2016 april biomass magazine

MOBILIZING, GLOBALIZINGBioenergy Industry Sizes Up World Resources, Markets

April 2016

READ:Why California Biodiesel Imports are RisingPAGE 62

AND:Domestic Biogas Tech ProvidersOn Competition AbroadPAGE 52

Upsides, Challenges of Pellet Commodi cationPAGE 34

www.biomassmagazine.com

PLUS:Foreign, Stateside Projects Make Headway

in Q2 Biomass Construction UpdatePAGE 14

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APRIL 2016 | BIOMASS MAGAZINE 3

INSIDE

APRIL 2016 | VOLUME 10 | ISSUE 4

Subscriptions Biomass Magazine is free of charge to everyone with the exception of a shipping and handling charge of $49.95 for anyone outside the United States. To subscribe, visit www.BiomassMagazine.com or you can send your mailing address and payment (checks made out to BBI International) to Biomass Magazine Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. You can also fax a subscription form to 701-746-5367. Back Issues & Reprints Select back issues are available for $3.95 each, plus shipping. Article reprints are also available for a fee. For more information, contact us at 701-746-8385 or [email protected]. Advertising Biomass Magazine provides a specifi c topic delivered to a highly targeted audience. We are committed to editorial excellence and high-quality print production. To fi nd out more about Biomass Magazine advertising opportunities, please contact us at 701-746-8385 or [email protected]. Letters to the Editor We welcome letters to the editor. Send to Biomass Magazine Letters to the Managing Editor, 308 2nd Ave. N., Suite 304, Grand Forks, ND 58203 or email to [email protected]. Please include your name, address and phone number. Letters may be edited for clarity and/or space.

POWER 24 NEWS

25 COLUMNBiomass Powers Momentum in MaineBy Bob Cleaves

26 FEATUREStaving Off a SunsetLow natural gas prices, expiration of power purchase agreements (PPA) and price guarantees of continuing PPA, are a few of the factors weighing heavily on Californias biomass power industry.By Bruce Dorminey

06 EDITORS NOTEA Delicate BalanceBy Tim Portz

08 BUSINESS BRIEFS

14 BIOMASS CONSTRUCTION UPDATE

24

ON THE COVER:Coillte, Ireland's semistateforestry organization, harvests material that will be hauled to and processed at one of its biomass hubs.

PHOTO: COILLTE

PELLETS32 NEWS

33 COLUMNRoadmap For Pellet Stoves During Cheap Oil, GasBy John Ackerly

34 FEATUREThe Upside of Commodity StatusWhile trade volumes of wood pellets pale in comparison to corn, wheat or coal, there are clear benefi ts in trade instruments common in larger commodity markets.By Tim Portz

FUEL YOUR SUCCESS WITH VERMEER. Vermeer has the products and expertise to assist you throughout the entire biomass supply chain n from field to facility. And its all backed by service and support from your local Vermeer dealer.

VISIT VERMEER.COM TO LEARN MORE.

Vermeer, the Vermeer logo and Equipped to Do More are trademarks of Vermeer Manufacturing Company in the U.S. and/or other countries. 2016 Vermeer Corporation. All Rights Reserved.

VISIT US AT THE INTERNATIONAL BIOMASS CONFERENCE, BOOTH #719

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BIOGAS50 NEWS

51 COLUMNFuture Remains Bright for Biogas EnergyBy Amanda Bilek

52 FEATUREGrowing the Local Home BaseStateside biogas technology suppliers are seeing success in the U.S., despite the experience their European counterparts possess.By Katie Fletcher

ADVANCED BIOFUELS & CHEMICALS 60 NEWS

61 COLUMNLeveling the Playing Field For US Biodiesel ProducersBy Anne Steckel

62 FEATUREImporting to Meet California DemandSeveral factors are leading to a substantial uptick in imports of advanced biofuels into Californiaspecifically biomass-based diesel.By Ron Kotrba

APRIL 2016 | VOLUME 10 | ISSUE 4

THERMAL42 NEWS

43 COLUMNStay of Clean Power Plan: Opportunity for Biomass Industry?By Joel Stronberg

44 CONTRIBUTIONWoody Biomass in the Inland NorthwestForest restoration projects in the Inland Northwest region could become a major supply of woody biomass for bioenergy, but economically only with the right support and incentives. By David Jackson

46 CONTRIBUTIONDelivering Renewable Energy From Irish ForestsIrelands well-established forest industry has much to offer to the countrys emerging bioenergy market.By Des OToole

INSIDEADVERTISER INDEX

Biomass Magazine: (USPS No. 5336) April 2016, Vol. 10, Issue 4. Biomass Magazine is published monthly by BBI International. Principal Office: 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. Periodicals Postage Paid at Grand Forks, North Dakota and additional mailing offices. POSTMASTER: Send address changes to Biomass Magazine/Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, North Dakota 58203.

COPYRIGHT 2016 by BBI International

TM

Please recycle this magazine and remove inserts or samples before recycling

2016 National Advanced Biofuels Conference & Expo 63Advanced Cyclone Systems 21AGCO Corporation 10American Pulverizer Co. 18Andritz Feed & Biofuel A/S 66ASGCO 7ASTEC Bulk Handling Solutions 65Astec, Inc. 2Biotec Energy 28Biotec Energy 36BRUKS Rockwood 47Columbia Specialty Company, Inc 29CPM Global Biomass Group 49CPM Wolverine Proctor, LLC 54Detroit Stoker Company 56EBM Manufacturing 64Elliott Group 13GRYPHON Environmental, LLC 45Hermann Sewerin GmbH 58Hurst Boiler & Welding Co. Inc 48IEP Technologies 30-31International Bioenergy Conference & Exhibition Society 11Iowa Economic Development Authority 22Iowa Northern Railway Co. 37Julio Berkes 19KEITH Manufacturing Company 57Laidig Systems, Inc 17MonitorTech Corporation 70Morbank, Inc 23Orthman Conveying Systems 16PHG Energy 72ProcessBarron 8Rawlings Waste Wood Recovery Systems 42Scientific Dust Collectors 24

Sigma Thermal, Inc 38SUMA America, Inc 50SWANA Solid Waste Association of North America 67Swedish Exergy AB 68TerraSource Global (Jeffrey Rader) 9Tramco, Inc 20United Sorghum Checkoff Program 39Uzelac Industries 15Varco Pruden Buildings 60Vecoplan LLC 32Vermeer Corporation 4West Salem Machinery Co. 55Williams Crusher 12Yargus Manufacturing, Inc. 69

6 BIOMASS MAGAZINE | APRIL 2016

A Delicate Balance

At press time, registrants from 25 countries were signed up for this years International Bio-mass Conference & Expo. Last year, recognizing that as the companion issue for the event, our coverage in the April issue of Biomass Magazine should examine the global nature of the industry, so we fixed our editorial gaze on import and ex-port stories. This year, we returned to that same

theme, and have found that the biomass market is very much global, both in the nature of its opportunities and its participants.

This quarters Biomass Construction Update, on page 14, is a rich illustration of the global nature of this business. A careful examination of the 22 projects featured in the update make it clear that foreign marketplaces ultimately lead to installed production capacity stateside. Projects not generating energy products for foreign markets still leverage a global knowledge base, deploying technologies developed outside of the U.S. The impact of a growing industrial wood pellet market is easy to see in projects like Colombo Energy in South Carolina, Blue Sky Biomass in Georgia, and Highland Pellets in Arkansas. In other projects, tech-nologies and expertise are tapped instead of markets. A German engineering and construction has been hired to build a biomass power plant in Hawaii. An Italian firm is the technology provider and constructor for two North American biogas

plants, a relationship that Katie Fletcher highlights in her page-52 biogas feature Growing the Local Home Base.

Underpinning, and often complicating, all of this is policy. This issues sto-ries make it clear that while foreign policies, as well as state policies such as those explored in Senior Editor Ron Kotrbas page-62 story, Importing to Meet Cali-fornia Demand, successfully generate real opportunities for domestic producers, they also bring increased foreign interest and competition. Kotrbas story makes it clear that Californias Low Carbon Fuel Standard has led to a dramatic increase in the states biodiesel consumption. In just four years, it has grown 20-fold, and the states inclusion rate, once nominal, now rivals Minnesota and Illinois at just less than 10 percent. Still, biodiesel producers in the U.S. often find themselves outside

of this rapidly-growing marketplace, watching foreign producers from Argentina and Singapore capture a sizeable portion of that states market.

