2021 Issue 1 - Biomass Magazine by BBI International

Issue 1, 2021

RESIDUAL ADVANTAGE Sawmill and Pellet Plant Strategies PAGE 14

PLUS: Biomass Ash Handling Redesign PAGE 26

Q4 Forisk Wood Fiber Review PAGE 24

BiomassMagazine.com

BIOMASSMAGAZINE.COM 1

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2021 ISSUE 1 | VOLUME 15

FEATURES 14 PROJECT DEVELOPMENT Sawdust Strategies With several possible models, the use of sawmill residue for pellet production oﬀers advantages. By Anna Simet

COLUMNS

04 EDITOR’S NOTE New Year, New Administration and the Pandemic Backend By Anna Simet

06 Reading the Tea Leaves: Biden’s Approach to Biomass Policy By Carrie Annand

07 Hard Work Pays Oﬀ By Bill Bell

08 Guidance on the Tax Credit for High-Eﬃciency Wood Heaters By John Ackerly

DEPARTMENTS

05 EVENTS 10 35

BUSINESS BRIEFS MARKETPLACE

ON THE COVER

Pinnacle Renewable Energy's Aliceville, Alabama, wood pellet plant is jointly owned by Pinnacle (70%), Westervelt (20%) and Two Rivers Lumber Co. (10%). The facility's nameplate capacity is 360,000 metric tons per year. Several local sawmills supply residuals to the mill. PHOTO: PINNACLE RENEWABLE ENERGY

20 EVENT All Things Biomass From Your Desktop

Being held virtually in 2021, the International Biomass Conference & Expo will feature more than 80 industry experts discussing the latest in biomass pellets and densified biomass, biomass power and thermal, biogas and renewable natural gas, and advanced biofuels. By Anna Simet

CONTRIBUTIONS 24 FIBER Forisk Wood Fiber Review: U.S. Northwest

Continued high lumber prices encouraged sawmills to maintain aggressive production levels, further increasing residual chip supplies in the region. By Andrew Copley

26 ENGINEERING Getting Biomass Ash to Flow Again

A project at Dominion Energy’s Altavista, Hopewell and Southampton power stations solved the facilities’ biomass fly ash handling challenges. By Jayant Khambekar, Josh Marion and Riad Dandan

30 MARKETS 2021: Major Changes to Japanese Biomass Market

The Japanese biomass market is on the cusp of some major developments that will change the dynamics of the market in the coming years. By Rachael Levinson

32 POLICY Strategy for Biden Administration to Fight Climate Change Existing U.S. coal power stations can be part of the transition to a low-carbon economy. By William Strauss

Biomass Magazine: (USPS No. 5336, ISSN 21690405) Copyright © 2021 by BBI International is published quarterly by BBI International, 308 Second Avenue North, Suite 304, Grand Forks, ND 58203. Six issues per year. Business and Editorial Offices: 308 Second Avenue North, Suite 304, Grand Forks, ND 58203. Accounting and Circulation Offices: BBI International 308 Second Avenue North, Suite 304, Grand Forks, ND 58203. Call (701) 746-8385 to subscribe. Periodicals postage paid at Grand Forks, ND and additional mailing offices. POSTMASTER: Send address changes to Biomass Magazine/Subscriptions, 308 Second Avenue North, Suite 304, Grand Forks, ND 58203.

