april 2015 biomass magazine

Great ExportationsNeste Oil Stakes High In Global Renewable Diesel MarketPage 74

www.BiomassMagazine.com

April 2015

Plus:US Distributors Look To European Technology To Grow Biomass HeatSectorPage 44

And:Resources For Biomass Power ExportersPage 24

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APRIL 2015 | BIOMASS MAGAZINE 3

INSIDE

APRIL 2015 | VOLUME 9 | ISSUE 4

POWER 20 NEWS

22 COLUMNProving Biomass Power EconomicsBy Bob Cleaves

24 FEATUREEmpowering ExportersU.S. exporters are poised to bene t from resources made available by the federal government.By Anna Simet

06 EDITORS NOTEPlaying A Global GameBy Tim Portz

07 INDUSTRY EVENTS

08 BUSINESS BRIEFS

12 BIOMASS CONSTRUCTION UPDATE - Q1

82 MARKETPLACE

24

ON THE COVER: Neste Oil ships its NExBTL renewable diesel to the U.S., where it qualifi es as an advanced biofuel under the federal renewable fuel standard.PHOTO: NESTE OIL

PELLET 30 NEWS

32 COLUMN WRI Wrong On Wood PelletsBy William Strauss

34 FEATUREAn Industry Looks At 50 In its climb to 50 million metric tons, the pellet industry must cement its value proposition with policymakers, establish uni ed sustainability standards and open and grow new markets. By Tim Portz

4 BIOMASS MAGAZINE | APRIL 2015

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BIOGAS 54 NEWS

56 COLUMNPublic-Private Partnerships Enable Project SuccessBy Amanda Bilek

58 FEATUREAll Roads Lead To North AmericaIn response to abated domestic market growth, foreign biogas companies are eyeing opportunities in the U.S. and Canada.By Keith Loria

THERMAL 40 NEWS

42 COLUMNThe UKs Untapped Market PotentialBy Neil Harrison

44 FEATURENavigating The Sea Of ApprovalImporting proven technology is one way U.S. biomass boiler distributors are expanding market reach.By Katie Fletcher

ADVANCED BIOFUELS & CHEMICALS 66 NEWS

68 COLUMNToday's Uncertainties No Match For Tomorrow's PromiseBy Matt Carr

70 FEATURERiding It OutDefending the renewable fuel standard and the commercialization of cellulosic ethanol were topics of discussion at Growth Energy's 6th Annual Leadership Conference.By Susanne Retka-Schill

74 FEATUREFeedstock Importer, Renewable Diesel ExporterNeste Oil imports feedstock from ve continents to annually produce over 2 million tons of renewable diesel for export to key markets.By Ron Kotrba

INSIDE

APRIL 2015 | VOLUME 9 | ISSUE 4

ADVERTISER INDEX

80 2015 International Biomass Conference & Expo

83 2015 National Advanced Biofuels Conference & Expo

84 4B Components, Ltd.

46 Agra Industries

21 Airofl ex Equipment

27 AMANDUS KAHL GmbH & Co. KG

11 Andritz Feed & Biofuel A/S

2 Astec, Inc.

13 B&W MEGTEC

81 Babcock Power

14 BBI Project Development

20 BETH USA, LLC

28 Binswanger

52 BRUKS Rockwood

48 Continental Biomass Industries

67 Control Union (U.S.A), Inc.

62 CPM Roskamp Champion

64 CPM Wolverine Proctor, LLC

54 DI PI

15 EAD

40 EBM Manufacturing

23 Elliott Group

36 EUBCE 2015

63 Evergreen Engineering

69 Geneva Marketing

31 Gray

18 Heating the Midwest 2015

7 Hermann Sewerin GmbH

65 Hurst Boiler & Welding Co. Inc.

16-17 IEP Technologies

38 IHI Power Services Corp.

77 Intersystems

29 Iowa Economic Development Authority

55 Javo International BV

47 KEITH Manufacturing Company

76 MonitorTech Corporation

4 Morbark, Inc.

78 PHG Energy

43 Port of Longview

79 Powerhouse Technology

61 ProAg - Morris Industries(USA) Inc.

66 Probe America

49 ProcessBarron

57 Retsch, Inc.

37 SAMSON Materials Handling Ltd.

73 Scientifi c Dust Collectors

9 Thermal Refactory

26 Tramco, Inc.

72 Turboden S.r.l.

41 Uzelac Industries

50 Vapor Boilers

39 Vecoplan LLC

19 Vermeer Corporation

10 West Salem Machinery Co.

33 Williams Crusher

8 Wolf Material Handling Systems

53 WoodMaster

51 WorldWide Electric Corp.

58


Playing A Global Game

In this months issue of Biomass Magazine, our team brings to print a theme that we have explored online and at our conferences for years. For this companion issue of the International Biomass Conference & Expo, our team investigated the increasingly global nature of the bioenergy industry. The stories make it clear that while policies that establish and support biofuels, biogas or wood pellets may come and go, the ability of the global biomass community to discover and use them to grow their business is constant.

In his page-58 feature, All Roads Lead to North America, Keith Loria explores the migration of tech-

nology companies from Germany to North America as German policies became less lu-crative. Loria talked to GICONs Wayne Brown, who underscored this trend, saying, The expanse of opportunities in the U.S. and Canada is defi nitely a factor in our decision to pursue work in North America, as is the relative weakness in the German biogas market at the moment. For GICON, the best hedge against the fi ckleness of policy-established markets was to pursue opportunities in multiple markets.

While writing his page-74 story, Feedstock Importer, Renewable Diesel Exporter, about renewable diesel producer Neste Oil, Senior Editor Ron Kotrba was reminded that global strategies arent limited to markets for products, but can also be leveraged for feed-stock acquisition. Neste Oil scours the world for both waste and virgin oil feedstocks and is currently procuring them from every continent except Africa and Antarctica. This strategy has been particularly important as Neste looks to grow the percentage of waste oils in its feedstock portfoliowaste and residue oils now represent over 60 percent of Neste Oils total feedstocks, up from 35 percent just three years ago.

Finally, while writing An Industry Looks at 50 on page 35, the advantage that in-cumbent energy solutions have in a global market became clear to me. During my con-versation with Seth Ginther, executive director of the U.S. Industrial Pellet Association, I was struck by how much time he spends working to unify sustainability requirements of European Union member states so that his constituents dont have to encounter a differ-ent compliance burden with each shipment. This is a burden that the coal industry simply does not face. Still, when a signifi cant part of ones value proposition is sustainability, he must embrace the call to substantiate that claim while fi guring out a way to do it effi ciently.

While opportunities may move around a bit, this industrys ability to adapt and serve new and different markets remains strong.

TIM PORTZVICE PRESIDENT OF CONTENT & EXECUTIVE [email protected]

EDITORS NOTE

EDITORIALPRESIDENT & EDITOR IN CHIEF Tom Bryan [email protected]

VICE PRESIDENT OF CONTENT & EXECUTIVE EDITOR Tim Portz [email protected]

MANAGING EDITOR Anna Simet [email protected]

SENIOR EDITOR Ron Kotrba [email protected]

NEWS EDITOR Erin Voegele [email protected]

STAFF WRITER Katie Fletcher k [email protected]

COPY EDITOR Jan Tellmann [email protected]

ARTART DIRECTOR Jaci Satterlund [email protected]

PUBLISHING & SALESCHAIRMAN Mike Bryan [email protected]

CEO Joe Bryan [email protected]

VICE PRESIDENT OF OPERATIONS Matthew Spoor [email protected]

SALES & MARKETING DIRECTOR John Nelson [email protected]

BUSINESS DEVELOPMENT DIRECTOR Howard Brockhouse [email protected]

SENIOR ACCOUNT MANAGERChip Shereck [email protected]

ACCOUNT MANAGER Jeff Hogan [email protected]

ACCOUNT MANAGER Tami Pearson [email protected]

CIRCULATION MANAGER Jessica Beaudry [email protected]

TRAFFIC & MARKETING COORDINATOR Marla DeFoe [email protected]

EDITORIAL BOARD MEMBERSChris Sharron, Western Oregon Wood Products

Amanda Bilek, Great Plains Institute

Stacy Cook, Koda Energy

Ben Anderson, University of Iowa

Justin Price, Evergreen Engineering

Adam Sherman, Biomass Energy Resource Center

Biomass Magazine: (USPS No. 5336) April 2015, Vol. 9, Issue 4. Biomass Magazine is published monthly by BBI International. Principal Offi ce: 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. Periodicals Postage Paid at Grand Forks, North Dakota and additional mailing offi ces. POSTMASTER: Send address changes to Biomass Magazine/Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, North Dakota 58203.