The dynamics Kotrba outlines in his story are playing out across this industry in every segment. Meanwhile, governments continue to wrestle with policies that deliver the environmental benefits for which they were devised, while also keep-ing an eye on domestic economic development and maintaining a favorable trade balance.

TIM PORTZVICE PRESIDENT OF CONTENT & EXECUTIVE [email protected]

EDITORS NOTE

EDITORIAL

PRESIDENT & EDITOR IN CHIEFTom 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 EDITORErin Voegele [email protected]

ASSOCIATE EDITORKatie Fletcher [email protected]

COPY EDITOR Jan Tellmann [email protected]

ARTART DIRECTOR

Jaci Satterlund [email protected]

GRAPHIC DESIGNERRaquel Boushee [email protected]

PUBLISHING & SALESCHAIRMAN

Mike Bryan [email protected]

CEOJoe Bryan [email protected]

VICE PRESIDENT OF OPERATIONSMatthew Spoor [email protected]

SALES & MARKETING DIRECTORJohn Nelson [email protected]

BUSINESS DEVELOPMENT DIRECTOR Howard Brockhouse [email protected]

SENIOR ACCOUNT MANAGERChip Shereck [email protected]

ACCOUNT MANAGERJeff Hogan [email protected]

CIRCULATION MANAGER Jessica Beaudry [email protected]

MARKETING & ADVERTISING MANAGERMarla DeFoe [email protected]

EDITORIAL BOARD MEMBERS

Stacy Cook, Koda Energy

Ben Anderson, University of Iowa

Justin Price, Evergreen Engineering

Adam Sherman, Biomass Energy Resource Center


INDUSTRY EVENTS

International Fuel Ethanol Workshop & ExpoJUNE 20-23, 2016Wisconsin CenterMilwaukee, WisconsinThis 6th annual national event, produced by BBI International, will feature the world of advanced bio-fuels and biobased chemicalstechnology scale-up, project finance, policy, national markets and morewith a core focus on the industrial, petroleum and agribusiness alliances defining the national ad-vanced biofuels industry, plus a networking junction for all biomass industries.866-746-8385 | www.fuelethanolworkshop.com

National Advanced Biofuels Conference & ExpoJUNE 20-23, 2016Wisconsin CenterMilwaukee, WisconsinThe 6th annual National Advanced Biofuels Confer-ence & Expo will take place June 20-23, 2016, at the Wisconsin Center in Milwaukee, Wisconsin. Pro-duced by BBI International, this national event will feature the world of advanced biofuels and biobased chemicalstechnology scale-up, project finance, policy, national markets and morewith a core focus on the industrial, petroleum and agribusiness allianc-es defining the national advanced biofuels industry and networking junction for all biomass industries.866-746-8385 | www.advancedbiofuelsconference.com

International Biomass Conference & ExpoAPRIL 10-12, 2017Minneapolis Convention CenterMinneapolis, MinnesotaOrganized by BBI International and produced by Bio-mass Magazine, this event brings current and future producers of bioenergy and biobased products to-gether with waste generators, energy crop growers, municipal leaders, utility executives, technology pro-viders, equipment manufacturers, project develop-ers, investors and policy makers. Its a true one-stop shopthe worlds premier educational and network-ing junction for all biomass industries.866-746-8385 | www.biomassconference.com

Biomass Magazine Webinar Series: Best Practices in Biomass Facility Dust Explosion Prevention and ProtectionAPRIL 7, 2016Sponsored by IEP TechnologiesDust explosions can present serious risk within a biomass facility. Ignition of a dust cloud in process equipment can destroy the primary vessel, propa-gate to interconnected equipment and the plant, causing secondary explosions with devastating re-sults. Fortunately, there are proven ways to address this threat. This webinar, a follow-up to IEPs informa-tion-packed effort from last year features three new experts. This free webinar is a cant-miss offering for operations teams looking to keep abreast of the lat-est advancements in these vital aspects of safe plant operations.866-746-83835 | www.biomassmagazine.com/pages/webinar

PEOPLE, PRODUCTS & PARTNERSHIPSBusiness Briefs

FUEL | AIR | GAS | ASH processbarron.com/biomass

205-663-5330

FUEL | AIR | GAS | ASHBIOMASS to ENERGYProcessBarron is there every step of the way.

Come see us at Booth #1121

Clariant honored for its sunliquid technology

Clariant was honored for its innovative sunliquid technology for the production of cellulosic ethanol from agricultural residues as part of the 2015 German Innovation Prize for Climate and Environment. The biotech-nological process was awarded first place in the process innovations category.

Velocys appoints CEOVelocys plc has appointed David Pum-

mell as CEO. Pummell has more than 30 years of energy and oil industry experience. Prior to joining Velocys, he served as CEO of ACAL Energy Ltd. Pummell also previously served as CEO of MAPS Technology Ltd., where he successfully commercialized the technology prior to its acquisition by GE. He also served as CEO of Ceres Power Group plc, a developer of fuel cell micro combined-heat-and-power

(CHP) products for the domestic stationary power sector.

Hamer, Fischbein Americas to merge operations

Hamer and Fischbein Americas have announced plans to merge operations. The Hamer-Fischbein union combines almost 200 years of industrial bag closing and automated packaging experience. The company will con-tinue to focus on its core businesses, including bag filling, bag closing, automated bagging and robotic palletizing.

Doppstadt appoints Ecoverse exclusive distributor

Doppstadt has appointed Ecoverse In-dustries exclusive distributor for all Dopp-stadt sales and rentals in California, Oregon, Washington, Arizona, Idaho, Montana and

Hawaii. Ecoverse has worked alongside Doppstadt in the North American market for more than 13 years and has strong experience with Doppstadt products and their applica-tion across the market. In addition to supply-ing new machines, Ecoverse will also provide service, parts and full after-market support for all new and existing Doppstadt custom-ers, including technician and field training to support the complete Doppstadt product range.

RusForest begins operations at Russian pellet mill

RusForestAB has announced the first sales from its 30,000-ton-per-year pellet mill in Magistralny, Russia. Following successful test runs in November, the company commenced production and delivery of wood pellets to its European trading partner in December.

Stora Enso to add pellet production capacity at Sweden site Stora Enso has announced plans to invest 16 million ($14.13 million) to integrate pellet

BUSINESS BRIEFS

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PEOPLE, PRODUCTS & PARTNERSHIPSBusiness Briefs

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Rentech appoints CFO

Rentech Inc. has ap-pointed Jeffrey R. Spain chief financial officer (CFO) of Rentech and the general partner of Rentech Nitrogen Part-ners L.P. Spain will be responsible for overseeing the finance and accounting functions for both companies. He replaces Dan J. Cohrs. Before being appoint-ed CFO, Spain served as senior vice president of finance, accounting and administration for Rentechs wood fibre group. He has held vari-ous senior financial and accounting roles at Rentech since 2011, and most recently played a critical role in the financial turnaround of Fulghum Fibres. Spains experience spans over 20 years and includes investment bank-ing and operations management and chief financial officer roles. His past employers in-clude Credit Suisse First Boston, LeadPoint Inc., eNutrition Inc. and Kimberly-Clark Corp.

Director of LBNL appointed

The University of California Board of Re-gents has approved Mi-chael Witherell, vice chan-cellor for research at UC Santa Barbara, as direc-tor of Lawrence Berke-ley National Laboratory. Witherell is a leading physicist with a highly distinguished career in teaching, research and managing complex organizations. He has re-ceived numerous honors and recognitions for his scientific contributions and achievements. He is the former director of the Fermi Na-tional Accelerator Laboratory in northern Illi-nois and currently holds the presidential chair in Physics at UC Santa Barbara.

BioAmber earns certifications for Sarnia plant

BioAmber Inc. has announced that its Sarnia, Ontario, production plant, jointly owned with Mitsui & Co., has received ISO 9001, ISO 14001, OHSAS 18001 and FSSC

22000 certifications. These certifications were granted by accredited certification bod-ies following audits of the Sarnia plant during the fourth quarter of 2015. By achieving these certifications, BioAmber has demonstrated its commitment to enhancing customer satis-faction through the implementation of an in-tegrated management system. BioAmber has put in place processes that ensure continual improvement and conformity to customer, statutory and regulatory requirements.

