In Australia it is currently a contencious issue as to the use of ethanol in fuel, with In MY OPINION ONLY, auto companies basicaly opposing it and the government basically, but binconsistently, endorsing it. I expect the auto co attitude is at least partly based on resisting the need to do some costly modifications to their cars, and possibly an interest in maintaining the status quo re oil company profits and mutual interest (wow, I didn't think I had a conspiracy theory complex).
The apparent government inconsistencies here possibly stem from the fact that the ruleing coilition government is composed of two parties, one with roots in big business and the other with roots in rural industries.
The ethanol used here is allegedly from sugar cane, as we have a glut, and the government is trying to prop up the sugar industry, while also, trying to score brownie points with the greens.
The extra power comes the fact, that even though the ethanol contains less energy per gallon (litre, pound or whatever), it also requires a richer mixture, which more than compensates, giving a net power increase.
The extra fuel hurts VE slightly, but the cooling effect helps VE. I am not sure of the net result.
At 10% only, these figures are significantly diminished, and masked by other additives in the fuel.
If ethanol is used as a substitute for other octane boosters, to maintain the same octane rateing, you cannot raise compression, however if it is used in addition to other octane boosters, you will get an increased octane rateing (depending on the final formulation) which will allow higher compression ratio, which will give better thermal efficiency, compared to the vsame formulation at lower compression.
Sorry if this all sounds verbose and complex, but there seems to be a lot of confusion out there. Regards
pat