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INDUSTRY EVENTS

Heating the MidwestAPRIL 20, 2015Minneapolis Convention CenterMinneapolis, MinnesotaThe Midwest relies heavily on fossil energy for heating homes and business-es. Heating the Midwest is a network of thermal biomass advocates working to increase awareness and usage of renewable biomass for heat, which has the potential to greatly reduce the regions dependence on propane and fuel oil for thermal energy. Colocated with the 2015 International Biomass Con-ference & Expo, being held in Minneapolis, Minnesota, Heating the Midwest is a compelling combination of the right topics being discussed at the right place, at the right time.866-746-8385 | www.biomassconference.com

International Biomass Conference & ExpoAPRIL 20-22, 2015Minneapolis Convention CenterMinneapolis, MinnestoaOrganized by BBI International and produced by Biomass Magazine, this event brings current and future producers of bioenergy and biobased products together with waste generators, energy crop growers, municipal leaders, utility executives, technology providers, equipment manufactur-ers, project developers, investors and policy makers. Its a true one-stop shopthe worlds premier educational and networking junction for all biomass industries.866-746-8385 | www.biomassconference.com

International Fuel Ethanol Workshop & ExpoJUNE 1-4, 2015Minneapolis Convention CenterMinneapolis, MinnesotaThe FEW provides the global ethanol industry with cutting-edge content and unparalleled networking opportunities in a dynamic business-to-business environment. The FEW is the largest, longest running ethanol conference in the worldand the only event powered by Ethanol Producer Magazine.866-746-8385 | www.fuelethanolworkshop.com

National Advanced Biofuels Conference & ExpoOCTOBER 26-28, 2015Hilton OmahaOmaha, NebraskaProduced by BBI International, this national event will feature the world of advanced biofuels and biobased chemicalstechnology scale-up, project nance, policy, national markets and morewith a core focus on the industrial, petroleum and agribusiness alliances de ning the national advanced biofuels industry. With a vertically integrated program and audi-ence, the National Advanced Biofuels Conference & Expo is tailored for industry professionals engaged in producing, developing and deploying advanced biofuels, biobased platform chemicals, polymers and other re-newable molecules that have the potential to meet or exceed the perfor-mance of petroleum-derived products.866-746-8385 | www.advancedbiofuelsconference.com


PEOPLE, PRODUCTS & PARTNERSHIPSBusiness BriefsBDI-BioEnergy constructs biogas project in Poland

BDI-BioEnergy International AG announced it has begun construction of a multifeedstock biogas plant for the recycling of poultry manure in Poland. The facility has the capacity to process 65,000 tons annually and is scheduled to begin operations next year.

Sapphire Energy adds team member

Sapphire Energy Inc. has added Jim Astwood as senior vice president of product management. He will lead several of the companys expanded business develop-ment efforts, with a near-term focus on applying its renewable algae-based technology to address a grow-ing need for reliable sources of human nutraceuticals, animal and aquaculture feed, and more. Astwood was previously employed by Aurora Algae, where his work focused on the commercialization of valu-able technologies from algae, and fostered partnerships with prominent companies in

the health and nutraceuticals industries. He previously held positions at Martek Biosci-ences (now DSM Nutrition), ConAgra foods and Monsanto Co.

Terex Environmental Equipment announces new products

Terex Environmental Equipment is launching two new products this yearthe TDS 820 slow speed shredder and the TTS 620 trommel screen. The TDS 820 is a ver-satile, slow-speed machine for shredding all types of material utilizing the same shred-ding tool. The TTS 620 features an effi cient engine and hydraulic drive system com-bined with advanced material processing control. It is suited for screening compost, biomass, soil, gravel and waste.

Fecon adds team member Fecon Inc. has

appointed Joe Cox as northeast regional manager. Cox has experience in busi-ness development and equipment sales within the mulching industry. He most recently managed facilities in the southwest

U.S. that provide right-of-way land clearing and related oilfi eld services. Coxs territory includes Pennsylvania, New York, New Jersey, Delaware, Maryland, Connecticut, Rhode Island, Massachusetts, Vermont, New Hampshire and Maine. The previous northeast regional manager, Brian Kile, has accepted the position of western regional manager.

Algae.Tec executes agreement with CFS

Algae.Tec Ltd. has executed an agree-ment with China Finance Strategies Invest-ment Holdings Ltd. under which Algae.Tec will issue an initial $500,000 convert-ible bond. Subject to the achievements of certain milestones, the company will issue $5 million in conditional options to CFS, which will introduce Algae.Tecs technology to the greater China region.

Esker acquires TermSync Esker has announced the acquisition

of TermSync, a cloud-based accounts re-ceivable platform. TermSync develops and markets an innovative, collaborative portal enabling businesses to modernize their ac-counts receivable processes.

Astwood

Cox


UK GIB adds CFO, nonexecutive director

The U.K. Green Investment Bank has appointed Peter Knott as chief fi nancial offi cer and Laurence Mulliez as a new nonex-ecutive director. Knott previously served as chief risk offi cer at GIB. He will join Chief Executive Shaun Kingsbury as the only other executive director on GIBs independent board. GIB is recruiting for a new chief risk offi cer. Mulliez is an experienced executive with experience in renewable energy. She will also sit on GIBs investment committee.

Bioenergy pilot under development in UAE

Based on research at the Masdar Institute of Science and Technology, the Sustainable Bioenergy Research Consor-tium recently announced it is awarding a

contract to International Mechanical & Electrical Co. LLC to construct a bioenergy pilot project to use desert land irrigated by seawater to produce bioenergy and food. The project, located in the United Arab Emirates, is expected to be operational by late summer. Masdar Institute, together with Etihad Airways, the Boeing Co., and Honeywell UPO, founded the consortium. Safran and GE have since joined.

Biogas upgrading facility opens in England

A biogas plant with a gas upgrading facility developed by EnviTec Biogas AG is now on the grid near Ipsden, Oxford-shire, England. The facility has an initial capacity of 350 cubic meters, along with a 360-kW combined-heat-and-power plant. The Icknield Gas Ltd. project was commis-sioned in December and provides green energy to the existing grid of Southern Gas Networks. The facility operates using a combination of pig slurry, farm byproducts and energy crops and is expected to deliver energy value of approximately 35 million kWh of biomethane.

Vinci announces contract Vinci Environment U.K., a subsidiary

of Vinci Construction U.K. and Vinci En-vironnement, won a contract from Amey-Cespa to build an energy-from-waste unit as part of a planned multiprocess waste center in the County of North Yorkshire and city of York. Construction of the Allerton plant was scheduled to begin in February. The facility is expected to be fully operational in 2018. Once complete, the project will mechanically sort residual household waste. Some of the waste will be anaerobically digested, while the remainder will be incinerated to generate 25 MW of electricity for export to the grid.

EBRD funds biomass boiler The European Bank for Reconstruc-

tion and Development is supporting the construction of a biomass boiler plant in Prijedor, a municipality in the northwest region of Bosnia and Herzegovina, through a 7 million euros ($7.83 million) loan. The facility, which will be fueled by wood chips, will also be supported by a grant of up to 2 million euros from the Swedish Interna-tional Development Cooperation Agency.

BUSINESS BRIEFS

Knott Mulliez

SHARE YOUR INDUSTRY NEWS: To be included in the Business Briefs, send information (including photos and logos, if available) to Business Briefs, Biomass Magazine, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. You may also email information to [email protected]. Please include your name and telephone number in all correspon-dence.