Metabolix relocates headquarters Metabolix Inc. has signed a 10.5-year

lease agreement for 30,000 square feet of state-of-the-art laboratory and office space in Woburn, Massachusetts. Metabolix expects to take occupancy of the space as its corporate headquarters in June as it exits space in Cam-bridge, Massachusetts. Metabolix also plans to exit office space it currently occupies in Lowell, Massachusetts, in May 2017 and to consolidate its biopolymers sales, marketing and adminis-trative offices and biopolymers research and development laboratories in the Woburn facil-ity. The new laboratory facilities will include a

Spain Witherell


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Contact us for more information: Event Manager, Cam McAlpine cam#bioenergyconference.org +1.250.961.6611

Join us in Prince George, Canada for the 7th International Bioenergy Conference and Exhibition.

Over the three days of the conference, held at the centre of one of the largest biomass fibre baskets in the world, there will be many opportunities to learn more about the industry in British Columbia as well as the latest global trends in fibre supply, sustainability, products, technology, policies and other drivers of the future bioeconomy.

PARTNERSHIPS FOR INNOVATIONDRIVING SUCCESS IN BIOENERGY

15 - 17 JUNE 2016 PRINCE GEORGE, BC, CANADA

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microbial fermentation lab and an expanded biopolymers applications development lab. Pending the spinout of its Yield10 crop sci-ence program, Metabolix will also relocate its Massachusetts-based crop science laboratory and personnel to the facility in Woburn.

Dale honored for work in biological engineering

The American Insti-tute for Medical and Bio-logical Engineering has announced the induction of Bruce Dale, Michigan State University professor of chemical engineering and materials science, to its College of Fellows. Dale was nominated, reviewed and elected by peers and members of the College of Fellows for outstanding contributions in the biological engineering of transforming plant biomass to food and fuel to achieve a sustainable bioeconomy. The College of Fellows is composed of the top 2 percent of medical and biological engineers in the country. AIMBEs mission is to recognize excellence in,

and advocate for, the fields of medical and bio-logical engineering in order to advance society.

SBP appoints CEOThe Sustainable Biomass Partnership has ap-pointed Carsten Huljus as CEO. Huljus is ex-perienced in forest management and chain of custody certification schemes. As CEO, he will be responsible for the leadership and manage-ment of SBP, including engagement with its many stakeholders, such as biomass supply chain actors, policy makers and environmental NGOs. The current executive director, Peter Wilson, will take up the new post of standards director with Simon Armstrong continuing as technical director.

Biogas expert recognized

Abraham Engeda, a professor of mechanical engineering at Michigan State University, is one of 10 professors world-wide to earn the Fulbright Global Flex Award. He

will use the award to support two years of pow-er-generation research in remote parts of China and Ethiopia. The Fulbright Global Flex Schol-ars Award is funded by the U.S. Department of State. It helps U.S. academic and professional experts engage in regional or transregional re-search and teaching through visits to multiple countries. Engeda is an expert in turbomachin-ery, including power plant cooling, experimen-tal thermofluids, turbomachinery flow analysis and design, gas turbine and biogas. He is a fel-low of the American Society of Mechanical Engineers and a recipient of the ASME Fluid Machinery Award.

Floreat Group launches company specializing in biomass

Floreat Group has committed $50 million to the U.K. biomass sector and launched FCM Bioenergy Ltd., trading as Vesta, an energy supply company specializing in providing low-cost, long-term green energy contracts using biomass to the manufacturing, agriculture and care home sectors. The venture will be funded through a mixture of equity and debt, all fund-ed privately by the group.

Dale

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Fort St. James Green Energy LP

Location Fort St. 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 2013Start-up date 2016Toward the end of February, Fort St. James was is roughly 75 percent complete and on track to become operational by July.

In the U.S., unusual weather wreaked havoc on several plants under construction through the winter. While the El Nio has brought mild conditions to much of the country, it has and continues to bring above-average rainfall and flooding to many locations, and consequently has slowed progress a bit at some facilities.

A handful of plants aiming for startup earlier in the year have seen slight delays, but many are now readying to do so, with a fair number of plants already achieving operational status. For example, in Charlotte, North Carolina, and Johnston, Rhode Island, Blue Sphere is readying to turn on its combined-heat-and-power biogas plants, after battling record rainfall and muddy site conditions. Chip Energys pellet manufacturing plant in Goodfield, Illinois, reported a windy Old Man Winter that was unkind to construction workers needing to work 80 feet in the air. Setbacks are being gained upon, however, and a July startup is planned.

Also planning a July startup is Veolia North America and Fengate Capital Managements 40-MW Fort St. James Green Energy Project in British

Columbia, with its twin in Merritt following shortly thereafter. Projects graduating to completion in this quarters Biomass Construction Update include the district heating plant at University of Maine, Farmington, which is now providing the campus with thermal energy, and Green Energy Teams power plant in Kauai, Hawaii, which, after experiencing some technical issues with the facilitys turbine, has been fired up and is expected to be sending power to the grid by April.

Many are bidding an enthusiastic adios to El Nio, which is weakening and expected to diminish by late spring or early summer. Its end could make way for an interesting fall/winter construction season, however, as researchers believe there is a good chance that La NiaEl Nios opposite, usually characterized above-average precipitation and below-average temperatures to Canada, the U.S. Midwest and Pacific Northwest regions, as well a strong hurricane season in the Atlantic regionwilll pay a visit to North America.

If you have a project you would like profiled in the Biomass Construction Update, email [email protected].

Biomass CONSTRUCTION UPDATEHello Spring, Adios El Nio By Anna Simet

FORT ST. JAMES GREEN ENERGY PROJECTPHOTO: FENGATE CAPITAL MANAGEMENT

TEMPLEBOROUGH BIOMASS PLANTPHOTO: TEMPLEBOROUGH BIOMASS PLANT

Templeborough Biomass Plant

Location Rotherham, South Yorkshire, England.Engineer/builder Interserve Construction Ltd., Babcock & Wilcox VlundPrimary fuel Commercial and municipal wood wasteBoiler type Babcock & Wilcox Vlund multifuel boilerNameplate capacity 41 MWCombined heat and power YesGovernment incentives NoneIPP or utility IPPGroundbreaking date Q2 2015Start-up date August 2017The plant is rising above ground level as the power plant equipment, boiler, turbine, generator and gas wood fuel store are built. Power will be sold to GDF Suez Energy UK via a 15-year power purchase agreement. The facility is on course for an opening in late summer 2017.


Biomass Power Pellets Biogas Thermal Advanced Biofuel CONSTRUCTION UPDATE

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Biomass Biosolids Meat Processing FertilizerWood Pellets Municipal Sludge Cattle & Hog Blood Ammonium SulfateWood Chips Industrial Sludge Meat and Bone Sulfate of PotassiumWood Shavings DAF Solids Feather Meal Salts Agricultural Poultry Manure Egg Shells Potash

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Green Energy Team LLC

Location Koloa, Kauai, HawaiiEngineer/builder Standardkessel Baumgarte Group (SKG)Primary fuel Eucalyptus and albiziaBoiler type Pusher-type grate with natural circulation steam generatorNameplate capacity 7.5 MWCombined heat and power YesGovernment incentives N/AIPP or utility IPPGroundbreaking date January 2013Start-up date Q4 2015After completing an unforseen turbine repair, the boiler was lit and steam is being produced. The plant is on track to be sending power to the grid by April.

Constellation Energy, Albany Green Energy

Location Albany, GeorgiaEngineer/builder DCO Energy LLCPrimary fuel Forest residue, pecan shells, peanut hullsBoiler type Valmet circulating fluidized bed boilerNameplate capacity 50 MWCombined heat and power Yes

Government incentives $250 million in bonds issued by Albany Dougherty Payroll Development AuthorityIPP or utility UtilityGroundbreaking date 2014Start-up date June 2017Boiler building steel erection continues and reached its highest elevation in February. Major equip-ment deliveries have commenced including the boiler steam drum and truck tippers. Fuel handling system construction also commenced in February.

