The cellulosic fuel industry took a step forward today, as Broomfield, Colo.'s Range Fuels broke ground on what will be the first commercial scale cellulosic ethanol plant in the U.S., and perhaps the world.

The planned 100 million gallon per year plant in Soperton, Ga., is to start out at 20 million gallons (see Cleantech.com's Range Fuels gets cellulosic production plant go-ahead).

Backed by Khosla Ventures, Range Fuels was selected by the U.S. Department of Energy earlier this year for $76 million in financial support to build a commercial cellulosic ethanol plant (see U.S. government granting $385M to six cellulosic ethanol plants).

A chunk of that money is to go toward the first phase of the Soperton plant, with the remaining government cash being used for the plant's expansion, to be completed in 20 million gallon increments.

Heading up Range Fuels is Mitch Mandich, a former Apple Computer executive who reinvented himself as a venture capitalist.

It looks like you could be the first to market with a commercial scale cellulosic ethanol plant.

That's what we think. We were one of the six DOE grant award recipients back in February, and we just put out an announcement today that we actually signed a technology investment agreement with the DOE. They've obligated $50 million over the next 12 months toward our build schedule of the first phase of the plant.

With that help, and with other funding, we believe that we have at least a few years headstart over our competition for cellulosic ethanol.

It's a ceremonial groundbreaking today, but we'll have bulldozers out on site within the next week, and we're going to begin construction. It's pretty exciting right now.

How did the DOE funding process work?

There were six winners who were able to negotiate with DOE for the grant. And so the negotiation process was about a six, seven, eight month process, and each of the companies has to go through this process in order to secure funds.

Out of first year funding of $72 million from the DOE toward all of these award winners, our company was able to receive $50 million of that. Other companies are still negotiating their contracts and for the first year will have lesser amounts.

I think that's a reflection of the DOE looking at technology and who's ready to scale and get into construction and drive the technology forward.

So who's nipping at your heels in the race to commercialization?

It's hard for us to understand, because a lot of these companies are private, as you know. And if they are publicly traded companies, and a few are, they're pretty quiet about what they're doing. The best we can go by is what we're hearing in the industry and where the technology is.

A lot of the alternative approaches are enzymatic technology. Our technology does not use enzymes at all. We're a thermo-chemical conversion process. What we're understanding from enzymes is that they're probably still at lab scale today and at least a few more years, if not longer, away from a commercial plant.

I think, again, we have at least a two to three year headstart, but technology can close quickly. So it's incumbent upon us to continue to iterate on our technology, because we design it. We're not dependent on anyone else, and so that is our core competency.

We're going to continue to iterate on design and improve it, bring down cost and improve yields over time. So we'll be working real hard to maintain what we think is a technology lead today over the competitors.

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