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¦EDITOR’S NOTE

A New Year, New Administration and the Pandemic Backend When the pandemic hit the U.S. in late winter of last year, our team at BBI International and Biomass Magazine had just held the International Biomass Conference & Expo in Nashville, Tennessee. At the time, I had read a few news articles about COVID-19, but I really wasn't concerned about being affected. Suffice to say, I think everyone at the conference—which was upward of 800 people—would have been shocked to discover that, next year, they would be joining virtually to avoid the spread of a disease that has impacted the entire ANNA SIMET world. But with all of us well into the swing of Zoom, Google Meet EDITOR asimet@bbiinternational.com and Skype, we’re very confident that year’s conference, in its virtual platform, has so much to offer. If you’re interested in learning more, check out the event preview, “All Things Biomass From Your Desktop,” on page 20. Moving on to other topics covered in this issue, focused on project development, you’ll find feature article “Sawdust Strategies” on page 14, which discusses sourcing residuals from sawmills for pellet production. Whether built on-site by the sawmill itself, a colocated joint venture of a sawmill and a developer, or a supply contract between an offsite pellet producer and a sawmill, using this material for pellet production offers numerous advantages. These include, but aren't limited to, a lower carbon footprint, minimal or zero transportation costs, and no drying costs for this material. Apart from the benefits, however, there are some potential risks involved. John Swaan, one of the industry experts I spoke with, said that risk lies mainly within being dependent on an industry that has ups and downs, so the value of a “Plan B,” or finding a way to mitigate that risk, could be crucial. On the note of fiber, you’ll find Forisk’s Wood Fiber Review on page 24. In this quarter’s exclusive preview, author Andrew Copley covers the U.S. Northwest, discussing implications of the fire season and pandemic, lumber prices and downstream effects on residual chip prices, and a sawdust glut flattening prices in every region. The final article I’ll touch on is “Getting Biomass Ash to Flow Again,” which details work done by Jenike and Johansen at three Dominion Energy biomass power plants. This technical article discusses some problems each of the facilities was having with their ash silos and how they were resolved. With more power stations evaluating their options in a low-carbon future—in fact, all three plants were converted from coal— engineering solutions like those detailed in this article will be increasingly required. As I write this, we’re less than a week out from the inauguration of President-elect Joe Biden, and as with most administration transitions, there remains some uncertainty as to what’s in store for sectors such as ours. We’ll be discussing that with our industry leaders general session roundtable during the virtual International Biomass Conference & Expo, and we look forward to answering questions and bringing you some fresh and insightful perspective for 2021 and beyond.

4 BIOMASS MAGAZINE | ISSUE 1, 2021

EDITORIAL EDITOR Anna Simet asimet@bbiinternational.com ONLINE NEWS EDITOR Erin Voegele evoegele@bbiinternational.com

ART VICE PRESIDENT, PRODUCTION & DESIGN Jaci Satterlund jsatterlund@bbiinternational.com GRAPHIC DESIGNER Raquel Boushee rboushee@bbiinternational.com

PUBLISHING & SALES CEO Joe Bryan jbryan@bbiinternational.com PRESIDENT Tom Bryan tbryan@bbiinternational.com VICE PRESIDENT, OPERATIONS/ MARKETING & SALES John Nelson jnelson@bbiinternational.com BUSINESS DEVELOPMENT DIRECTOR Howard Brockhouse hbrockhouse@bbiinternational.com SENIOR ACCOUNT MANAGER Chip Shereck cshereck@bbiinternational.com JR. ACCOUNT MANAGER Josh Bergrud jbergrud@bbiinternational.com CIRCULATION MANAGER Jessica Tiller jtiller@bbiinternational.com MARKETING & ADVERTISING MANAGER Marla DeFoe mdefoe@bbiinternational.com SOCIAL MEDIA & MARKETING COORDINATOR Dayna Bastian dbastian@bbiinternational.com

Subscriptions Biomass Magazine is free of charge to everyone with the exception of a shipping and handling charge 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 service@bbiinternational.com. Advertising Biomass Magazine provides a specific topic delivered to a highly targeted audience. We are committed to editorial excellence and high-quality print production. To find out more about Biomass Magazine advertising opportunities, please contact us at 701-746-8385 or service@bbiinternational.com. Letters to the Editor We welcome letters to the editor. Send to Biomass Magazine Letters to the Editor, 308 2nd Ave. N., Suite 304, Grand Forks, ND 58203 or email to asimet@bbiinternational. com. Please include your name, address and phone number. Letters may be edited for clarity and/or space.