DUBLIN WASTE-TO-ENERGY LTDPHOTO: P.J. HEGARTY & SONS

Dublin Waste-to-Energy Ltd.

Location Poolbeg, Dublin, IrelandEngineer/builder Covanta Energy Corp.Primary fuel Municipal solid wasteBoiler type NANameplate capacity 58 MWCombined heat and power NoGovernment incentives Irelands renewable feed-in tariff IPP or utility IPPGroundbreaking date Q4 2014Start-up date 2017The project is over 50 percent complete and on schedule to begin start-up operations in early 2017. About 60 percent of the plant's waste capacity has been contracted. Covanta is in the process of staffing the facility.


Biomass Power Pellets Biogas Thermal Advanced Biofuel

Blue Sky Biomass Georgia LLC

Location Adel, GeorgiaDesign/builder Blue Sky BiomassExport port TBDExport location EuropePellet grade Industrial premium pelletsAnnual capacity 540,000 metric tonsFeedstock Sawmill residualsGroundbreaking date 2014Start-up date 2016Four presses are installed with remaining eight presses to arrive in April. The plant is four to five months from completion.

BLUE SKY BIOMASS GEORGIA LLCPHOTO: BLUE SKY BIOMASS

Orthman Conveying Systems is experienced in handling all of your bulk materials.

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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 NoneIPP or utility N/AGroundbreaking date 2014Start-up date 2016Toward the end of February, the plant was roughly 80 percent complete. Construction around the boiler is ongoing, conveyors are nearing finish, the steam turbine building is complete. Equipment is on-site and piping and electrical connections are soon to be made.

Colombo Energy Inc.-Greenwood

Location Greenwood County, South CarolinaDesign/builder PortucelExport port N/AExport location EuropePellet grade Industrial premium pelletsAnnual capacity 460,000 metric tonsFeedstock Forest wasteGroundbreaking date March 2015Start-up date Summer 2016As part of its responsibilities in the project, Prodesa will supply the complete milling, pelleting and cooling lines, including five hammer mills, 15 pellet mills, and five vertical coolers.


CONSTRUCTION UPDATE

Chip Energy Inc.

Location Goodfield, IllinoisDesign/builder Chip EnergyExport port N/AExport location N/APellet grade Pellets, briquettes and logsCapacity 36,500 metric tonsFeedstock Waste wood, energy crops, agricultural residueGroundbreaking date 2013Start-up date TBDAfter a few setbacks during installation of the fabric roofing, piping was ordered and scheduled for installation in mid-March. Coupled with a tough winter, start-up has been pushed to midsummer, with production expected in July, and full operations in Q3.

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Blue Sphere - Waste To Energy Power Plant Charlotte

Location Charlotte, North CarolinaEngineer/builder AUSTEP/T. Ortega GainesSubstrate(s) Organic/food wasteDigester type Conical tank utilizing AUSTEP's Cruise Control SystemGas cleaning technology AUSTEP biogas washing system/wet scrubberBiogas production capacity N/A

Biogas end use ElectricityPower capacity 5.2 MWGroundbreaking date March 2015Start-up date Spring 2016After minor weather-related setbacks, the plant will begin operations in early spring. Power is being sold to Duke Energy via a 15-year PPA.

Blue Sphere - Waste To Energy Power Plant Johnston

Location Johnston, Rhode IslandEngineer/builder AUSTEP/T. Ortega GainesSubstrate(s) Organic/food wasteDigester type Conical tank utilizing AUSTEP's Cruise Control SystemGas cleaning technology AUSTEP biogas washing system/wet scrubberBiogas production capacity N/A

Biogas end use ElectricityPower capacity 3.2 MWGroundbreaking date March 2015Start-up date Spring 2016The facility is on schedule for an early spring startup. Power will be sold to National Grid via a 15-year PPA.

BLUE SPHERE - CHARLOTTEPHOTO: AERO PHOTOS

BLUE SPHERE - JOHNSTONPHOTO: CREATIVE CHICA PHOTOGRAPHY


CONSTRUCTION UPDATE

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Roeslein Alternative Energy of Missouri LLC

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

Biogas production capacity 2 million-plus Btu/year

Biogas end use CNG and LNGPower capacity N/AGroundbreaking date May 2014Start-up date First pipeline injections in June 2016Phase II construction started in November and is ongoing. Commissioning and startup are sched-uled for May.

LA Sanitation, Hyperion Treatment Plant Cogeneration Project

Location Playa del Rey, CaliforniaEngineer/builder Constellation Energy Resources LLCSubstrate(s) Municipal sewageDigester type/technology Egg-shapedGas cleaning technology Moisture Rx and Regenerative Mixed-Bed Media

Biogas production capacity Electricity and steam

Biogas end use N/APower capacity 25 MWGroundbreaking date November 2015Start-up date 2016Design is 100 percent complete. Major equipment deliveries are in progress and construction is progressing toward a mechanical completion date midsummer 2016.

Surrey Organic Biofuel Facility, Greenlane Biogas

Location Surrey, British ColumbiaEngineer/builder Orgaworld CanadaSubstrate(s) 115,000 metric tons of organic waste annuallyDigester type/technology Orgaworlds Biocel, dry ADGas cleaning technology Greenlane water scrubbing biogas upgrading technology

Biogas production capacity N/A

Biogas end use RNG, heatPower capacity N/AGroundbreaking date Q1 2015Start-up date Early 2017The facility is under construction and will process organic waste from the citys curbside collection program, and commercial waste from the region. Biogas will be upgraded to produce renewable natural gas that will fuel the citys fleet of natural gas waste collection and operations service vehicle, as well as fuel the city-owned district energy system to heat and cool public and privately owned buildings.

Skrbk Power Station, Dong Energy

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

Heat enduse District heat and electricity

Government incentives/grants N/AGroundbreaking date September 2014Start-up date Early 2017At press time, approximately 150 workers were on-site. That number will increase to nearly 500 this quarter.



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DOE's Savannah River Site Biomass Heating Plant

Location Aiken, South CarolinaEngineer/builder Ameresco Inc.Primary fuel Forest residueBoiler type Fluidized bedNameplate thermal capacity N/A

Heat enduse District heat

Government incentives/grants N/AGroundbreaking date May 2015Start-up date Spring 2016The relocated package boiler is online, and the new biomass boiler will be online late spring.

University of Maine at Farmington, Biomass Heat Plant

Location Farmington, MaineEngineer/builder Trane U.S. Inc.Primary fuel Wood chipsBoiler type Messersmith Nameplate thermal capacity 35,400 MMBtu

Heat enduse District heat

Government incentives/grants N/AGroundbreaking date May 2015Start-up date January 2016The plant is now supplying heat to the campus. A public ribbon-cutting ceremony was planned March 13.

East Kansas Agri-Energy LLC - Renewable Diesel Facility

Location Garnett, KansasDesign/builder WB ServicesProcess technology Capable of both enzymatic and chemical processingBiofuel/biochemical product(s) Renewable dieselFeedstock Distillers corn oil

Production capacity 3 MMgy

Type of RINs N/ACoproducts NaphthaGroundbreaking date 2014

Start-up date N/A

ProjectComplete

CONSTRUCTION UPDATE

Central MN Renewables LLC

Location Little Falls, MinnesotaDesign/builder WeitzProcess technology Advanced fermentation processBiofuel/biochemical product(s) n-butanol, acetoneFeedstock Corn

Production capacity 21 MMgy

Type of RINs N/ACoproducts N/AGroundbreaking date Q4 2015

Start-up date Q3 2016

The former ethanol plant requires some additional equipment and building infrastructure, including slightly different distillation equipment, but is utilizing some existing assets. Construction is in full swing and the plant is on track to become operational during the third quarter this year.

ENVIA Energy Oklahoma City LLC

Location Oklahoma City, OklahomaDesign/builder Ventech Engineers International LLCProcess technology Velocys Fischer-Tropsch reactorBiofuel/biochemical product(s) Diesel, synthetic waxes and naphthaFeedstock Landfill gas and natural gas

Production capacity TBA

Type of RINs D7, D3Coproducts TBAGroundbreaking date May 2015

Start-up date Mid-2016

Manufacture of the FT reactors and initial catalyst charge for the plant is complete. Fabrication of the modular process units is essentially complete and the first modules are being prepared for delivery to the site.

