BioCycle July 2006, Vol. 47, No. 7, p. 51
Alternative power source will cycle $16 million per year through the Minnesota economy while reducing greenhouse gas emissions and soil erosion.

In Minnesota, the Shakopee Mdewakanton Sioux Community (SMSC) – a federally recognized Indian Tribe – and Rahr Malting Company of Shakopee have created a biomass-to-energy project called Koda Energy. The partnership combines heat and power to generate 16.5 megawatts of baseload electricity which will deliver 125 million Btus/hour of process heat to the company’s production malting operation. It will also replace enough natural gas to heat 11,000 homes.
By supplying power to the tribe and company, it insulates both from fluctuating energy prices and uncertain supplies – protecting over 100 local Rahr jobs and a major market for Midwest barley. It also protects nearly 4,650 jobs in the Sioux community. Koda Energy will create an annual payroll of over $750,000. The biofuels program will provide wildlife habitat, reducing soil erosion and groundwater pollution. To fuel its boilers, the project will require up to 180,000 tons of biofuels such as grain processing by-products, wood and dedicated energy crops – pumping $6.4 million annually into the local farm economy.
Located in the Minnesota River Basin – the state’s most polluted river area – energy crops such as switchgrass can improve water quality by providing a continuous cover that stabilizes the soil, decreases nutrient transport and protects against erosion. The Union of Concerned Scientists estimates that converting an average size farm (1,000 acres) from corn to switchgrass could save over 66 truck loads of soil per year from erosion.
By-products from agricultural processing industries that Koda Energy will use as fuel are currently low value residues to extend livestock feed. Because the material has little nutritional value, using it as fuel instead of mixing it with feed will raise the quality of livestock feed.
Initial construction will pump $55 million into the local economy. Long-term effects of this project will annually cycle over $16 million through the Minnesota economy. Near an electrical substation and major power lines, the 16.5 megawatts of renewable power can be added without requiring expensive transmission line construction and infrastructure upgrades.
Impact On Global Warming
The need to cut greenhouse gas emissions such as CO2 will drive up prices for fossil fuel produced energy. By replacing coal-fired base load, Koda Energy’s biomass to energy project will cut CO2 emissions by over 190,000 tons per year. Koda Energy will cut annual CO2 emissions by over 70,000 tons by generating steam from biomass instead of natural gas. Reducing fuel combustion from trucks transporting low value agricultural by-products to Duluth for shipping could reduce CO2 emissions from diesel fuel combustion by over 3,000 tons per year.
The DOE bioenergy feedstock program identifies switchgrass as an excellent source for sequestering carbon because the plant’s roots can reach depths up to 20 feet. Planting 30,000 acres in switchgrass or other biofuels could annually sequester another 15,000 to 30,000 tons of carbon.
Koda Energy will be located next to the Rahr Malting Co. facility. Rahr is a family owned business that has operated since 1847. The Shakopee Rahr plant is currently the largest malting facility in the world. The SMSC is located six miles south of the Rahr Plant. Since 1969, SMSC has operated several successful businesses and community organizations, including a gaming commission employing 30 people, two casinos and entertainment complexes with over 4,500 employees, and a Tribal Government staffed by 125 people that includes a fire department and a public works department.
This description of the Koda Energy project was supplied to BioCycle by Paul Kramer of the Rahr Malting Company based in Shakopee. Kramer can be contacted via e-mail at pkramer@rahr.com.