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Babcock & Wilcox announces contract

The Babcock & Wilcox Co.s Den-mark-based subsidiary Babcock & Wilcox Vlund A/S has been awarded contracts by Margam Green Energy Ltd. for more than $200 million to engineer, procure and operate a 40-MW, state-of-the-art biomass plant at Margam, Wales. B&W Vlunds consortium partner Interserve Construction will build the plant. The facility will be designed to burn 335,000 tons of wood waste annually and will be capable of using municipal waste as a fuel source in the future. Engineering of the project is underway, with construction expected to be complete by the second quarter of 2017.

Active Energy Group appoints nonexecutive chairman

Active Energy Group plc has ap-pointed Frank Lewis as nonexecutive chair-man of the group. He has served as nonex-ecutive chairman and director for a number of international fi rms with interests across Europe, the Far East, Middle East and Africa.

Amyris launches Pharm platform

Amyris Inc. has announced plans to launch its Pharm (microPharm) discovery and production platform. The Pharm platform provides the phar-maceutical industry with an integrated discovery and production process for therapeutic compounds for which a natural source is scarce or unavailable, or for which chemical synthesis is not cost-effective.

New biomass project planned in Nova Scotia

The government of Nova Scotia has approved the next phase of seven new community feed-in tariff (Comfi t) proj-ects to produce local, renewable electric-

ity, and announced plans to pause and evaluate the Comfi t program to ensure it continues to be community-based, inno-vative and contributing to the provinces future energy needs. Six of the seven new projects are bioenergy projects, includ-ing a 3.2-MW project in Bridgewater, a 0.6-MW project in Hardwood, a 0.5-MW project in Tracadie, a 1.5-MW project in Bible Hill, a 0.5-MW project in Port Hood and a 0.5-MW project in Antigonish.

Microvi announces investment Microvi Biotechnologies Inc. has

announced SKion GmbH, the investment fi rm of German entrepreneur Susanne Klatten, has acquired a minority stake in the company. The Series B funding will help accelerate Microvis growth as it continues commercial projects utilizing its innovative solutions in the water, waste-water and biobased products industries.

BioAmber announces new CFOBioAmber Inc. has announced

Andrew Ashworth, chief fi nancial offi cer, retired Dec. 31. Francois Laurin has been hired to succeed him as CFO. Laurin most recently served as CFO of Alderon Iron Ore Corp. He also previously served as CFO of Consolidated Thompson Iron Mines and as CFO of Transat A.T. In addition, he has held senior fi nancial positions at Caisse de Depot du Quebec, Bombardier and Teleglobe. Ashworth will continue in an advisory role to the company in the fi rst half of this year to ensure a smooth transition. Board mem-ber Denis Lucquin also resigned, effective Dec. 31.

Lewis

Ashworth Laurin

BUSINESS BRIEFS


Dyadic adds board chairman Dyadic Inter-

national Inc. has appointed Michael Tarnok chairman of the board of direc-tors. He will also continue to serve on the companys audit and compensation committees. He is the current chairman and former interim CEO of Keryx Biopharmaceuticals Inc. and a former senior executive of manu-facturing and fi nance at Pfi zer.

Green Biologics adds board member

Green Biologics Ltd. has appointed James J. Hohman to a nonexecutive director position on its board of direc-tors. Hohman was formerly president of Omnova Solu-tions performance chemicals business unit and a corporate senior vice president of Omnova. He has also held general management, business and marketing management positions with BP Chemicals and BFGoodrich.

EBA expands scope, announces new secretary general

The European Biogas Association has announced it will expand its scope to include biomethane manufactured through sustainable biomass gasifi cation. The ABA also recently appointed Agata Przdka as its new secretary general. She previously served as technical advisor.

Vecoplan adds team memberBob Gilmore

has been appointed managing director and chief sales offi -cer at Vecoplan LLC. He joins Len Beusse, managing director and chief operating

offi cer, on the strategic planning team charged with positioning Vecoplan for sustainable long-term growth, as well as day-to-day management of the company. Gilmores responsibilities also include the supervision of all internal and external sales staff, and overseeing the expansion of Vecoplan markets.

ABO adds board members

The Algae Biomass Organization has announced Al Darzins, research and development director at Gas Technology Institute, and James Levine, CEO of Sap-phire Energy, have been appointed to its board of directors.

NFF announces business challenge winners

The National Forest Foundation has announced the winners of the 2014 Bar-rett Foundation Business Concept Chal-lenge. The fi rst place winner, Charborn, seeks to unlock the potential of biochar as a soil amendment for the agricultural industries. The fi rst runner-up, Biomass to Biomethanol Through Forest Remedia-tion, seeks to utilize low-value woody bio-mass from forest thinning and lumber mill operations to create methanol and liquid carbon dioxide for sale into the market. The competition provides a $75,000 cash award to the winning submission and a $25,000 cash award to the fi rst runner-up.

Reverdia announces patents Patents have been granted to DSM in

Europe, Japan and Canada for its innova-tive yeast-based succinic acid production technology, with exclusive rights awarded to Reverdia. The new patents cover tech-nology to make economically viable and sustainable biobased succinic acid.

Tarnok

Hohman

Gilmore

Darzins Levine

BUSINESS BRIEFS

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Thunder Bay Generating Station, Ontario Power Generation

Location Thunder Bay, Ontario, CanadaEngineer/builder N/APrimary fuel Advanced biomass pelletsBoiler type Suspension fi re systemNameplate capacity 150 MWCombined heat and power NoGovernment incentives 10-year PPAIPP or utility Provincial utilityGroundbreaking date 2nd half 2014Start-up date February 2015Previously fi red by coal, one of the facility's two units now operates as a peaking facility on 100 percent biomass.

Conifex Power, Mackenzie Generating Station

Location Mackenzie, British Columbia, CanadaEngineer/builder Spectrum Energy/Clean Energy/JV DriverPrimary fuel Hog fuel, shavings, forest residuesBoiler type ABB ICFB BoilerNameplate capacity 36 MWCombined heat and power YesGovernment incentives NoneIPP or utility IPP contracting to BC HydroGroundbreaking date November 2013Start-up date Anticipating Q1 2015Repairs have been completed following a delayed startup this past fall, and commissioning was underway in mid-March.

Merritt Green Energy Project

Location Merritt, British Columbia, CanadaEngineer/builder DalkiaPrimary fuel Forest and sawmill waste/pine beetle killBoiler type Double drum FSE Energy boilerNameplate capacity 40 MWCombined heat and power NoGovernment incentives None

IPP or utility IPPGroundbreaking date 2014Start-up date 2016A majority of the earthwork is complete and main foundations are under construction.

The strength of the biomass fuel and power industries was demonstrated by robust construction activity that took place during Q1 2015. Projects of all sizes advanced, many of which are now operational.

Continued global demand for fuel pellets is keeping development of pellet facilities buoyed up, with large concentrations of new plants being built in Canada and in the U.S. Southeast. North America isnt the only region responding the needs of this growing market however. This is demonstrated in Q1 BCU with a profi le of TANAC S.A.s new facility in Brazil, and BCU is tracking a number of other projects in South America, Southeast Asia and Africa.

While the major driver of pellet demand is European biomass power facilities, a large number of power plants under construction are taking advantage of local waste streams. Many are producing power from environmental remediation waste, such as invasive plant species in Hawaii, and in British Columbia, beetle-killed pine removed for wildfi re mitigation and wildlands enhancement.

Dong Energy continues to lead Denmarks quest to generate 100 percent of its electricity from renewables by 2050. There, a number of projects are converting to biomass, including the Skrbk Power Station, which will provide district heat and electricity.

Growth in the biogas sector remains very strong and diverse. Q1 BCUs profi led biogas projects demonstrate biogass versatility, with end

uses ranging from electrical generation and CHP to pipeline gas and compressed natural gas.

Consumer confi dence is high, the worlds economies are healthy, and winter is losing its grip on the northern latitudes. BCU expects to refl ect even more activity next quarter.

Biomass CONSTRUCTION UPDATEBiomass Makes Global Strides by Steve Stucko

ProjectComplete

Biomass Power Pellets Biogas Thermal Advanced Biofuel

CHIP ENERGY INC.PHOTO: CHIP ENERGY INC.