INDUSTRY EVENTS¦

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Entering its 14th year, the International Biomass Conference & Expo is expected to bring together more than 900 attendees, 125 exhibitors and 100 speakers from more than 40 countries. It is the largest gathering of biomass professionals and academics in the world. The conference provides relevant content and unparalleled networking opportunities in a dynamic business-to-business environment. In addition to abundant networking opportunities, the largest biomass conference in the world is renowned for its outstanding programming—powered by Biomass Magazine—that maintains a strong focus on commercial-scale biomass production, new technology, and near-term research and development. Join us at the International Biomass Conference & Expo as we enter this new and exciting era in biomass energy. 866.746.8385 | BiomassConference.com

2021 Int'l Fuel Ethanol Workshop & Expo JULY 13-15, 2021

Minneapolis Convention Center Minneapolis, Minnesota From its inception, the mission of this event has remained constant: The FEW delivers timely presentations with a strong focus on commercial-scale ethanol production—from quality control and yield maximization to regulatory compliance and fiscal management. The FEW is the ethanol industry’s premier forum for unveiling new technologies and research findings. The program is primarily focused on optimizing grain ethanol operations while also covering cellulosic and advanced ethanol technologies. 866.746.8385 | FuelEthanolWorkshop.com

2021 Biodiesel Production Technology Summit JULY 13-15, 2021

Minneapolis Convention Center Minneapolis, Minnesota The Biodiesel Production Technology Summit, a track at the International Fuel Ethanol Workshop & Expo, is a forum designed for biodiesel and renewable diesel producers to learn about cutting-edge process technologies, new techniques and equipment to optimize existing production, and efficiencies to save money while increasing throughput and fuel quality. Produced by Biodiesel Magazine, this world-class event features premium content with one purpose—to further the biomass-based diesel sector beyond its current limitations. 866.746.8385 | FuelEthanolWorkshop.com/Biodiesel.html

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Reading the Tea Leaves: Biden’s Approach to Biomass Policy BY CARRIE ANNAND

It has been an eventful few months since our last Biomass Magazine column, to say the least. Our country has a new administration, led by President Joe Biden, along with a Democratic House and Senate. We anticipate many opportunities for pro-biomass policy during the next two years, supported by the policy papers distributed by the Biden campaign and transition team. Below, we outline a few policy priorities for the biomass industry, and how we hope to engage with the incoming administration and Congress on these issues. Electricity in the RFS. First and foremost, the Biomass Power Association, along with the RFS Power Coalition, seeks immediate inclusion of electricity generated from Renewable Fuel Standard-approved feedstocks in the RFS. We will be pursuing a settlement to our litigation challenging the U.S. EPA’s lack of electricity in its 2019 renewable volume obligation. The Biden administration has placed a strong emphasis on providing more widespread access to electric transportation, as well as identifying administrative actions that can be undertaken without congressional acts. We believe that including electricity in the RFS fits squarely into both of these categories. Electric vehicles require electricity from nonfossil sources to achieve their full carbon savings potential, and the Biden administration has the authority to direct the EPA to begin processing applications from electricity producers. Add to that the litigation pending in the D.C. Circuit Court of Appeals and numerous bills awaiting introduction in Congress, and there is plenty of motivation for the Biden administration to press forward in implementing eRINs right away. Biomass as a forest fire reduction tool. The Biden administration has named Tom Vilsack as its nominee to lead the U.S. Department of Agriculture. His name might sound familiar because he was the agriculture sec-

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retary during the Obama administration. With his previous experience, Vilsack is well aware of the benefits of supporting wood utilization, including biomass power, as a tool to manage forests and reduce the risk of catastrophic wildfires. Under his leadership, Biomass Power Association signed a memorandum of understanding with the U.S. Forest Service on support for wood energy. The Biden transition team’s Climate 21 Project memo outlining its policy priorities also explicitly spells out support for increased use of bioenergy, stating: “USDA has enormous and underappreciated discretionary financial resources and agency expertise that enable the agency to… promote sustainable bioenergy, wood products and other biobased materials.” Carbon capture proliferation: With a very small Senate majority margin, it’s unlikely that we will see bold climate bills along the lines of the Green New Deal being proposed. However, carbon capture, utilization and storage is one area of significant agreement between Republicans and Democrats. We expect to see legislation supported by the Biden administration that channels funding into carbon capture research and development, as well as pilot projects for adapting CCUS to various energy technologies. Finally, on an unrelated note, I’d like to mention something BPA is working on that could help all biomass power producers. If you, like many of our members, have seen your insurance premiums raised significantly in recent years, we are working on a way for you to obtain access to a more affordable policy. If you have any questions, please reach out to me. Contract: Carrie Annand Executive Director, Biomass Power Association carrie@usabiomass.org www.usabiomass.org