ENVIAPHOTO: VELOCYS INC.

CENTRAL MN RENEWABLES LLCPHOTO: GREEN BIOLOGICS

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The Federal Energy Regulatory Commis-sion Office of Energy Projects recently released its energy infrastructure update for December, reporting the U.S. added 312 MW of biomass capacity last year, up from 270 MW in 2014. The number of biomass units, however, de-creased from 92 in 2014 to 30 in 2015.

According to the report, 487 new genera-tion units were placed in service across the U.S. last year, with a combined capacity of 17,272 MW. In 2014, the 741 new generation units were placed into service, with a combined ca-pacity of 19,425 MW.

Of the renewable energy technologies, wind led with 71 units with a combined capacity of 8,186 MW, followed by 282 solar units with a combined capacity of 2,598 MW. The U.S. also added 22 hydro units last year with a combined capacity of 154 MW, 2 geothermal steam units with a combined capacity of 48 MW. No waste heat units were added last year, but 17 units

categorized as other were added, with a com-bined capacity of less than 1 MW.

As of the close of 2015, the U.S. had 16.68 GW of biomass capacity, accounting for ap-

proximately 1.43 percent of total U.S. capacity. Of the nonhydro renewables, only wind had a higher percentage of capacity.

PowerNews

In February, the U.S. Supreme Court granted a request to delay enforcement of the U.S. EPAs Clean Power Plan until legal chal-lenges are resolved.

More than two dozen states and a vari-ety of industry groups have filed legal chal-lenges against the program. Oral arguments are currently scheduled to be held June 2 with the U.S. Court of Appeals for the District of Colombia.

White House Press Secretary Josh Earnest issued a statement on the Supreme Courts decision Feb. 9. We disagree with the Supreme Courts decision to stay the Clean Power Plan while litigation proceeds, he said in the statement.

Even while the litigation proceeds, EPA has indicated it will work with states that choose to continue plan development and will prepare the tools those states will need, he continued. At the same time, the admin-istration will continue to take aggressive steps to make forward progress to reduce carbon emissions.

The U.S. EPA plans to hold a workshop on the role of biomass in the Clean Power Plan April 7.

312 MW of biomass capacity added in 2015

Supreme Court delays enforcement of EPAs Clean Power Plan

New generation in service2015 2014

No. of units Installed capacity (MW) No. of units Installed capacity (MW)

Coal 1 3 3 166Natural gas 51 5,952 82 9,162Oil 11 19 19 96Water 22 154 19 237Wind 71 8,186 71 5,319Biomass 30 312 92 270Geothermal steam 2 48 7 36Solar 282 2,598 426 3,776Waste heat 0 0 4 75Other 17 0 8 22Total 487 17,272 741 19,425SOURCE: FEDERAL ENERGY REGULATORY COMMISSION

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In the first few months of 2016, Maine lawmakers and the media have shown that when the (wood) chips are down, they will rally to do everything in their power to keep plants open. Biomass currently provides 25 per-cent of Maines total power, not just renewable electric-ity, and it is encouraging to see that many Mainers want to keep it that way.

On Jan. 1, Massachusetts put into effect new regu-lations that require any biomass facility selling power on the New England grid to meet an arbitrary 50 percent efficiency standard to qualify for Massachusetts renew-able energy credits (RECs). This disqualifies any stand-alone biomass facility without a steam host, a category into which falls the entire New England biomass fleet operating today. As a result, two Maine facilities have announced impending closure by the end of March, if the policy is not reversed.

The hope is that Massachusetts will reconsider its requirement, allowing the Maine facilities to remain online. This will not happen overnight, however. In the meantime, Maine lawmakers are looking at creative measures to help fill in the gapssupporting not only biomass, but also the loggers and other rural workers who benefit from the existence of a strong biomass market.

Maine media and lawmakers have been fully sup-portive of biomass, going on the record for an unam-biguous defense of our industry and its many benefits. Maine Gov. Paul LePage, in this years State of the State letter, recognized the economic role of biomass in Maine, and later held a briefing with Maine loggers and biomass power providers to hear about the current challenges and pledge the continued help of his staff in finding a solution

Some of the media stories of the past month have included:

A Portland Press Herald story that explored the link between biomass and the states forestry economy, with several quotes from loggers and sawmill executives on the important role biomass plays for their businesses.

Several Maine newspapers ran lengthy editorials on the need to reconsider state policies that are endan-gering Maine biomass. On the need to prevent potential job loss, the editorial said, To help avoid that outcome, Maine should pursue policies favorable to biomass, even if that means marginally pushing up energy rates with above-market contracts. Any rate increase would be more than offset by the economic benefits of a home-grown energy supply that also means so much to forest products industry.

Sen. Angus King, I-Maine, interviewed me for a nearly 15-minute segment on WGANs Inside Maine, during which we discussed the biomass industry and the policy solutions that could help keep plants open.

A Portland Press Herald op-ed by Patrick Strauch further drove home the environmental benefits of bio-mass, and the adverse effects of state policies that make it more difficult to use biomass as a fuel for generating power. He also recognized King and Sen. Susan Collins, R-Maine, for their carbon neutrality amendment to the Senate energy bill.

Its not yet clear what policy solutions will result from this wave of strong biomass support being vocal-ized in Maine. But we know that many Maine legisla-tors are aware of the issue and are working to find a solution. The biomass industry is highly appreciative of these efforts.

Author: Bob CleavesPresident, Biomass Power Association

[email protected]

Biomass Powers Momentum in Maine

POWER

BY BOB CLEAVES


STAYING ALIVE: Rio Bravo Fresno is one of only a couple dozen biomass power plants that are still operating in California, which at its peak hosted more than 60 facilities.PHOTO: RICK SPURLOCK


While Californias biomass power industry continues its struggle for survival, fuel suppliers are left without a home for mounting materials. BY BRUCE DORMINEY

From its very inception, California has fostered the entrepreneurial spiritfrom the 1849 Gold Rush right through to present-day Sili-con Valley. The Golden State has tradi-tionally been a hotbed of innovation, and that remains true today, particularly when it comes to renewable energy generation.

But three decades after California led the country in creating one of the worlds most viable biomass industries, the states sector is literally fighting for its long-term survival. A confluence of low natural gas prices, expiring power purchase agreements (PPAs), expiration of price guarantees on continuing PPAs, and cheap and plentiful solar alternatives have deeply cut into the states biomass-to-energy production.

In many ways, during his second term ending in 1983, current California Gov. Jer-ry Brown was the architect and inspiration behind the states once-burgeoning bio-mass industry. At one time, the state saw more than 60 plants incorporating a mix of ag waste, forest product waste and residues, as well as urban construction and demoli-tion (C&D) waste.

Today, Brown is under pressure from both biomass plant operators and fuel sup-

pliers who are increasingly looking to lead-ership from Sacramento for a way out of what may shape up to be biomasss worst year ever in California.

Past Biomass GloryAt its peak in the early 1990s, the Cali-

fornia biomass energy industry produced almost 4.5 billion kilowatt-hours (KWh) per year of electricity, according to the na-tional renewable energy laboratory. There are currently 23 California biomass plants operating with a collective capacity of 550 MW, says Gregg Morris, a Berkeley-based bioenergy consultant. Seven or eight plants are idle but refurbishable.

Thus, he says, there is probably 150 MW of capacity that could come back on-line if the facilities were to secure PPAs.

Six biomass plants have shut down in the past two years. Covantas Mendota bio-mass plant is just the latest casualty, clos-ing in December. Morris says two or three are facing closure if they dont get a new contract this year. He expects another half dozen to close next year.

Long-term PPAs are expiring at the same time that we are seeing historically low natural gas prices, says Carrie Annand,

Off a SunsetStaving

POWER


vice president of external affairs at the Bio-mass Power Association in Washington, D.C. She says that is causing uncertainty for all California biomass producers.

Biomass currently only provides Cali-fornia with less than six percent of its re-newable energy; compared to an all-time high of more than 15 percent. The indus-try uses some five to six million tons total per year of biomass total.