MERRITT GREEN ENERGYPHOTO: COURTESY OF DALKIA


Green Energy Team LLC

Location Koloa, Kauai, HawaiiEngineer/builder Standardkessel Baumgarte Group (SKG)Primary fuel Eucalyptus and albizia Boiler type Pusher-type grate with natural circulation steam generatorNameplate capacity 7.2 MWCombined heat and power Yes

Government incentives USDA loan guarantee, renewable energy tax credits, carbon credits to KIUC IPP or utility IPP, PPA with Kauai Island Utility Cooperative Groundbreaking date 2013Start-up date 2015Plant is black start capable (can be restarted without outside power), which is vital for the island during hurricanes.

CONSTRUCTION UPDATEFort St. James Green Energy LP

Location Fort Saint James, British Columbia, CanadaEngineer/builder DalkiaPrimary fuel Forest and sawmill waste, pine beetle killBoiler type Double drum FSE Energy boilerNameplate capacity 40 MWCombined heat and power NoGovernment incentives NoneIPP or utility IPPGroundbreaking date 2014Start-up date 2016Steel erection is underway and the main building envelope is being closed in. FORT ST. JOHN GREEN ENERGY

PHOTO: COURTESY OF DALKIA

ProjectComplete

GREEN ENERGY TEAM PHOTO: COURTESY OF KAUAI ISLAND UTILITY COOPERATIVE

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Rentech Inc. Wawa

Location Wawa, Ontario, CanadaDesign/builder AgriRecycle/EADExport port Port of OntarioExport location United Kingdom (Drax)Pellet grade Industrial premiumCapacity 450,000 metric tonsFeedstock Crown forest woodGroundbreaking date 2014Start-up date Q2 2015The plant is nearing completion. Commissioning and startup are expected in Q2.

Chip Energy Inc.

Location Goodfi eld, IllinoisDesign/builder Chip EnergyExport port N/AExport location N/APellet grade Pellets, briquettes and logsAnnual capacity 36,500 metric tonsFeedstock Waste wood, energy crops, agricultural residueGroundbreaking date 2013Start-up date TBDThe facility is designed to fi ll the need for distributed depot-style biomass collection and processing.

ZILKHA BIOMASS SELMAPHOTO: ZILKHA BIOMASS ENERGY

Zilkha Biomass Selma

Location Selma, AlabamaDesign/builder Zilkha Biomass FuelsExport port Port of MobileExport location EuropeFeedstock Mostly softwood, some hardwoodPellet grade Zilkha Black PelletsAnnual capacity 275,000 metric tonsGroundbreaking date April 2014Start-up date Q1 2015Zilkha believes the facility is the fi rst commercial-scale black pellet production facility in the world.

ProjectComplete

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Conceptual and Preliminary Designs for Advanced Biofuels

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Negotiations Coordination of Permitting Strategy and Assistance for Raising Equity Assistance in Obtaining Debt Financing Economic Impact Analysis

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German Pellets Louisiana

Location Urania, LouisianaDesign/builder Designed by Elektro Fischer USA LP Export port Port ArthurExport location EuropePellet grade UtilityAnnual capacity 1.1 million tonsFeedstock SoftwoodGroundbreaking date 2014Start-up date 2015The facility was nearly complete in mid-March.

TANAC S.A. - Rio Grande

Location Rio Grande, Brazil

Design/builder

Export port Rio GrandeExport location U.K.Pellet grade Industrial premiumAnnual capacity 400,000 metric tonsFeedstock Acacia Mearnsii woodGroundbreaking date 2014Start-up date 2016A 1,400-meter conveyor connects this facility directly to the port's ship-loading facilities.

Allendale White Pellet Plant

Location Allendale, South CarolinaDesign/builder Thunderbolt Biomass Inc.Export port Port of Savannah and Brunswick

Export location

Pellet grade Industrial premiumCapacity 60,000 metric tonsFeedstock Yellow pineGroundbreaking date May 2014Start-up date June 2015The building is now 50 percent complete. The dryer, baghouse and pellet presses are all on site.

CONSTRUCTION UPDATE

ALLENDALE WHITE PELLET PLANTPHOTO: COURTESY OF ALLENDALE WHITE PELLET PLANT

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Noblehurst Green Energy, Noblehurst Farms Inc.

Location Linwood, New YorkEngineer/builder EnviTec Biogas

Substrate(s) Dairy manure, FOG, grocery waste, dairy effl uentDigester type Complete mix followed by a plug-fl ow system

CHP YesBiogas production capacity 36.8 cfm

Biogas end use ElectricityPower capacity 0.44 MW

Groundbreaking date

Start-up date Q1 2015Digester is operational. Tie-in to National Grid remains to be completed.

Roeslein Alternative Energy of Missouri LLC, Roeslein Alternative Energy LLC

Location Northern MissouriEngineer/builder Roeslein Alternative Energy LLCSubstrate(s) Hog manureDigester type/technology Lagoon style, fl oating impermeable coverGas cleaning technology Molecular sieve/PSA

Biogas production capacity 2 million-plus MMBtu/year

Biogas end use CNG and LNG

Power capacity N/AGroundbreaking date May 2014Start-up date Phase one: June 2015The construction focus is shifting from covering lagoons to completion of the fi rst of nine gas upgrade facilities.

Lowell Energy Anaerobic Digester, Sustainable Partners

Location Lowell, MichiganEngineer/builder enCO2 LLC/Rockford ConstructionSubstrate(s) FOG, manure, food processing wasteDigester type/technology Fixed bedGas cleaning technology Dehumidifi cation, and biological desulphurization

Biogas production capacity 192 CFM

Biogas end use Electricity

Power capacity 0.8 MWGroundbreaking date June 2014Start-up date February 2015The project is complete and delivering electricity to Lowell Light and Power.

Persigo Wastewater Treatment Plant, City of Grand Junction

Location Grand Junction, ColoradoEngineer/builder BioCNG LLCSubstrate(s) Sewage Digester type/technology Continuous fl owGas cleaning technology BioCNG LLC

Biogas production capacity 83.3 CFM

Biogas end use Compressed natural gas

Power capacity N/AGroundbreaking date December 2014Start-up date April 2015BioCNG-100 skid and hydrogen sulfi de removal vessels are on site. Half of the underground piping has been installed.

ProjectComplete

Formerly Fenwal Explosion Protection


CONSTRUCTION UPDATESkrbk Power Station, Dong Energy

Location Fredericia, DenmarkEngineer/builder B&W VollundPrimary fuel Wood chipsBoiler type B&W Vollund fl uidized bedNameplate thermal capacity 280 MWth

Heat enduse District heat

Government incentives/grants N/A

Groundbreaking date September 2014Start-up date Early 2017The power station's quay has been renovated. Explosives were utilized to remove obsolete ash silos.

Lanzatech Freedom Pines Biore nery LLC

Location Soperton, GeorgiaDesign/builder LanzatechProcess technology Proprietary thermochemical pathway

Biofuel/biochemical product(s) Ethanol and possibly butadiene, jet fuel

Feedstock Woody biomass

Production capacity 2 MMgy

Type of RINs D3

Coproducts

Groundbreaking date 2014

Start-up date 2015

The plant is using a Concord Blue gasifi er to produce syngas that will be fermented to produce ethanol.

East Kansas Agri-Energy LLC - Renewable Diesel Facility

Location Garnett, KansasDesign/builder WB ServicesProcess technology Capable of both enzymatic and chemical processing

Biofuel/biochemical product(s) Renewable diesel

Feedstock Distillers corn oil


Type of RINs D4

Coproducts NaphthaGroundbreaking date 2014

Start-up date Q4 2015

Site preperation is complete.

Dupont Cellulosic Ethanol LLC - Nevada

Location Nevada, IowaDesign/builder DuPontProcess technology Dupont proprietary process

Biofuel/biochemical product(s) Ethanol

Feedstock Corn stover


Type of RINs D3

Coproducts

Groundbreaking date November 2012

Start-up date 2015

Local news reports indicate that a shortage of millwrights and pipefi tters delayed completion.