Hard Work Pays Off BY BILL BELL

“I Feel Like Something Could Happen,” Tom Petty, 1994. Nearly eight years ago, “An Act to Include Useful Thermal Energy as a Renewable Energy Source” was placed before the Maine legislature by State Sen. Troy Jackson. This followed New Hampshire’s inclusion of thermal energy in the state's renewable energy credit (REC) program a year earlier. That bill, scaled back to a simple request for “study” by Maine’s Public Utilities Commission, was vetoed by our then-govenor, to whom renewable energy was suspect. Two years later, Maine’s legislature established a biomass study commission, which recommended adding thermal renewable energy credits to the state’s REC program. That recommendation was kicked down the road year after year until 2019, when at our new governor’s urging, the legislature dramatically expanded Maine’s Renewable Energy Portfolio and added biomass-generated thermal energy to the mix. Details were left to the Maine Public Utilities Commission. This past year, the PUC rejected attempts to add heat pumps—which would have grabbed all the funds—to the thermal renewable energy credits (TRECs) and adopted virtually all of our industry’s recommendations. The Maine Pellet Fuel Association’s annual meeting in December was informed that the thermal REC stands to provide a homeowner using a pellet boiler with $1,300 in annual income; an average high school with a chip boiler could receive $40,000 in annual revenue. In essence, the TREC program can reduce the cost of wood pellets to a new customer by $77 per ton. So what turned the steadily receding tide? First, a new governor and legislature, including our sponsor, Troy Jackson, as Senate president. Second, changes in Maine’s forest products sector, now faced with a surplus of low-value wood and looking to biomass heating as a market. Third,

agreement among our association’s pellet manufacturers and pellet heating equipment firm to finance and maintain an active and effective legislative counsel presence in our state capitol. Fourth, steadfast understanding and support of our sector by our governor’s new legislative director, a former Nature Conservancy of Maine executive, who was a member of legislature’s biomass study commission. Finally, the expertise of the Maine Pellet Fuels Association Director, Charlie Niebling of Innovative Natural Resolution Solutions. His understanding of the TRECs in place in New Hampshire and Massachusetts was vital in persuading Maine legislators to support our initiative. In the meantime, with the assistance of a prominent Boston lobbing firm founded by the oldest son of former U.S. Speaker of the House “Tip” O’Neill, pellet heating advocates were working successfully to get the attention of U.S. Representative “Richie” Neal of Springfield, Massachusetts, the newly named chair of the House Ways and Means Committee. With strong support voiced by the House members from the three northern New England states, Rep. Neal’s committee, for the first time, provided language extending to modern wood heating the same federal tax incentives that have been accorded to other renewable energy systems for years. Such legislation, known as the “BTU Act,” had for almost 10 years been championed by Sens. King and Collins of Maine, as well as the senators from New Hampshire and some other northern forestry states. But it had never gained traction in the House. To be included in the Ways and Means Committee’s “Green Act” (not to be confused with the more controversial “Green New Deal”) was a huge breakthrough. Author: Bill Bell Executive Director, Maine Pellet Fuels Association billb@mepfa.org www.mepfa.org

