French energy company Veolia investing US$120M in biomass plant in Fairmont, Minn.

FAIRMONT, Minn. , August 16, 2008 () – A leading European energy services company wants to make this southern Minnesota city a model for the Midwest by investing at least $120 million in a biomass energy plant.

The Fairmont Energy Center would be owned by Veolia Energy, a unit of French utility Veolia Environment. It would start operating in May 2011 if all goes according to plan, local officials were told this past week.

The Southern Minnesota Municipal Power Agency, which sells wholesale electricity to 18 nonprofit municipal members, would buy the electricity produced by the plant. Steam could potentially be sold to local industries. The plant's generating capacity has not been determined.

The biomass would come from a variety of sources, including refuse-derived fuel (RDF), secondary wood waste and agricultural waste from crops such as alfalfa and soybeans. Refuse-derived fuel is processed trash, such as papers and plastics, that would be dried, condensed and shipped into Fairmont. The plant will not burn raw garbage.

By locating the plant in Fairmont, Veolia said it hopes to establish itself in the Midwest, showcase the new facility and encourage more biomass energy facilities in the region.

SMPPA and the Minnesota Department of Natural Resources are helping Veolia locate sources of biomass. And the company is in the process of signing a letter of intent with a supplier, Elodie Michaels, project director with Veolia's U.S. headquarters in Boston, told the Fairmont City Council and Public Utility Commission this past week.

''RDF is cheaper than any other fuel out there,'' Michaels said. ''Our goal is to get as many green credits as possible for SMMPA.''

SMMPA needs those renewable energy credits to meet state requirements that 25 percent of its energy come from renewable sources by 2025.

''SMMPA can do our project or buy wind,'' Michaels said. ''Right now, our solution is more cost-effective than wind.''

While well established in Europe, with nearly 200 plants and 5,000 employees, Veolia is relatively new to the United States.

Veolia will pick a site for the Fairmont plant in the next few weeks, choosing between demolishing the existing city power plant or a location in an industrial park.

E.J. Simon, the project's developer, is the middle man, coordinating efforts among Veolia, SMMPA and other parties involved in the process. In visiting biomass centers in eastern Europe, Simon said, he was amazed by the lack of smell and the appearance of the buildings, which might have passed for grocery stores in the United States. The plant would blend in with the other buildings in the industrial park.

As far as odor, the dried papers and plastics used for RDF doesn't smell, according to Simon, and neither do the secondary wood and other sources of biomass. The high-temperature technology used at the plant will further reduce odors and emissions.

Before any construction can begin, an environmental impact study must be completed. The study will take two years before it goes to the state for approval. Veolia said it does not anticipate any difficulties getting approval, since the plant would meet not only state and federal standards, but also European regulations, which are stricter than those in the U.S.

Construction itself is expected to take two years, with as many as 400 workers on site. Once complete, the plant would provide 20 full-time jobs.

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