No matter what youre processing chemicals, food, pharmaceuticals, biomass, wood products if it produces dusts or powders, theres a high probability you have an explosion risk. All it takes to interrupt your plant productivity is a combustible material, oxygen and an ignition source. For more than six decades, IEP Technologies has provided the right explosion protection solution for every type of process application. From cyclone separators and dust collectors to milling equipment and dryers. We can analyze your challenge, design a protection system and surround you with 24/7 service and support. Protecting your plant starts with knowing your explosion risk.

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P R O T E C T I N G T H E W O R L D S P R O C E S S E S A G A I N S T E X P L O S I O N


PowerNews

Proctor & Gamble Co. and Constellation Energy have announced plans to develop a 50 MW biomass plant that will provide all of the steam needs for P&Gs largest U.S. facility, which is located in Albany, Georgia. P&G will purchase the steam for its Bounty paper towels and Charmin toilet tissue manufac-turing facility under a 20-year steam supply agreement with Constellation. The facility is also under contract to sell 42 MW of capac-ity to Georgia Power under a 20-year power purchase agreement.

Constellation will build, own and operate the $200 million-plus cogeneration plant under the name Albany Green Energy LLC.

P&Gs Albany facility has used an onsite biomass boiler to generate approximately 30 percent of the facilitys energy use for more than three decades. The new bioenergy facility will replace that aging boiler with Valmets circulating fl uidized bed boiler technology. It is expected to provide 60 to 70 percent of the required energy for P&Gs manufacturing facility. Natural gas will be needed to provide some high-temperature heating above what the steam can provide.

Site work began in late 2014. The project is expected to be complete in June 2017.

P&G, Constellation Energy plan 50-MW biomass project

The Federal Energy Regulatory Commissions Offi ce of Energy Projects recently released electricity capacity addition data for 2014. The December edition of its Energy Infrastructure Update shows the U.S. added fi ve biomass generating units with a combined capacity of 23 MW dur-ing the fi nal month of the year. Over the course of the entire year, the U.S. added 58 biomass generating units with a combined capacity of 254 MW. In 2013, 142 biomass units were added with a combined 858 MW of capacity.

Overall, the U.S. added a total of 490 new energy generation units in 2014 with a combined capacity of 15,384 MW. More than half of that new capacity came from renewable energy sources.

As of the close of 2014, the U.S. had 16.10 GW of installed biomass capacity, equating to approximately 1.38 percent of all U.S. power generation capacity. Of the nonhydro renewables, only wind has a larger share of total capacity, with 64.77 GW, or 5.54 percent.

FERC releases 2014 capacity data

CoalNo. Units:

1Installed Capacity*:

106

2014 electricity capacity additions *MWSOURCE: FEDERAL ENERGY REGULATORY COMMISSION

Natural GasNo. Units:


7,485

OilNo. Units:


47

WaterNo. Units:


158

WindNo. Units:


4,080

BiomassNo. Units:


254

Geothermal StreamNo. Units:


32

SolarNo. Units:


3,139

Waste HeatNo. Units:


5

OtherNo. Units:


78

No. Units: 490Installed Capacity*: 15,384


POWER NEWS

The European Commission announced it has opened an in-depth investigation to assess whether the U.K.s plans to support the biomass conversion of the coal-fi red Lynemouth power plant are in line with Eu-ropean Union state aid rules. The U.K. plans to support the conversion project through a Contract for Difference (CfD), which fi xes a certain sales price, or strike price, for the electricity.

The Lynemouth project is one of eight renewable energy projects selected for the fi rst CfDs under the U.K.s electric market reforms. The other seven projects include a Drax biomass unit conversion and the dedicated biomass with combined-heat-and-power (CHP) Teesside project, along with fi ve offshore wind projects.

In July, the EC granted state aid ap-proval to the fi ve wind projects as part of a larger announcement from the commission that said the U.Ks CfD subsidy program is in line with EU state aid rules. In January, the EC approved the U.Ks plan to provide state aid to the proposed Teesside CHP plant, a 299-MW, biomass-fi red facility. The Drax and Lynemouth biomass conversion projects are still awaiting EC state aid approval.

EU investigates CfD for Lynemouth conversion A recent study completed by

University of California, Berkeley, researchers illustrates that biomass electricity production combined with carbon capture and sequestration (CCS) in the western U.S. could al-low power generators to store more carbon than they emit. As a result, the technology could make a critical contribution to an overall zero-carbon future.

The researchers said bioenergy with CCS (BECCS) could allow power generators to become carbon negative, even while retaining fossil-fi red plants with CCS technology. In fact, the carbon reduction could even offset emissions from fossil-based transportation fuels.

There are a lot of commercial uncertainties about carbon capture and sequestration technologies, said Daniel Sanchez, a graduate student in UC Berkeleys Energy and Re-sources Group. Nevertheless, were taking this technology and showing that in the western U.S., 35 years from now, BECCS doesnt merely let you reduce emissions by 80 percentthe current 2050 goal in

Californiabut gets the power system to negative carbon emissions. You store more carbon than you create.

Researchers find potential combining bioenergy with CCS

GOING CARBON NEGATIVE: This chart shows how different mixes of fuels could affect western U.S. carbon emissions in 2050.PHOTO: UNIVERSITY OF CALIFORNIA, BERKELEY


Following the U.S. EPAs Framework for Assessing Biogenic CO2 Emissions from Stationary Sources released in November, the volume of the debate about the wisdom of the framework and its accompanying memo to states has, not surprisingly, been turned up considerably.

Much has been made about the potential future effects of (correctly) counting biomass power as a zero-emissions power source. Will this cause all of the U.S. coal plants to convert to biomass? Will this lead to widespread forest devastation?

As all in the biomass industry are aware, the answer to these questions is a resounding no. The reason for this, beyond environmental concerns, politics, policy or regulatory barriersall of which are important forces on their ownis simple: economics. The feedstocks used for biomass in the U.S. are primarily wastes derived from other industries. Given the relatively low energy prices in the U.S., now and for the foreseeable future, no rational landowner would sell high-value fi ber like sawlogs or pulp for the prices commanded by using wood for energy.

The universe of fuels used in our plants is entirely a function of power prices. Energy has and always will be the least attractive market for biomass.

In late March, I spoke at the EPAs Scientifi c Advi-sory Board hearing on biogenic emissions to deliver this message. The comments submitted by the Biomass Power Association encouraged the EPA to classify biomass as zero carbon, once and for all.

One way that we can demonstrate the role of economics is by looking at two of the biggest biomass states, California and Maine. Historically, the California industry heavily relied upon forest-derived biomass. As the California forest products industry shrank, plants were increasingly forced to source their fuel elsewhere. Today, Californias biomass sector remains strong, relying upon forest residues for only 13 percent of its fuel, with the remainder from a wide variety of sources.

In contrast is Maine, which ranks fi fth in the U.S. for the production of biomass power. Biomass is respon-sible for 25 percent of Maines overall power supply and represents 60 percent of the states renewable portfolio. Wood accounts for almost one-third of New Englands entire renewable supply, with Maine supplying a signifi cant amount to the region.

Maines forest products industry is healthy and sustainable. As the largest privately owned, contiguous working forest in the U.S., it is a model for what can happenboth for rural communities and for the health of forestswhen low-value wood is utilized for power. Pulpwood represents 56 percent of the 459 million cubic feet that was harvested from Maines woods in 2011; saw-logs make up 23 percent; biomass for electricity accounts for 18 percent; and pellets and fi rewood, 2 percent. All of these uses coexist, and each contributes to the economic health of the forest, allowing landowners to manage forests as forests and have access to markets for all parts of the tree. It is precisely because of these markets that Maine boasts a 97 percent regeneration rate and twice the standing wood volume today than it did in 1950.

Regardless of region, all biomass plants throughout the country share the same basic principle: They cannot compete with higher-value uses like sawlogs and mer-chantable pulp. As a result, even if EPA were to conclude that all biomass is carbon neutral, the fear that biomass electricity would somehow undertake major harvests and compete with the value of pulp and sawlogs is fantasy. Use of fuel is not a function of carbon accountingits a function of price.