BIOMASSMAGAZINE.COM 7

Guidance on the Tax Credit for High-Efficiency Wood Heaters BY JOHN ACKERLY

At the end of 2020, Congress passed an omnibus relief package that included numerous provisions on renewable energy and energy efficiency. Among those was the inclusion of biomass heaters in section 25(D) of the IRS tax code, the investment tax credit (ITC) that has applied to residential solar panels. The technical term used in the omnibus bill is “qualified biomass fuel property expenditures,” which is defined as “the burning of biomass fuel to heat a dwelling unit located in the United States and used as a residence by the taxpayer, or to heat water for use in such a dwelling unit, and which has a thermal efficiency rating of at least 75 percent (measured by the higher heating value of the fuel).” Congress removed biomass stoves from section 25(C), which had provided a $300 tax credit up until Dec. 31, to prevent a “double benefit,” or double dipping under two sections of the tax code. The credit is set at 26% of the installed cost for 2021 and 2022, then drops down to 22% in 2023. It is set to disappear altogether in 2024 unless extended, which is common. Much of the guidance the IRS is expected to issue about wood heaters is noncontroversial and will likely be consistent with solar. But there is one distinct issue that has plagued this industry in the past: How is 75% efficient at the higher heating value defined, and how much leeway do manufacturers have to stretch the meaning? Congress stipulated that it must be HHV, but the final language did not say that the EPA list of certified heaters is the definitive way to determine efficiency, although that is almost certainly what the IRS will allow. There is no other consistent, reliable way for retailers and consumers to know which heaters are actually 75% efficient or higher. Over the past seven years, there have been a number of bills and extensive correspondence about strengthening the definition of 75% efficiency and moving wood heaters from section 25(C) to 25(D). The only method that Congress has referred to is using the efficiencies on the EPA list of certified stoves. No other method has been suggested. For instance, the Home Energy Savings Act of 2019 introduced by Sens. Hassan and Collins said: “This section would tighten energy efficiency standards for biomass stoves by requiring the efficiency to be determined in reference to the EPA’s “list of EPA-certified wood stoves, list of EPA-certified hydronic heaters or list of EPA-certified forced-air furnaces.” Biomass stoves, through 2020, would be required to have a thermal efficien8 BIOMASS MAGAZINE | ISSUE 1, 2021

cy rating of at least 73 percent against these tighter standards. After 2020, biomass stoves would be required to have a thermal efficiency rating of at least 75 percent against these tighter standards.” This language was crafted in conjunction with the Biomass Thermal Energy Council, the main architect of the language and the years-long advocacy process. A final effort led by Innovative Natural Resource Solutions culminated in the residential portions of the BTU Act being included in this ominous spending package in December, 2020. The Alliance to Save Energy. American Council for an Energy Efficient Economy, Alliance for Green Heat and HPBA also agreed on parallel language that would have strengthened the efficiency criteria for an enlarged credit under 25(C) by referencing the EPA's database of certified wood and pellet heaters. Until the IRS issues guidance, AGH urges retailers and consumers to rely on the EPA's database of certified heaters to ensure that the heater you install will be eligible for this credit. Anyone who relies on claimed efficiencies in marketing materials should do so at their own risk and be prepared to forgo the tax credit if the stove is labeled under 75% efficient on the EPA list. In 2022, taxpayers will need to fill out IRS Form 5695 to get the new, increased tax credit for installations in 2021. Taxpayers will not need an updated Form 5695 until winter of 2022, when they fill out their 2021 taxes. The current version of IRS Form 5695 is accurate for taking the $300 tax credit under section 25(C) for purchases made in 2019. The new tax credit is for the installed cost, including purchase price, sales tax, labor costs, and items necessary for installation, such as venting and floor protection. AFGH expects the IRS to update current guidance later in 2021 to accommodate issues specific to high-efficiency wood and pellet heaters. They may address, for instance, the cost of sweeping a chimney prior to installing a new heater eligible for the 26% tax credit, or the cost of upgrading floor and wall protection. Some issues are more complicated, such as how to calculate the tax credit when you also received a state rebate or tax incentive, or a rebate or discount from a wood stove change out program. The tax credit should help change out programs offer even greater savings to consumers, and program managers will have to prepare to give advice on it. Contract: John Ackerly President, Alliance for Green Heat jackerly@forgreenheat.org www.forgreenheat.org

