Developing Business Strategies to Support a New Energy Crop Business, National Renewable Energy Laboratory

ANTARES investigated approaches adopted by agriculture to organize and capitalize new business entities that include ownership in process facilities and traditional crop production elements of farm-based products. ANTARES contacted state and county agricultural extension offices and USDA headquarters personnel to obtain information on available programs and methods to promote new business alliances and strategies. ANTARES developed a cash flow model to evaluate promising forms of energy crop businesses. Economic analysis of capital requirements, capital sources and expected returns on investment for cooperative ownership were investigated.

ANTARES also reviewed existing and proposed energy, agricultural, environmental, and tax legislation to determine impacts on new energy crop businesses. In addition to the qualitative impacts, we used results to augment our energy crop business model described above. Particular emphasis was place on proposed extensions of energy tax credits, and Farm Bill legislation concerning use of Conservation Reserve Program lands for energy crops.

The final report consisted of a business manual for energy crop enterprises evaluating alternative business structures and several crops including willow, switchgrass, and alfalfa. The business organizations included farm co-op ownership with sales to both independent power producers and regulated utilities, and direct sales from farmer to power producer.