Author: Bob CleavesPresident and CEO, Biomass Power Association

[email protected]

Proving Biomass Power EconomicsBY BOB CLEAVES

POWER


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POWER

Resources made available by the International Trade Administration equip companies with the tools, financing and knowhow required to increase renewable exports.

BY ANNA SIMET

Greg Smith is a guy U.S. biomass equipment and project exporters want on their side. When he founded Global Energy Solutions Inc. in 1997, the company served as a manufacturers representative for multiple HVAC and boiler system product lines. Over the course of two decades, Smith developed what he describes as a niche interest in re-mote and rural locations, and views his role as a collaborative facilitator who works with project owners and community leaders, legislators, and citizen groups to address unusual energy and power concerns.

Today, GES is a renewable energy program management fi rm that works closely with equipment manufacturers such as Hurst Boiler, specializing in biomass energy. And about 90 percent of the companys business is exports, according to Smith. Having a keen interest in these kinds of projects isnt the driving force behind GESs over-the-border endeavors, however. First and foremost, its support of biomass energy in general, he says. Except for the exchange rates, Canada is a really good place [for projects] because they sup-port biomass very heavily. They believe in it, they understand it, and thats not prevalent in the U.S.

Not surprisingly, Smith, who recently visited the U.K., names the coun-try as another very strong export location. His company, along with Hurst Boiler, is considering opening an offi ce overseas, he says. And perhaps not as obvious, opportunity in Africa is devel-oping, Smith points out, largely due to the U.S.s Power Africa initiative. The ul-timate goal of the program is to increase the number of people with access to power in sub-Saharan Africa by adding more than 30,000 MW of clean, more-effi cient electricity generation.

Also active is Mexico, where Smith says Hurst has done a lot of business, particularly because of the abundance of spent agave material that makes an ideal boiler fuel. And, in recent years, the country has become much easier to do business within, due to a combination of government renewable energy goals and the opening up of its previously restricted electricity market.

Whether it is Canada, the U.K., Africa or Mexico, Smith says he can al-

In 2014, the Ex-Im Bank fi nanced $22 million in exports related to energy generation by other renewable technologies including hydroelectric geothermal, and biomass.

EMPOWERING EXPORTERS


POWER

OVERSEAS OPERATION: About 90 percent of Global Energy Solutions' business is exports, such as this project in the Ukraine with Hurst Boiler.PHOTO: HURST BOILER & WELDING


ways count on the U.S. Department of Com-merces International Trade Administration renewable energy division to assist.

Tooling UpEstablished in 2010 when President

Barack Obama announced the National Ex-port Initiative, which aimed to double exports within fi ve years, the Renewable Energy and Energy Effi ciency Export Initiative is over-seen by the Offi ce of Energy and Environ-mental Industries, and largely serves to make life easier for exporters of renewable U.S. goods and services. Theyll go to bat for ustheyre very helpful, Smith says. As an exam-ple, sometimes well go to different countries and the requirements might be different on the certifi cation of the equipment, say Euro-pean Conformity (CE) in the U.K. or EU, or the British standard that is in play in some ar-eas. We just did a project in New Zealand and they had a mix of British standard and ASME, which is very odd. Meeting regulations isnt the issueits trying to decipher them, it can take

a lot of time. We look to the trade group to help us out, and they usually do.

While the department declined an inter-view with Biomass Magazine citing a reason of short staffi ng, Cora Dickson, senior interna-tional trade specialist for the OEEI, says that

an updated version of Renewable Energy Top Markets Studya market assessment tool for U.S. exporters that was released in Feb-ruary 2014 and included analysis for ethanol and wood pellet exportswas expected to be available in May. This time around, according

10. PHILIPPINES

8. PERU

9. BELGIUM

7. NIGERIA

6. UNITED KINGDOM

5. MEXICO

4. CHILE 3. BRAZIL

2. CHINA1. CANADA

MARKET RANKINGS FOR TOTAL U.S. RENEWABLE ENERGY EXPORTS THROUGH 2015SOURCE: ITA TOP MARKETS STUDYILLUSTRATION: BBI INTERNATIONAL

POWER

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to Dickson, it will be split into two different reportsone for electricity and one for fuels.

And another new tool for exporters is currently in developmentan interactive app that will serve as a mobile business direc-tory for U.S. clean energy exports. The app will highlight sustainability improvements at U.S. diplomatic missions and provide poten-tial business partners around the globe with a searchable interface to fi nd information on U.S. technology and service providers. Bio-fuels and renewable energy equipment are among goods and services the app will show-case.

Often working closely with the OEEI is another resource renewable energy exporters like Smith and Hurst might take advantage ofthe Import-Export Bank of the U.S. The offi cial export credit agency of the U.S. government, Ex-Im fi nances the export of U.S.-made goods and services with a special focus on renewable energy, including bio-mass, wind, solar and hydro.

Ex-Im stands ready to help U.S. export-

ers, says Craig OConnor, director of Ex-Ims Offi ce of Renewable Energy & Environ-mental Exports. We provide fi nancing when fi nancing otherwise wouldnt be available on economically benefi cial terms.

Besides direct loans, Ex-Im also pro-vides loan guarantees, export credit insur-ance, and, particularly helpful to small com-panies needing cash to build their product, working capital. If youre a small business

needing that working capital and your local bank is nervous because the source of pay-ment is an overseas sales contract, Ex-Im can give the bank a guarantee to make a loan to the U.S. exporter to build out the system for export, OConnor says.

While Ex-Im more commonly aids U.S. exporters, it also serves to provide assistance to international buyers of U.S. goods and ser-vices. In that case, on top of assurance that

POWER

BON VOYAGE BOILER: A Hurst unit is transported to a wharf to be shipped to New Zealand.PHOTO: HURST BOILER & WELDING

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U.S. technology providers have been identi-fi edsuch as harvesting equipment and boil-ersbuyer creditworthiness confi rmation, and identifi cation of the type of fi nancing desired, location is an immediate detail Ex-Im will evaluate. We do have a country limitation schedule, OConnor says. This shows where were open, and where were not.

On biomass power projects specifi cally, OConnor says the challenge is that they tend to be small. An [effective] approach would be to structure the project like you would the sale of machinery, he advises. Dont look at it as project fi nance. The sponsor might say, We want to repay the loan based on sales of electricity, but that becomes tough, particu-larly to prove that they have a supply of bio-mass, which becomes diffi cult to do over long periods. Secondly, with smaller-scale projects, there are also due-diligence costs that can also be incurredfi nancial due diligence, legal due

diligence, Ex-Im bank will hire its own engi-neer to tell us about project specifi csand these transaction costs work against these smaller-scale projects.

If the international buyer is creditwor-thy and is willing to take on the project risk but could use fi nancing for the equipment to get things going, OConnor recommends structuring it this wayas a trade fi nance or corporate fi nance loan verses a project fi nance loan. Its probably more advantageous, he explains.

On renewable exports in general, a cur-rent challenge is the strengthening U.S. dollar, OConnor says, and thats something Smith can attest toas of mid-December, the U.S. dollar index was trading just under 89 cents, the highest level since March 2009. It helps most Americans, but it doesnt help export-ers, Smith says. When its strong against the euro or British pound, it means our product

is a lot more expensive to buy. In Canada, some projects there may get stopped or can-celled because a year ago, Canadian dollar was on par or $1.05, now its 77 cents. You want the dollar to do well, but when it costs more to buy a U.S. product than from some-where else, thats a detriment.

It does get tougher, OConnor reiter-ates. If youre an international buyer and all of a sudden you have to spend more to buy the machine you want from the U.S., that exporter may lose the sale or face lowering the price.

While Ex-Ims biomass energy fi nanc-ing is quite small in comparison to wind or solar, OConnor points out that the bank is demand-driven and available. We dont say, heres your line of credit for the year; we stand ready to help, whether its the export of wood pellets or machinery. If you look at the trade numbers in terms of renewables, solar has been the biggest followed by wind, and biomass tends to be smaller. In terms of machinery, Im not sure that we export more than $50 million a year, but wed love to do more, we defi nitely would.