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Business Briefs PEOPLE, PRODUCTS & PARTNERSHIPS

High Level Alberta PHOTO: PORT OF TYNE

Port of Tyne invests $1.2 million in wood pellet handling

The Port of Tyne, one of the U.K.’s leading deep-sea ports and a major employer in the region, on Nov. 5 announced a $1.2 million investment in its wood pellet-handling operations. State-of-the-art equipment will be installed and a range of measures put in place to help combat dust emissions from the dry wood pellets it handles. The improvements at Port of Tyne include: DustBosses, which create a continuous water mist spray to prevent dust particles flying into the air; pyramid covers, which enclose the top sections on the eight cargo grabs; skirting on hoppers, which increase airflow and reduce dust emission; and a microfogging system at strategic points within the warehouse and on the ventilation units, making dust fall to the floor. In 2021, the port will also be the only one in the U.K. to have a high-tech water spraying system, which will be installed at the end of the quay.

American Wood Fibers buys former Nature’s Earth Pellets plant

American Wood Fibers Inc. has selected Scotland County, North Carolina, for a new manufacturing site and will create 51 jobs. The company will invest $19.5 million to add new capabilities to a facility previously operated by Nature’s Earth Pellets in Laurinburg. AWF owns and operates 10 production facilities across the U.S., processing over one billion pounds of wood byproducts into animal bedding, pet litter, wood pellets and wood fibers. In Laurinburg, the company will produce wood pellets for fuel, bedding and barbeque markets, installing new equipment to improve the safety, pollution control and overall capacity of the plant. A performance-based grant of $100,000 from the One North Carolina Fund will help facilitate AWF’s expansion in Scotland County.

10 BIOMASS MAGAZINE | ISSUE 1, 2021

Pinnacle begins production at High Level mill

Pinnacle Renewable Energy announced on Dec. 8 it has commenced initial pellet production at its newly constructed facility in High Level, Alberta, which is owned 50% by Pinnacle and 50% by Tolko Industries Ltd. through a limited partnership. The High Level mill further diversifies Pinnacle's supply base using high-quality wood fiber sourced primarily from Tolko's sawmill in High Level. The mill has a projected run-rate capacity of 200,000 metric tons per year. Production will be sold through Pinnacle's contracted backlog of long-term, take-or-pay off-take contracts. Pinnacle is gradually ramping up production at the mill and expects to reach full production in 2021.

Anaergia begins construction of California RNG project

Anaergia Services LLC and veteran impact investing firm North Sky Capital LLC announced the start of construction of a renewable natural gas (RNG) facility at the Victor Valley Wastewater Reclamation Authority, located in San Bernardino County, California. The project will utilize Anaergia’s Omnivore high-solids anaerobic digestion retrofit to triple capacity and increase redundancy of the existing digester infrastructure. Sludge and food waste will be digested to generate biogas that will be conditioned and upgraded into pipeline-quality RNG, utilizing systems designed and supplied by Anaergia affiliates. Anaergia will operate the gas upgrading facility.

BUSINESS BRIEFS¦

Brightmark breaks ground on Sobek RNG project in Florida

Brightmark, a global waste solutions provider, broke ground on the Sobek renewable natural gas (RNG) project on Nov. 13. The project includes construction of new anaerobic digesters at two Larson family dairy farms in Okeechobee County, Florida, owned by Larson Dairy Inc. and JM Larson Inc. Upon completion of the project, the digesters are anticipated to generate about 171,000 MMBtu of RNG annually. The gas will be delivered into the TECO People Gas pipeline system. The project is part of the recently announced joint venture, Brightmark RNG Holdings LLC, a Brightmark platform in partnership with Chevron U.S.A. Inc. Brightmark developed the project, and through the joint venture with Chevron, will own and operate it when construction is complete in 2021.

