen-based fuel. Venturi will process hog manure into a low-oder fertilizer that can be safely used on crops. In addition, MagneGas fuel will be produced as a byproduct that can be co-fired with propane or natural gas to reduce other fuel needs.

Following a successful demonstration, the Indiana farm owner has indicated that he plans to purchase the system to use for his manure sterilization needs and partner with MagneGas to launch the market for the use of MagneGas systems in the agricultural industry worldwide.

“I am excited that MagneGas has achieved this significant milestone. Having the ability to test our new high flow Venturi system in a real world environment with such a highly respected stakeholder in the agricultural industry speaks volumes as to how far we have come as a company,” said Ermanno Santilli, CEO of MagneGas. “We are looking forward to working with such a cutting edge farm on a system that we believe will change the way the world looks at liquid wastes.”

MagneGas and its partners have demonstrated that a wide variety of liquids wastes can be sterilized such as blood, sewage, manures, leachates and a variety of sludges. As recently as July 2014, MagneGas corp confirmed that it meets EPA 503.32 by sterilizing hog manures taking coliform bacteria counts to “Undetectable Levels”. The company believes meeting this rule transforms this Class B Manure into Class A suitable for land application and in some cases fertilization.

The Biofuels Digest Index, an index of publicly traded biofuels stocks, regained 0.63 percent to close at 59.02 as ethanol equities jumped.  For the day, Dyadic (DYAI) surged 8.42 percent to $1.03, while Aemetis (AMTX) rebounded 8.37 percent to $5.05. Among other equities, Shell (RDS-A) jumped 3.91 percent to $63.31. Overall, advances led declines 8 to 7 for the day.

Castor, jatropha, pongamia — the three steps that Bosques Energeticos is taking in piloting its way to success in fuels, chemicals and other markets. Can the early-stage company thrive, based on its uncommon approach to intercropping?

The Digest investigates.

In science, there exists the difficulty in developing a new energy crop —  improving yields and stress tolerance, identifying the right geographies for deployment, developing and sharing the agricultural practices and training, and so on.  A number of new energy crops and residues have been brought along by companies such as Agrisoma, SGB, Yulex, Ceres, Chromatin, NexSteppe and more, despite the odds.

But there also has been the difficulty in developing an economic model for deployment, that proves more attractive and safe than the “here’s your seed, get going” approach that has proven uninspiring to local growers.

Indeed, growers have proven adept at trialing new energy crops, but bailing at the first sign of trouble — and the lack of robust models for deployment that offer sufficient returns is a prime reason for that, No more so than with the introduction of new, high-yield perennials, trees and bushes whose seeds take years to develop but provide excellent economics in the long-term. Annuals have been easier to deploy, given the fast returns.

Along comes Bosques Energeticos to change that. A Mexican early-stage company, it has been best known for developing improved jatropha varietals. But as former SBG CEO Kirk Haney often observed, “it wasn’t jatropha that failed, it was the jatropha business model that failed.”

So what’s different about Bosques?

For one, it’s an intercropper, in terms of deployment — multiple crops go into the same field.

We’ve seen increasing attention to multi-crop strategies in recent months, as sweet sorghum continues to to attract attention as a companion to sugar cane, proving impressive sugar yields in the four months of the year when cane is not harvested.

So, there’s off-season potential. But what about the pre-season potential — the period when jatropha is coming to maturity?

In fact, that’s what the Bosques multi-year, multi-crop strategy is all about. In their model, growers plant castor as a lower-value, but relatively instantaneous oilseed cash crop — at the same time as jatropha is planted for the mid-term, and pongamia is planted for the long-term.

Legendary’s interest

“D1 and GEM rise to prominence and collapsed, all associated with jatropha,” said Zafar Karim, chairman of Legendary Investments, a listed London company which invested in Bosques in 2010 and effectively put them on the map. “And one of those ventures was quite serious in its ambitions, and relatively accomplished. So, I grilled Bosques hard when I first met them. One thing I saw is that one of the biggest problems with small companies like Bosques is actually that they are so unknown and under the radar that it becomes a problem. but investing via a listed company we have given them a profile, without their having to be a listed company themselves at this time.

Pon-what?

Yes, pongamia — grown most extensively in India, but generally not grown in much volume anywhere around the world, and not because its oilseed yields are not tempting in the long-term. Simply put, the tree takes too many years — think 5-7 — to get established to tempt many growers.

So, think years 1-3, castor dominates, years 4-7 the jatropha comes into its own, and for the long-term pongamia provides the enduring high-value.

Follow the agronomy

“We need bring forward the cash flows,” said Karim. “The key is to make it economically more attractive to growers, and follow a strategy of looking at what others had done in the field, see what the fundamental reasons behind the mistakes, avoid those and do better.

“One thing we found is that it’s not about the lab, it is about doing it on the ground. Finding elite types, don’t compete with food, be soil improving, and make sure you empower the people on the ground.

“In the early 2000s the companies used outsourced farming. There’s little control when you outsource.

Farmers give up very quickly. Our view is to do estate farming — have our own farmers and train them. Of course, it becomes easier to do this and get the land you need in the places you need it, when you are investing in the local economy, and improving the soil.