Smith highlights the benefi ts export-ing has on the U.S. economyin particular, jobs. Ive heard some different metrics as to how increasing exports as the fastest way to increase [jobs]dealing with existing com-panies and increasing their outputand I think thats defi nitely true, he says. If you look at an old-line company like Hurst, they never used to export at all. They began as a regional manufacturer when they started, grew substantially, and is one of the last twenty-some boiler companies left in the U.S. as far as industrial and commercial, and really close to 50 percent or more exports.

A lot of places, most places we've been, love U.S. products, Smith adds. They may say they dont like certain things about our country, but our products are tried and true and have a tremendous reputation, and that helps greatly when were doing business overseas.

Author: Anna SimetManaging Editor, Biomass Magazine

[email protected]

POWER

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APRIL 2015 | BIOMASS MAGAZINE 29 iowaeconomicdevelopment.com iowaeconomicdevelopment businessiowablog.iowaeconomicdevelopment.com

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PelletNews

Ligenetics Inc. and Bear Mountain For-est Products Inc. have announced a merger. The combined company has the capacity to produce approximately 450,000 tons of wood pellets per year at facilities in Browns-ville, Oregon; Cascade Locks, Oregon; Sandpoint, Idaho; Glenville, West Virginia, and Kenbridge, Virginia.

Completing this merger marks the beginning of an exciting new chapter in our two companies history, making us the market leader in the residential wood pellet industry in the U.S., said Ken Tucker, CEO of Lignetics

The merger brings together several brands including Golden Fire, Lignetics, Bear Mountain, America's Best, Pres-to-Log, Dry Den, Cozy Den and EZ Equine.

We are excited about the merger with Lignetics and the ability to offer all of our customers a more diverse product offering, now from fi ve different plant locations, added Bob Sourek, CEO of Bear Mountain.

Tucker and Sourek also noted that the transaction will give the company the capital base to pursue expansion plans at their current facilities, as well as explore potential future add-on acquisitions.

Bear Mountain, Lignetics,announce merger

A study completed by U.S. Forest Service scientists and published by the Forest Services Southern Research Station fi nds that policies in the European Union and other parts of the world that require the use of renewable and low greenhouse gas-emitting energy are driving demand for wood pellets. This demand could provide new markets for U.S. timber exports, in-crease wood prices, and lead to increases in forestland area.

Karen Abt, a research economist with the SRS Forest Economics and Policy unit and lead author of the report, and her team used a computer model to simulate timber

markets in the coastal U.S. South through the year 2040. They modeled several scenar-ios, including a business-as-usual scenario that assumes a continuation of the current level of wood production, and an alterna-tive scenario that accounted for continued bioenergy demands for wood.

Results indicate the bioenergy scenario would result in increased pine nonsawtim-ber prices. While forest area decreased un-der the baseline business-as-usual scenario by 2040, the bioenergy scenario resulted in an increase in the forest base through 2040, despite the increased harvests.

EU pellet demand could increase US forestland

6 to 21

10 to 29

25 to 56

30 to 68

9 to 27

9 to 49

Forecast range of pellet, nonpellet wood input demands (million green short tons)SOURCE: U.S. FOREST SERVICE

70

60

50

40

30

20

10

0U.S. pellet production U.S. South pellet

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PELLET NEWS

PHI Group Inc. has signed an agree-ment with AG Materials LLC to establish a 200,000-metric-ton wood pellet plant in Live Oak, Florida. The joint venture will form Cornerstone Biomass Corp., which will be the entity handling the project. A separate plant is under development by Enerpellets Group in Hamilton County, Florida.

The Cornerstone pellet mills pro-posed location is on a 15-acre site adjacent to a lumber site in Suwannee County where Klausner Lumber One is constructing a sawmill. The pellet mills feedstock would come from the sites sawmill residue. PHI and AG Materials are also negotiating the purchase of a decommissioned pellet mill in Europe, and will be relocating that mill to Florida.

Enerpellets is entering the U.S. marketplace after developing two pellet plants in Portugal. Construction on the 250,000-metric-ton-per-year plant in Ham-ilton County is expected to begin this year, with pellet production beginning in 2016.

Dual pellet plants planned in Florida

Rentech Inc. subsidiary New England Wood Pellet has acquired the assets of Allegheny Pellet Corp. The acquisition expands NEWPs market position in the U.S. pellet heating sector.

Alleghenys wood pellet plant in Youngsville, Pennsylvania, began opera-tions in 1993. The facility processes residu-als from local sawmills into wood pellets for sale through big box stores, specialty retailers and bulk sales channels. According to Rentech, Allegheny will be fully inte-grated into NEWP and will operate as its fourth pellet plant.

NEWP intends to expand the plants annual production from approximately 36,000 tons under a four-day workweek to approximately 50,000 tons under a seven-day workweek. The additional production will help meet strong demand for pellets in Pennsylvania and New York.

NEWP acquired all of the assets of Allegheny for approximately $7 million in cash, and plans to invest approximately $2 million in environmental and safety improvements at the plant over the next two years.

NEWP acquires Allegheny Pellet

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The World Resources Institute recently published a working paper, Avoiding Bioenergy Competition for Food Crops and Land. We strongly disagree with its per-spective on the industrial wood pellet sector, as well as its inaccurate characterization of how the sector causes a net negative impact on global carbon emissions.

The authors do not appear to grasp the size and scope of the forest product industry in North America, where more than a billion acres of land are forested. Most are working forests that have been managed for generations and are in a continuous growth state so that in any given year, only a small portion is harvested. The strategy is to have a near-continuous supply of healthy, fully grown trees that provide large-diameter logs desirable to the sawmilling sector.

Most forest landowners can be considered tree farm-ers with crops that take 15 to 50 years to grow. Their primary product is sawlogs, the larger-diameter, lower sec-tions of a tree that are used to make lumber and generate the majority of landowners income. The middle part of the tree stem, the pulpwood or pellet feedstock portion, is much less valuable. The upper tree parts have little value and are most often left in the woods. Forestry business models would fail if the whole mature tree was sold into the pellet sector. Forest landowners will never sell sawlog-quality wood to pellet mills, which cannot afford to pay for feedstock at sawlog prices.

The WRI reports authors seem to have ignored the entire tree farming sector. Working forests are not old growth stands. They are managed to maintain or increase tree stock over time, and provide a sustainable source of materials to the forest products industries (including the pellet sector) and sustainable income to landowners.

Vast, forested lands in North America have produced raw material for the wood products industries for genera-tions. These are trees of all ages, from new trees replac-ing a recent harvest, to mature stands ready to provide benefi ts to the end-users with products including boards, cardboard, and toilet tissue. Those forests also provide benefi ts to the landowners, forestry workers and mill work-ers as income.

Assume the annual growth rate for a working forest is 2 tons per acre, and that the landowner is managing 1 mil-lion acres. Yearly, that land produces 2 million tons of new growth, or 5,480 tons daily. If the daily maximum allow-able cut is set at 4,500 tons and 50 percent of that harvest

was used for pellet production, that one landowner would supply enough wood fi ber to make about 430,000 tons of pellets annually.

Suppose those pellets are supplied to a power plant that has converted from coal to pellets. It would consume 1,180 tons of pellet fuel daily, instead of about 900 tons of coal.

Daily, the 5,480 tons of new growth on the 1 million acres of forestland will absorb more carbon than what is released in the combustion of those pellets. As long as the harvest and consumption of wood to make pellets do not exceed growth rates, no new net carbon is released. In fact, since the forester in our example set a signifi cant buf-fer between the actual growth rate and the harvest rate, the forest is a carbon sink.

The U.K.s Drax power station uses pellets in two of six lines. For the coal supply chain, from mining and extraction to delivery to Draxs power station, about 150 kilograms (kg) of CO2 per megawatt-hour of electricity (MWhe) is generated. Pellets produce about 45 kg/MWhe more CO2 in the supply chain.

But unlike coal, pellets sourced from forests that are managed so growth rates exceed harvest rates are carbon neutral in combustion. Each MWhe Drax generates from coal produces almost 1,000 kg of new atmospheric CO2. Including the supply chain carbon footprints of coal and pellets, that is nearly six times more CO2 from coal than from pellets for the same power output.