In a normal year, we would have 100 percent of our fuel supply already contract-

ed, says Rick Spurlock, plant manager of Rio Bravo Fresno, a 25-MW plant owned by IHI Power Services Corp. But we dont have an energy price agreement past July 31. Thus, Spurlock says they are not go-ing to contract fuel without an energy price agreement in place, a decision that boils down to economics. If the biomass plants go off the fixed rate, that means the price per KWh will drop by five to six cents, says Lynch. They can buy wind and solar for five to six cents.

Thus, its no surprise that Covantas five California biomass plants have all been shut down. Current power purchase prices are not sufficient to cover operations and fuel and the company has been unable to secure PPAs to continue operations, says James Regan, spokesman for Covanta in Morristown, New Jersey. We will continue to evaluate their future, but [only] getting a PPA at the right price will enable us to oper-ate, Regan says.

FOGGY FUTURE: Rio Bravo Fresno, a 25-MW plant operating in central California, normally has all of its annual fuel supply contracted at this time of year, but thats not the case right now, as the near-term fate of the facility is unclear.

PHOTO: RICK SPURLOCK


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Clock is Ticking The California legislature can appro-

priate greenhouse gas (GHG) reduction funds, says Kelly Covello, president of the Almond Hullers & Processors Associa-tion in Ripon. But the utilities still need to sign contracts, the California Public Utility Commission needs to approve them and a mechanism to get the funds passed through to the utility needs to be created, she says.

Finally, to benefit ag and almond grow-ers, the contracts and funds need to flow

to the plants that are located in or near the valley to take ag biomass material, Covello says. The AHPA has developed a coalition of biomass producers, forestry profession-als, urban waste collectors, agricultural enti-ties and city sanitation district advocates to develop a strategy to address the immediate crisis and build a model for a sustainable biomass industry, according to Covello, but chipping rates have already increased from $350 per acre to over $1200 per acre. Ulti-mately, we will not know until the governor signs the state budget in June if PPAs will be signed and what the details will be, she says.

Unfortunately, that may be too late for many operators. If we are unable to reach agreement on an extension to our fixed en-ergy price, the plant would most likely shut-down this summer, says Spurlock. Cur-rent SRAC (short-run avoided cost) pricing would not even cover the cost of the plants fuel.

That means this summer, prices Spur-lock would be offered for the plants power could drop to as low as 3 cents per KWh. If that happens, we would no longer be able to supply wood to the Rio Bravo plant at the equivalent of 3 cents per KWh, says Harley Phillips, tipping manager with Wil-son Ag in Californias Central Valley.

Phillips says the only alternative would be to raise the price for taking out orchard residues to the point where it would not be economically feasible for the growers. If all of this happens, were going to have to develop something else to do with this

wood, he says. Were trying to see how much can be incorporated back into the ground in the orchard where it came from.

Disposal of Mounting BiomassFurther north in Chico, Tim Lynch

of Agra Marketing Group, an ag waste fuel supplier, also says if nothing changes soon, his company will be in dire straits this summer. If these biomass plants cant get fair, 5- to 10-year terms on price per KWh, Lynch says, it could result in an environ-mental disaster. Theres so many millions of tons of this material, its got no place to go, says Lynch.

Does this mean that the growers will go back to open burning? South of Sacra-mento, in the San Joaquin Valley, one of the worst air districts in the U.S., burning permits are again being issued. When they start this open burning again, the farmers are going to get blamed, says Lynch.

The effects of Californias four-year drought and subsequent bark beetle infesta-tion on much of the states forests, could provide a helpful reprieve from such low rates. The U.S. Forest Service estimates that more than 22 million trees have already died. And as Gov. Jerry Brown has noted, state and federal agencies are actively sur-veying the most hazardous forest zones in California as a target of removing such dead wood.

Biomass fuel suppliers and biomass plant operators are pinning their hopes on passage of draft resolution E-4770 put forth by the California Public Utility Com-

POWER

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TRAGEDY TO TRIUMPH: The effects of Californias four-year drought and subsequent bark beetle infestation on much of the states forests, coupled with the governments focus on removing the material and getting it to bioenergy facilities could prove helpful to the industry.PHOTO: CAL FIRE

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mission. The PUC failed to initially pass a resolution that would require three of these utilities to get some 80 percent of their bio-mass fuel from forest residues under threat from drought and bark beetle infestation. These new, short-term emergency PPAs would only be contracted for five years.

Although there may be some changes in its final wording, at press time, Morris felt confident that the PUC would pass some version of its existing resolution on March 17. In part, the PUC resolution orders the utilities to hold a solicitation to contract 50 MW worth of biomass power. He says San Diego Gas and Electric will get 5 to 10 MW, and Pacific Gas and Electric and Southern California Edison will split the rest of that that allotment.

Morris says the overarching goal is to keep the biomass industry operating. That means taking as much material out of those dead trees as the forest service, Cal Fire and any private landowners can produce. As Kim Carr, an assistant deputy director of the California department of forestry and fire protection (Cal Fire) explains, Cal Fire and the states office of emergency services have been designated by the governor to create a task force of stakeholders to co-

ordinate emergency protective actions and monitor ongoing conditions on this epi-demic.

As part of the CPUC resolution, Carr says, the utilities are to offer auctions that allow for higher power prices for existing and new facilities that use biomass from areas designated for purposes of the emer-gency proclamation, as high hazard zones.

Rio Bravo Fresno in Fresno County is ideally located to receive fuel from three of the six county areas affected by southern Si-erra tree mortality, Spurlock says. He notes that major highways run east from the city of Fresno into the mountainous areas of Madera, Fresno and Tulare County, adding that Rio Bravo Fresno is also negotiating a short-term contract with a southern Sierra biomass fuel supplier.

Biomasss Future in CaliforniaThe endgame for the current crisis re-

mains murky, but Annand hopes to eventu-ally see federal support in the form of tax credits for at least some of these biomass facilities. But, she says its unlikely to come until well after this falls presidential elec-tions. Congress and state lawmakers will need to be reminded that biomass provides

much in the way of waste disposal, she adds, and thats not something that wind and solar can offer.

Unfortunately, biomass is not the cheapest renewable out there, Morris points out. So the question remains: How can the biomass industry best be compensated for these extra services?

In the end, if Californias biomass in-dustry is to continue, it will need the hall-marks of the states well-earned reputation for innovation to make it so. Exactly what form such innovation will ultimately take is anyones guess. But, in the long-term, it may take new more efficient technology to lower plant operating costs.

In the short-term, survival will likely come in the form of state and federal tax credits and incentives. If California can weather the current storm, what it learns would likely have follow-on benefits that will ripple across the U.S. biomass industry as a whole.

Author: Bruce DormineyScience journalist/author

[email protected]:@bdorminey

POWER


PelletNews

The North American Wood Fiber Review has reported North American pellet exports increased for the second consecutive three-month period during the third quarter of last year, increasing 15 percent when compared to the sec-ond quarter and reaching a record high of more than 1.6 million tons. Growth is poised to continue as the U.S. South con-tinues to be in expansion mode, with ad-ditional capacity being added last fall.

According to the review, newly oper-ating pellet plants in the Gulf Coast re-gion made their first shipments to Europe during the third quarter. German Pellets facility in Louisiana, Drax Biomasss two

new plants in Louisiana and Mississippi, and Zilkha Biomass Energy in Alabama all continued their ramp-up of opera-tions. Primarily due to these new facilities, North American Wood Fiber Review re-ported exports from the Gulf ports rose by 54 percent from the previous quarter to reach over 550,000 tons in the third quarter of 2015.

In comparison, quarterly shipments of pellets from Canada remained prac-tically unchanged during the first three quarters of the year.

Vermont-based Kingdom Pellet plans to build a pellet mill at the site of a former paper mill in the states North-east Kingdom. The project was recently approved for tax incentives through the Vermont Employment Growth Incentive program, a job stimulus program run by the Vermont Economic Progress Coun-cil.

The company is leasing space at the site of the former Gilman paper mill and will make use of some existing assets, ac-cording to project partner Tabitha Bowl-ing.

Bowling described the size of the plant as community scale. We will pull in material at sustainable levels, she said. The plan is for a 30,000-ton, super pre-mium-grade softwood pellet mill.

