Corn Plus Cooperative, a small, farmer-owned ethanol plant in Minnesota, recently announced that it has entered into a development relationship with John Deere to harness wind energy to help power their plant.

When completed, the wind farm will provide 45% of the plant’s electric demand.

And this is on top of the fluidized bed reactor the co-op has already installed that burns biomass and creates steam to run the plant. This system reduces natural gas usage by 50% to 60%.

An ethanol plant integrating alternative energy systems isn’t necessarily a new idea. In fact, in an effort to reduce energy costs, many of the newer ethanol facilities being built today are seeking alternatives to traditional, non-renewable energy sources.

Ethanex (EHNX.OB), for example, has entered into a joint venture with SEMO Milling LLC of Missouri to build a 132 mgy ethanol plant that includes a biomass-fired boiler at their corn milling facility in the SEMO Port Authority. The best part is, it actually utilizes Ethanex’s fractionated corn fiber as the primary fuel source.

Nothing is wasted. And everything has value.

(Ethanex has developed a fractionation technology that allows for the production of nearly 20% more ethanol without adding a dime to additional energy, water or feedstock costs.)

Ethanex has also been granted the exclusive right to develop a 132 mgy plant with Star Ethanol LLC in Illinois. This plant will employ the same biomass boiler technology and fractionated fuel source as SEMO.

Of course, there’s no denying that some ethanol companies can still keep energy costs low by utilizing coal instead of natural gas too.

Alternative Energy Sources (AENS.OB) will burn coal to generate heat for its plants. This offers a significant competitive advantage over traditional natural-gas-fired plants.

The cost of low sulfur powder River Basin Wyoming coal delivered to the plants is anticipated to be around $2.50 MMBTU compared with natural-gas-fired plants that pay $8.50 MMBTU for the calendar year strip.

Based on both their technological and economies of scale advantages, Ethanex and Alternative Energy Sources are two companies that many in the industry are predicting to be the new ethanol darlings of Wall Street in 2007.

If you sniff around the ethanol market, you simply cannot find this much bang for your buck anywhere else.

Sure, companies like ADM and VeraSun maintain significant market share. And if you’re looking for a safer ethanol play, these companies will certainly do the trick.

But if you’re trying to tap those undiscovered gems . . . the ethanol companies that are not the leaders now, but have the technological muscle and commodities and logistical expertise to compete with the likes of ADM and VeraSun in as little as one to two years . . . then I strongly recommend you take a look at both Ethanex and Alternative Energy Sources.

For more on these companies, as well as up-to-date news and information on the ethanol market as a whole, visit Green Chip Stocks now.

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