Today, as technicians begin production at Lincolnway Energy LLC’s newly built ethanol plant west of Nevada, the company is already planning for an addition that would double the plant’s capacity to 100 million gallons per year.

The expansion plans are an indication of just how quickly the nascent ethanol industry is moving forward, said Rick Brehm, president and CEO of Lincolnway Energy.

“When this plant was conceived, there was only one 100-million-gallon dry-mill plant in operation, in Aurora, S.D.,” he said. “As we sit here today, there’s one going to open this month in Fairbank and another that has already opened at Fort Dodge. Another is now proposed for Grinnell. They have proved they are viable plants; the efficiencies are there. It looks like in the future, if there is adequate supply of feedstock, we may see many more plants of that size.”

The Nevada plant became the 23rd ethanol plant operating in Iowa. In addition to the 100-million-gallon Hawkeye Renewables LLC plant opening in Fairbank, Frontier Ethanol LLC will also begin production at its Gowrie plant this month, bringing the total number of active Iowa plants to 25. Four other plants are under construction across the state, and more than 20 projects are at various stages of the planning process, said Monte Shaw, executive director of the Iowa Renewable Fuels Association.

The United States is on track to consume approximately 5 billion gallons of ethanol this year, Shaw said, based first-quarter data, compared with just over 4 billion gallons last year. The plants that are currently under construction across the country will increase the production capacity by another 2.5 billion gallons.

“(Iowa has) historically made up about 25 percent of ethanol production in the U.S., and our construction is in line to probably keep it there for the next couple of years,” Shaw said. “After that, it’s hard to tell with this industry.”

Greater Des Moines residents are going to see more plants spring up around Central Iowa. Investors are now being sought for a 100-million-gallon ethanol plant planned for West Metro Interstate 80 Rail Park near Dexter. The same company planning the Dexter project, Alpha Holdings LLC, is also planning a 100-million-gallon plant in Tama.

At the same time, Lincolnway Energy is working with the city of Des Moines to buy a parcel of land in the Agrimergent Park area on which to build a 100-million-gallon plant.

“Six months ago, the group here at Lincolnway Energy determined there was an opportunity to site a facility in Des Moines because of the amount of corn in the area and access to transportation,” Brehm said. “With four railroads serving Des Moines, transportation was a very important factor. It’s also a hub for Central Iowa energy distributors (fuel blending facilities) for Conoco Phillips, BP and Magellan Midstream Partners LP.

“This group felt there were efficiencies in having two plants located within close proximity to each other,” he said. “And we really felt that if Des Moines was going to be the alternative energy capital, it was appropriate to have an ethanol plant located right within the city of Des Moines.”

The company also has two privately-owned parcels under consideration as alternate sites, but Agrimergent is the preferred choice because of its proximity to other complementary agricultural and industrial enterprises, Brehm said.

Elly Walkowiak, the city’s economic development coordinator, has been working with Lincolnway regarding the possible purchase of the 166-acre site, which is located at the southwest corner of Vandalia Road and Southeast 43rd Street. The city is in the process of having the property surveyed and an appraisal conducted, she said.

Because the land must be sold competitively at its fair market value, “there are a lot of processes involved in this, and we’re in the early stages,” she said. Among the next steps are to negotiate an agreement with the Good Neighbor Task Force representing the neighboring landowners, and a review of the minimum requirements the project must meet by the Urban Design Review Board before consideration by the City Council. It’s possible the company could complete the process and be able to begin construction by late fall or early winter, Walkowiak said.

If Lincolnway does build a plant in Des Moines, it’s likely to use some of the same innovations it has built into its Nevada plant. Among those is the capability of loading unit trains of 75 cars to transport the finished ethanol or distillers dried grain, a byproduct of the ethanol production process used for animal feed, to market.

“By loading 75 cars of ethanol or DDG, we’re able to ship at the most efficient rates possible,” Brehm said. “We have room for more than 225 rail cars here on site. A lot of plants are designed with a 100- to 150-car capacity.”

Additionally, the Nevada plant is one of the few plants in the industry to use coal to fire the boilers that are used both to fuel the production process as well as to dry the distillers grain prior to shipping it out for sale as animal feed.

In addition to coal being in plentiful supply domestically, “the technology for burning coal is the type that would allow us to burn wood, sawdust or shavings in the future,” he said.

Corn isn’t the only feedstock the plant may use in the future to produce ethanol, Brehm said. At some point, it may become economical to use use stalks, grasses or other materials.

“Personally, I think in five to seven years we will see that technology advance where it could be a very economically efficient process,” he said. “Today, it doesn’t allow an economic return because the efficiency isn’t there.”

The payback period for a plant such as Lincolnway’s, whose equipment alone represents a $75 million investment, averages five to seven years.

“It varies a lot from plant to plant, because of differences in the cost of corn and transportation costs,” Brehm said. “That’s why you’ve seen the phenomenal growth here in Central Iowa, because of the abundance of corn.”

According to the IRFA, a typical ethanol plant will raise the price of corn in about a 50-mile radius by approximately five to 10 cents per bushel.

“You multiply that by 15 to 20 million bushels of corn [used by a plant in a year], that’s a lot of additional money for the local economy,” Shaw said. “And it raises the price for every bushel of corn sold in that area, because it has to compete. We’re going to be chewing up over 500 million bushels of Iowa corn, so you dump that back into the piles of grain we sell over the winter, it will definitely have an impact.”