A construction date has not yet been set, as the company is in the midst of fi-nancing the project. Vermont Wood Pellet Co., a 16,000-ton-per-year mill in North Clarendon, Vermont, is a partner in the proposed project.

US South continues to ramp up pellet exports

Proposed pellet project awarded tax incentives

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From April 6-8, scores of state, federal, academic and industry representatives will gather at the U.S. DOEs Brookhaven National Lab for the Pellet Stove Design Chal-lenge. This competition seeks to identify and spread afford-able strategies for making pellet stoves cleaner and more effi cient. But, the competition also serves as a high-level gathering of experts to talk about the future of pellet stoves.

The future of residential pellet heating is in fl ux, not only because of rock bottom oil and gas prices, but also be-cause more affordable heat pumps and other technologies are entering the market. However, we think the residential pellet stove market can withstand this downturn and come out even stronger. Heres why:

First, an increasing number of incentives and change out programs are giving larger rebates for pellet stoves than for wood stoves. This trend will create baseline sales to sta-bilize the industry. Its becoming common knowledge that a pellet stove tested at 2.5 grams per hour will burn far cleaner during its lifetime than a wood stove tested at 2.5 grams per hour.

Second, pellet stoves are often used to heat just the core of a house. They offer homeowners substantial savings over an oil or propane boiler designed to heat the whole house.

Third, the price point of many pellet stoves is within reach of millions of Americans. One of the bestselling pellet stoves is a Virginia-made Englander stove that costs $1,200 and is occasionally marked down to under $1,000. Its below average in effi ciency, but for the price, it would take a decade for a higher-effi ciency, $4,000 stove to achieve the same savings.

Fourth, more families are buying pellet stoves not based solely on cost savings, but because of the growing trend to-ward renewable technology and the notion that supporting multinational oil and gas companies is not benefi cial for the planet, and it simply feels good to cut the cord with them. Heat local. Eat local. Keep the profi ts and jobs local.

These four factors will help the pellet stove industry weather low gas and oil prices, but stronger and long-term growth of the residential pellet stove industry will take more deliberate action on the part of the industry. It will require stove manufacturers and their trade associations to be more assertive, transparent and consumer friendly.

The industry has already taken the crucial step of es-tablishing a pellet certifi cation program that helps consum-ers identify consistently good quality pellets, and increasingly more pellet producers are signing up.

Many stove manufacturers still have a long way to go in improving the effi ciency of their technologies. The legacy of pellet stoves being exempted from U.S. EPA standards

through high air-to-fuel ratios left a stain on the industry. Moreover, the average pellet stove today has an effi ciency of about 70 percent, and some are still in the 50 percent range. We need to see more stoves with effi ciencies in the high 70s to build a renewable energy sector that can hold its own with heat pumps, solar thermal and geothermal.

The biggest environmental advantage of pellet stoves is that they can be consistently far cleaner than wood stoves in the hands of consumers. Each gram of particulate matter in a neighborhoods air is important, and pellet stove manu-facturers should start meeting the 2020 EPA standard of 2 grams per hour as soon as possible. Regulators should start devising incentives to be under 1 gram per hour.

All stove manufacturers should play by the same rules, disclosing actual effi ciency and Btu output numbers to con-sumers. Some companies still grossly exaggerate effi ciency and Btu output data, which may result in consumers pur-chasing a substandard product on the basis of false prom-ises. And companies could be legally liable for misleading consumers through false promises, as has happened with some automobile and other appliances manufacturers.

Stove quality and durability are paramount. Too many consumers have had stoves break down and experienced trouble getting professional and affordable repairs. Some brands like Harman have excellent reputations for durability, but the tradeoff is higher cost. Buying a brand that has an experienced dealer and service capacity nearby is very impor-tant for pellet stoves because they need repairs and profes-sional annual cleanings, somewhat like cars. However, unlike cars, many pellet stove brands dont have the service network to support these maintenance needs, and this can result in a loss of consumer confi dence.

All of these issues will be on the table at the Pellet Stove Design Challenge to be held at Brookhaven National Lab in April. We hope state and federal regulators attending will walk away with increased confi dence in this sector and recog-nize the potential of pellet stoves to affordably reduce fossil fuels in millions of U.S. households. The solar juggernaut is building steam every year, and technologies like pellet stoves and boilers that have huge promise could get pushed to the sidelines. Its up to us to ensure that doesnt happen. When oil and gas prices rise again, pellet stoves have potential to become a more mainstream technology in the U.S., just as they are in Europe.

Author: John AckerlyPresident, Alliance for Green Heat

[email protected] 301-204-9562

Roadmap For Pellet Stoves During Cheap Oil, Gas

PELLET

BY JOHN ACKERLY


As the global wood pellet market grows, so does the need for marketplace efficiencies enjoyed by the worlds largest commodities.

BY TIM PORTZ

COMMODITY STATUS

COMMODITY The Upside of


According to United Nations trade data, in 2015, 4.5 million tons of wood pellets were exported from the U.S., while Canada ex-ported 1.6 million tons. In the same year, the U.S. exported nearly 73 million tons of coal, while Canada exported over 30 mil-lion. Collectively, coal exports from North America outstrip pellet exports by a factor of 17. While not surprising, this disparity helps shed some light on the inherent dif-ferences and challenges the wood pellet in-dustry faces as it works to mature and drive the kind of trade efficiencies commonly en-joyed by larger commodities, such as coal, into its own marketplace.

By the simplest of definitions, a com-modity is a fungible good. Put even more simply, one unit of a given commodity can be exchanged for another unit of the same commodity. This concept underpins and supports the movement of commodi-ties of all types around the world, including corn, wheat, wood pulp, coal, oil, natural gas, cotton and a multitude of other goods vital to the global economy. Buyers requir-ing these commodities can be assured that when they need them, ample supply will be available, provided they are willing to pay the market price. And producers, whether they be growers, miners or manufacturers, can invest capital and deploy resources with confidence that their materials and goods

will find a waiting market. Whether or not wood pellets have achieved commodity sta-tus is a matter of ongoing debate, as are the characteristics that analysts point to when making that determination. Additionally, in-dustry experts differ on the necessity of the marketplace practices commonly associated with larger commodities, including broker-age houses and traders, or financial instru-ments like futures contracts.

When people are talk about the com-moditization of wood pellets, their intent is clearly to make the market more liquid so that pellets may be traded more freely, says Gordon Murray, executive director of the Wood Pellet Association of Canada. I think that is the ultimate objective.

This liquidity, from Murrays perspec-tive, is hampered by the existence of vary-ing grades of wood pellets commonly manufactured. For something to be a com-modity, you need to be able to substitute one batch for another, and they should be indistinguishable, provided they meet some basic requirements, he says. Murray points to industrial and residential wood pellets, and even the varying grades and classes within those two categories.

For Todd Bush, a partner at CM Bio-mass, a pellet trading firm, this distinction is too simplistic. Wood pellets are fun-gible, he says. They are fungible just like oil is. There are different grades of oil that

are traded. In fact, there are even different grades of light, crude oil traded. Some re-fineries might not be able to take one sub-grade of light sweet crude, but they may be able to take another.

Bush says commodities of all types have this kind of quality stratification inher-ent in their product class. No commodity market is purely and completely 100 percent fungible, he says. That doesnt mean you cant exchange one unit for another with discounts driven by certain parameters.

The Argument for Commodity StatusThe seasonality of pellet markets have

always challenged the industry, certainly for producers playing in the residential heat market, the sector that gave rise to the in-dustry in the first place. In the heating mar-ket, consumers only need pellets during the fall and winter months, and as a result, buy-ing activity peaks in the months leading up to the heating season, plateaus during the seasonunless there is an unexpected and prolonged cold snapand in the months immediately following, it shuts down alto-gether. On-again, off-again markets bring with them on-again, off-again cash flow realities that challenge producers. Without steady cash flows, producers struggle to run plants efficiently, staff their operations and secure financing for plant improvements and expansion. Further, for the industry to

PELLETS


PELLETS

meet demand once the heating market does ramp up, they must find a way to sustain operations for year-round production.