FutureMetrics does not think the WRI authors willful-ly ignored the facts about how wood pellets are made and used. The only explanation for their inaccurate analysis and conclusions on wood pellets is that they simply failed to do their research.

Signifi cant carbon benefi ts are provided to the power industry and all of the planets stakeholders by substituting some or all of the coal used at some of the worlds power plants with wood pellets produced from continuously renewing forests. This strategy should be an important component of any countrys policy to address climate change.

Author: William StraussPresident, Future Metrics

[email protected]

WRI Wrong On Wood PelletsBY WILLIAM STRAUSS

PELLET


LOW-CARBON COMMODITY: A cargo vessel is loaded with pellets at the Port of Brunswick in Georgia. This increasingly common occurrence in southeastern U.S. ports will continue as long as the industry proponents can continue to convey the unique value proposition of woody biomass-derived energy.PHOTO: TIM PORTZ, BBI INTERNATIONAL

PELLET


PELLET

Looks at 50

W ithin 60 days of fall 2014, the two trade associa-tions that represent North American pellet produc-ers active in the export market held their annual events, and both opened with bullish market forecasts for good reason. The wood pellet industry has shown quarterly production increases each quarter since 2011, and according to the Food and Agricultural Organiza-tion of the United Nations, 2013 global pellet production surpassed 22 million metric tons. Over half of this volume is traded internationally, with European countries consuming over 80 percent of current production. This strong period of industry growth is powered in part by the European Unions Re-newable Energy Directive, a binding framework engineered to move the re-gion to an energy mix that includes 20 percent renewables by 2020, as well as strong growth in the use of pellets as a residential heat source. Forecasting the industrys potential emerged as the unoffi cial theme of the fall conference swing, and while industry experts were split on predicted future volumes, there was a unanimous belief that the indus-trys enviable era of growth was likely to continue for the next several years.

Seth Walker, bioenergy economist from forest products information com-pany RISI, shared with attendees of both

events a market forecast that shows global pellet production climbing steadily to 50 million tons by 2024. In Miami, at the U.S. Industrial Pellet Associations Exporting Pellet conference, this prediction was met with skepticism, and, in some instances, was pointedly criticized. Matthew Rivers, director of fuel procurement at Drax, sug-gested the forecast offered future expec-tations without foundation. The dynam-ics between Walkers forecast and Riverss reaction to it aptly illustrates the paradox the pellet industry fi nds itself in. As the in-dustry continues to grow, public attention, scrutiny and misinformation campaigns create a drag on growth and stability that stakeholders in the sector would like to avoid.

While market forecasts in the sector will likely continue to generate passionate debates, producers, associations, project developers, investors and industry ven-dors are hungry for guidance on where the market is headed. There are currently over 3 million tons of new production capacity under construction, with at least that many tons in earlier stages of devel-opment. Whether this era of sustained growth will continue hinges largely on four factorscementing policy support for the use of biomass to achieve emis-sion reductions goals, establishing a single sustainability criteria applicable to all pel-let-buying countries, the emergence and establishment of new, non-European pel-

The pellet industry has grown each quarter for nearly five years. For this trend to continue, however, the sector must navigate numerous challenges, not least of which is its own success.BY TIM PORTZ

An Industry


PELLET

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let markets, and the continued growth of the global thermal market.

Policy BedrockThe period of growth the pellet indus-

try currently fi nds itself in can be traced back to 2007 when the European Commission launched its Renewable Energy Directive, an ambitious plan to grow the regions share of renewable energy to 20 percent of total energy production by 2020. The plan was central to the commissions long-term strat-egy to drive down the carbon intensity of energy production within European mem-ber states. Each member nation received a target and was left to develop its own policy mechanisms to achieve the goal. One of the more cost-effective approaches to reduce the carbon intensity of power production was to replace a percentage of the coal burned in power stations with biomass, predominantly with wood pellets.

Policymakers were attracted to this op-tion because it would deliver results at scale more quickly than wind, solar and geothermal

deployments. In the United Kingdom, policy-makers deployed the Renewables Obligation program, and later, a contracts-for-difference (CfD) mechanism that guaranteed a profi t to producers on power they produced in a low-carbon manner. In the Netherlands, a similar program known initially as the MEP and now the SDE-plus were introduced. These pro-grams, especially those in the U.K., attracted the attention of energy companies and gave rise to the fi rst coal plant conversions that introduced the fi rst real market demand for industrial pellets.

These conversion storiesin particular, the conversion at Drax Power Stationare widely known in the industry, and, almost singlehandedly, have generated millions of dollars in investments in pellet production as-sets, port and rail infrastructure.

As these power stations conversions have gained momentum and come on line, however, theyve also fomented signifi cant public scrutiny. Opposition to this approach has been voiced by nongovernmental envi-ronmental organizations warning of wide-

spread deforestation, as well as scientifi c and policy community members who question the notion that power produced by wood pel-lets achieves the goals it has set out to.

The science and economics of this strat-egy continue to draw scrutiny and investiga-tion. In February, the European Commission announced it would investigate the U.K.s plan to subsidize the conversion of a coal station in Lynemouth, Northumberland, England, to wood pellets, with an aim to ensure that the plan aligns with European Union state aid rules and does not result in the overcompen-sation of the plant nor distort global pellet prices and demand. On top of this scrutiny, the U.K. has established a program called the Levy Control Framework, which will limit the amount of the money the government can spend on the carbon reduction programs, in order to protect ratepayers against large in-creases in energy costs.

The pellet industry relies heavily upon policies that make the production of energy from lower-carbon inputs economically at-tractive. To continue on its march to 50 mil-


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lion tons, support for these subsidies must continue. Without them, a return to the low-cost fossil fuel incumbents is likely inevitable, and continued growth in the industry will sputter.

The Court Of Public OpinionPolicymakers response to constituents,

and, ultimately, their support of the industry, is contingent upon the general publics con-sensus of whether the investment in renew-able energy is both necessary and being done in a sustainable way. At the U.S. Industrial Pellet Associations Exporting Pellets confer-ence in Miami, Matthew Rivers from Drax said, The sector depends upon the license to operate. If the public does not believe in the value proposition of making electricity from wood pellets, it is only matter of time before policymakers no longer support the programs the industry relies upon.

This debate is regular, robust and ongo-ing. Blogs, exposs, newspaper articles and letters to the editor about the use of wood pellets to produce electric power are pub-

NEW MARKETS, NEW MARKETS: The Fibreco pellet terminal in Port of Vancouver, British Columbia, connects the provinces pellet production capacity with global markets. For the pellet industry to grow to forecasted volumes, the pellet markets in the Paci c Rim need to become more consistent and predictable.PHOTO: TIM PORTZ, BBI INTERNATIONAL


PELLET

lished on a daily basis in media outlets across the globe. Most recently, the Washington Post published an editorial that blasted the practice and urged the U.S. EPA to not make the same mistake as European power producers. The editorial generated rebuttals from virtually ev-ery corner of the forest products and biomass industries.

Critics of the industry suggest that con-tinued support of the policies that drive this industry will result in widespread deforesta-tion. Industry proponents counter that the biggest threat to forest is not more market opportunities for its fi ber, but fewer. I think the big thing that we need to be doing is edu-cating policymakers and others within the overall forest products industry that when you compare the sustainable wood fi ber usage in our industry to the available fi ber within the broader forest products sector it is absolutely, positively a drop in the bucket, says Seth Gin-ther, executive director of the U.S. Industrial

Pellet Association. We need to fi nd a better a way to better articulate that, and I think that is as critical to this industrys long-term success as anything else.

Proving SustainabilityTo satisfy the skeptical fraction of their

constituencies, the governments most aggres-sively supporting biomass-derived energy are introducing sustainability requirements that energy producers and their feedstock suppli-ers must comply with in order to receive sub-sidies. While the intentions of these measures are clear, the means of arriving at clear rules is not. Moreover, standards are currently being developed within multiple markets and may be different from one another, introducing bottlenecks and ineffi ciencies into the market-place. Finally, at the center of many sustain-ability programs is some level of certifi cation, which

april 2015 biomass magazine

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