The deal will take effect in early 2012 when the plant begins operation. Mid-Kansas has rights to extend the power purchase contract for additional years.

The proposed $450m plant in Hugoton, southwestern Kansas, will use 2,500 tons of biomass daily to generate power, and produce 16 million gallons of ethanol and 29,000 tons of lignin a year. The US Energy Department will cover $76m of the cost with a financial assistance award.

Plans