Commodity traders, Bush says, go a long way in eliminating these challenges. You cant have the handful of consum-ers out there buying up all of the summer product and storing it until they need it, he says. They cant afford that kind of storage. Instead, traders like CM Biomass become a proxy of sorts, buying volumes from producers when others wont, and then reselling those volumes when retail-ers and distributors need them. Whether or not those traders make a profit hinges on

their ability to earn enough of a mark-up to cover their storage, capital and overhead costs. Therefore, generating a profit is not a guarantee. Traders, unlike brokers, actu-ally take physical and financial possession of the products they trade, whereas brokers serve only as intermediaries. This distinc-tion requires traders to have a very strong cash position, and significantly increases their overall risk. Traders introduce year-round demand into the market when, if end user demand were the only demand in the marketplace, it simply wouldnt exist. This liquidity serves both buyers and sellers in that it enables producers to more efficiently

build supply, and allows buyers to more ac-curately predict available supplies. In most cases, liquidity contributes to more stable, predictable commodity prices.

Difference and ChallengesThere are aspects of the wood pel-

let market that contribute to making true commodity status elusive. Many inside the industry point to the ongoing struggle to unify and harmonize the sustainabil-ity requirements to which pellet producers must comply as the largest impediment to greater marketplace efficiency. In nearly all instances, the buyers of industrial-grade wood pellets are doing so as a means of complying with a renewable energy or low-carbon mandate, and the regulators and citizens they report to want assurances that users of the funds being used to subsidize use of pellets are accomplishing sustain-ability goals. The result is a patchwork of certification schemes that have fragmented the global market into a number of much smaller markets, and created a situation in which a shipload of pellets cannot be traded freely between buyers. There are such varying requirements globally, even in Europe, and until there is some consensus there, this will continue to be a barrier for the efficient trading of wood pellets, says Murray. This is what the Sustainable Bio-mass Partnership was set up for, but so far

U.S. Export Volumes and Values of Common Commodities (2015)Commodity Exports in Metric Tons Trade Value (US$)

Soybeans 48,231,077 $18,963,406,489 Corn 44,654,593 $8,699,738,118

Cotton - $5,880,723,593 Coal 72,761,756 $5,671,655,193Wheat 21,047,679 $5,577,498,970

Pork 1,506,778 $4,019,415,369

Beef 310,043 $2,652,291,637

Wood pellets 4,575,696 $682,667,592

Iron ore 8,157,231 $653,667,592

Wood pulp 87,652 $40,630,045 Source: UN Comtrade database

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While Bush shares Murrays and the in-dustrys concerns about the number of cer-tification schemes out there, he differs with their conclusions, and suggests that while they do introduce challenges, and that mea-sures should be taken to harmonize them when possible, the number of programs is less problematic than the overall volumes and number of buyers looking for pellets certified inside of each of these programs. I still say that underlying all of these chal-lenges is the volume, Bush says. If the market were 10 times larger, youd have 10 times more volume in each category. But right now, it is still a fragmented market, mostly because there are so many specifica-tions and certifications out there that each end user requires. Its really just a volume issue; a volume of trades issue, not volume in tonnage.

For now, the vast majority of pellets made by Murrays producers never even enter the spot market. Murray tells Biomass Magazine that its probable 90 percent of the volume that Canada exports is sold un-

der long-term contracts. Pellet volumes pro-duced in the American Southeast are also largely sold to customers under long-term contracts, and while the value of the U.S. dollar and two consecutive warm winters in Europe has all but eliminated opportunities for U.S. producers within the sport market, those looking to move some discretionary volume are hungry for greater liquidity.

While opinions on the way to get there vary, all participants in the wood pellet mar-ket, in any market, want the same thing: options. Options offer all parties leverage. More buyers and the freedom to sell prod-uct to those buyers, unencumbered by vary-ing sustainability requirements, gives pro-ducers options. In the same way, a healthy marketplace with adequate, uniform supply allows buyers to distribute their inbound purchases across many different suppliers, and hedge against price fluctuations or sup-ply interruptions caused by an unforeseen production outage at a single manufacturer, or weather interruptions.

For the worlds biggest commodities, these conditions are taken for granted. A buyer suddenly in need of a 25,000 tons of corn would have no trouble securing it, and without question, would entertain offers from innumerable sellers. In some ways, this is a function of the size of the global mar-ket, but pellets must also answer questions different than those of corn customers. For this reason, there are additional layers of complexity introduced to the equation. The work to streamline these challenges is well underway, but for now, producers find themselves managing a fragmented market, and traders like Bush work to smooth out the rough edges.

For Bush, the end game is clear. Our perfect pellet, he adds, is one that we can buy and then sell into any market.

Author: Tim PortzExecutive Editor, Biomass Magazine

[email protected]

PELLETS


Georgias Randolph County has much to offer a pellet mill or renewable fuel plant developer.BY D. F. WALLIS

Stemming back several years, the Eco-nomic Development Authority in southwest Georgias Randolph Coun-ty has striven to identify the economic strengths of the area and industries that could take advantage of them. Given the countys rich history of farming and timber harvesting, these activities have been the focus of the EDAs ef-forts. Armed with a good understanding of the large timber basket and an excellent undevel-oped site, the EDA has been working to attract companies engaged in producing wood fuel pellets and liquid transportation fuels.

The benefits to the community could be significant, in both added tax base and addi-tional employment. Total direct investment has potential to reach $400 million to $500 million, and the manufacturing facilities would each employ 60 to 80 people. However, the greatest

benefit to the region would be logging crews reaching into the hundreds, with thousands of direct and indirect jobs created. Added to all of this is expansion of the business community, supporting both the manufacturing operations and expanded population.

Opportunity here is great. And perhaps the most pressing questionhow much excess growth is available of the regions most abun-dant natural resource (trees), is availablehas already been answered, via a study completed by the Georgia Forestry Commission.

Gauging ResourcesIn 2012, The Georgia Forestry Commis-

sion completed a study, the results of which were very encouraging, showing the annual timberland growth over removal is 4.7 mil-lion tons. From a landowner perspective, this

means that timber prices are down. However, from the emerging biomass-to-energy industry perspective, it represents a very large raw mate-rial base that can be used to produce wood fuel pellets and liquid transportation fuels such as gasoline and diesel.

The EDA has an undeveloped site that ap-pears ideal for both a pellet mill and a renewable fuels facility. The property is located just north of Cuthbert on the east side of U.S. Highway 27 where the railroad crosses the highway. The site and area infrastructure (railroad, highways, wastewater treatment plant, and high-pressure natural gas pipeline) can meet or be modified as needed to support any large-scale manufac-turing operation that utilizes trees and other biomass as raw material.

Based on the very positive results of the Forestry Commission study and the availability

Assessing Advantage in Randolph County

CONTRIBUTION: The claims and statements made in this article belong exclusively to the author(s) and do not necessarily reflect the views of Biomass Magazineor its advertisers. All questions pertaining to this article should be directed to the author(s).

A view from across Phillip's Pond, a privately owned, 150-acre lake near Cuthbert, Georgia, shows a robust forestry plantation.


PELLET

of an excellent undeveloped industrial site, the EDA has been working to engage the interest of companies in the biomass conversion busi-ness.

Community leadership has been working to understand what is needed to manage the impacted community infrastructure required to support these types of companies. A number of preliminary engineering studies have been done to assess the cost of providing natural gas, water for fire suppression, additional land, and roadway expansion to handle the large number of logging trucks that would deliver raw mate-rial daily. Because of this work, its now pos-sible to show the companies that not only are infrastructure and raw material available, but that the community is proactive and supportive of industrial growth in the area.

The Georgia Forestry Commission study, Forest Resource Analysis for Cuthbert, Geor-gia, substantiated the viability of provid-ing wood as a raw material on a large scale. As aforementioned, it showed that excess of timber growth over removals is estimated at 4.7 million tons annually. This excess is large enough to support the raw material needs of both a pellet mill and a renewable fuels refinery, still leaving in excess of 2 million tons available annually. There is a good supply of softwood and hardwood within an economic radius of 60 miles for harvesting and delivering to the manu-facturing site. Of the 4.7 million tons, 3.1 mil-lion is softwood and 1.6 million is hardwood. It is also significant that over 95 percent of the timberland is privately owned, which ensures numerous timber purchasing sources. It was noted in the study that there is a good balance in age class for the pine, which would provide a balanced harvest profile in the future. Almost all of the pine growth is

2016 april biomass magazine

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