“Also, the problem with the seed marketer as opposed to being an oil marketer: if we sell just the seed, and let other people do the work, there’s knowledge you transfer with a new crop, and you lose that value once they have your seed.”

Improving yields and speed

“With pongamia,“ Karim said, “typically you get flowers in year 4 and seeds in years 5, so far as we knew no one had gotten flowers in 2 years, but we are doing that now with our 4G pongamia. With out 4G jatropha we are now producing fruit and seeds in under 1 year, and our pods contains 3-4 seeds. Jatropha typically fruit and flower 18 months.”

Margins and yields

“If we look at year one and year two, we project per hectare 1200-1300 kg from castor, and that’s conservative. After year 4, pongamia and jatropha kick in. We see jatropha starting at 500 and getting up to up to 5500 – 6000 kg per hectare of seed, with the higher 30s of oil content, by year 5.

With pongamia, we see as much as 3000 kg of seed in year 4, 10000 by year 7, and in the 17000-18000 range by year 10.

Margins? Castor, we see at 55-60 percent gross margin, and that’s not out of the norm. Jatropha we see it start around 30 percent and peak at 70 percent. Pongamia, we start at high 60s then peak at more than 90 percent.

“It’s something like olive groves,m where in the first year you see zero or negative margin, but at maturity, it’s almost like you have to just shake the trees with shaker a couple of months of the year. That’s why we have a long-term focus on pongamia.”

Models

Right now we are planting on 20 hectares of our own and trialing elsewhere— as opposed to doing all the work in the lab or going immediately to 1000 hectares or more. I told the team, when we invested, “I don’t want you to do 1000 hectares, I want to focus on developing the jatropha on small scale, and get the profile right.

“We have pursued that over the last 4 years. But 20 hectares is one thing, but once you go to 500 or 1000 you have scalable operations, and so our next step is to go to 500-1000 hectares and make sure we get the operations right. Then, we’ll list the company

Next steps

“Now, we can go out and seek partners — partners who will bring land, or capital, or “in the space” expertise.

Geographies? “It’s easiest to be in Mexico, but we have had discussions with respect to Africa and Southeast Asia. SInce we have had success taking plants from India and doing well in Mexico, I am reasonably confident we can do a test plantation in other parts of the world, and prove out our model elsewhere over time.”

The Bottom Line

Bosques has a fascinating approach to establishing a business. Do they have the right seeds — combining robust yields with a broad enough geographic potential? Time will tell. But one thing is for sure — it’s one of the most interesting ways we have heard described of how to provide shorter-term returns and lowered risks for investors who will like the long-term numbers of pongamia but wonder how to make an investment perform well in the early years.

In Turkey, the country is effectively no longer accepting imports of U.S. corn coproducts following the stepped-up enforcement of existing biosafety laws that restrict which genetically modified (GM) corn varieties may enter the country’s grain supply. As of Dec. 8, three shipments of U.S. distillers dried grains with solubles (DDGS) have been rejected following the detection of unapproved GM events, and for the same reason at least one other vessel of U.S. DDGS has been diverted from Turkey to another buyer while on the water.

The U.S. Grains Council alerted members on Dec. 8 that other shipments of corn co-products including DDGS sent to Turkey were also likely to be rejected. Internal issues are the apparent cause of new enforcement measures that are leading to these rejections. One factor is that some companies inside Turkey that do not import DDGS have encouraged the Turkish government to increase its oversight of those that do import DDGS.

Turkey has approved 16 GM corn events including 13 in December 2011 and three more in February 2012. The country has also rejected six GM corn events. There have been no new applications for approval since February 2012, meaning any event introduced since that time is not approved. All of the approvals and rejections were based on applications from the Turkish Federation of Food and Drink Industry Associations and the Turkish Feed Millers Association rather than technology providers, who traditionally submit such dossiers.

Since the Turkish biosafety law was put into effect in 2011, U.S. exports of DDGS to the country have varied as trading companies took differing approaches to working within the restrictions that are now being fully enforced.

Because U.S. DDGS is now being rejected under existing law, options for quick recourse are limited. However, USGC staff and consultants in the region and in the United States are working with contacts in Turkey and at the U.S. Embassy in Ankara to find an appropriate solution and reopen the market.

VecoPlan — complete systems for shredding, screening, separation, conveying, metered feeding of biomass prior to conversion to advanced biofuels

West Salem — Introducing WSM BioPrep — Biomass Feedstock Preparation Machines Systems

In Israel, Evogene and CNH Industrial Latin America Ltda. announced ongoing cooperation involving the development of an efficient, easy-to-adopt combine solution for the large-scale harvesting of Evofuel castor bean varieties in Latin America. The collaboration between CNH Industrial and Evofuel was initiated in 2012 and has recently been extended for an additional year.

Currently in its prototype phase, the final product, when released, will come to market under the Case IH brand. Case IH is a brand of CNH Industrial which globally produces agricultural machinery including tractors, combine harvesters, sugar cane, coffee and cotton harvesters, planters and sprayers.

VecoPlan — complete systems for shredding, screening, separation, conveying, metered feeding of biomass prior to conversion to advanced biofuels

West Salem — Introducing WSM BioPrep — Biomass Feedstock Preparation Machines Systems