CPS Energy, VIA announce RNG partnership

CPS Energy and the VIA Metropolitan Transit serving San Antonio, Texas, and surrounding municipalities announced a new fuel supply partnership that will provide renewable natural gas to VIA’s fleet of over 500 buses, beginning in 2021. The announcement highlights CPS Energy’s partnership with the region’s mobility provider to supply renewable fuel for use in its compressed natural gas (CNG) fleet. VIA has a diversified active fleet portfolio consisting of 502 buses powered primarily by CNG fuel, with some diesel-electric hybrid, electric, diesel and propane vehicles in use.

PHOTO: PINE BLUFF FACILITY

Highland closes capital partnership with Orion Energy

Highland Pellets LLC has announced a $135 million strategic capital partnership with Orion Energy Partners L.P. to fund the expansion and upgrade of its existing wood pellet facility in Pine Bluff, Arkansas, as well as provide capital for additional long-term growth initiatives. The facility is supported by a long-term contract with a major European power producer and will be capable of producing up to 675,000 metric tons of wood pellets per year when complete. The Highland facility was initially completed in 2017 and is currently undergoing equipment upgrades to improve operational performance and increase production capacity.

Drax to sell gas assets, use proceeds on biomass initiatives

Drax Group plc reported on Dec. 15 that it has reached an agreement to sell its natural gas-fueled power generation assets. The company said it will use the proceeds from the sale to develop its biomass supply chain and support its plans to become carbon negative by 2030 with a focus on biomass carbon capture and storage (BECCS). CEO Will Gardiner said by using BECCS at the power station in North Yorkshire to underpin the decarbonization of the wider Humber region, Drax believes it would create and support around 50,000 new jobs.

BIOMASSMAGAZINE.COM 11

¦BUSINESS BRIEFS

PHOTO: DOMINION-SMITHFIELD

Dominion Energy, Smithfield Foods complete RNG project in Utah

Dominion Energy and Smithfield Foods Inc., announced on Dec. 9 they have completed the first renewable natural gas (RNG) project through their joint venture, Align Renewable Natural Gas. Located in Milford in southwestern Utah, the project is now producing RNG from a network of 26 family farms that raise hogs under contract with Smithfield. The project is the first large-scale effort in the state to capture methane from hog farming operations and convert it into clean energy for homes, businesses and transportation. At full capacity, the project will produce enough RNG to heat more than 3,000 homes and businesses and reduce annual emissions from participating farms by more than 100,000 metric tons. In the largest venture of its kind in the U.S., Dominion and Smithfield are jointly investing $500 million over the next 10 years to develop RNG projects across the country.

PHOTO: IDEMITSU KOSAN CO. LTD

Idemitsu breaks ground on 50-MW biomass plant in Japan

Japanese energy company Idemitsu Kosan Co. Ltd. held a Nov. 30 groundbreaking ceremony for its 50-MW Tokuyama biomass plant, a facility under development in Shunan City, Yamaguchi Prefecture. The plant is scheduled to be complete in June 2022 and begin commercial operations by December 2022. It will be fueled with imported wood pellets and palm kernel shells, requiring approximately 230,000 metric tons of fuel annually. The project is being developed at a former refinery site and will use existing infrastructure.

BTU Act provisions pass

The $900 billion COVID-19 relief package passed by Congress on Dec. 21 includes provisions of the Biomass Thermal Utilization Act and will enact a three-year investment tax credit (ITC) for high-efficiency home heating equipment that fires wood pellets chips or cordwood. Language for the ITC is contained on page 2,448 of the nearly 5,600-page bill. The credit applies to the installed cost of home heating and hot water systems that utilize wood pellets, chips and cordwood at efficiencies greater than 75 percent. The ITC is for 26 percent in 2021 and phases down to 22 percent in 2022 and 2023.

12 BIOMASS MAGAZINE | ISSUE 1, 2021

PHOTO: KODA ENERGY

Rahr becomes sole owner of Koda Energy

Effective Dec. 4, Rahr Corp. purchased the outstanding 51% of Koda Energy LLC from the Shakopee Mdewakanton Sioux Community, making the combined-heat-and-power plant a wholly owned subsidiary of Rahr. Located on Rahr’s Shakopee, Minnesota, site, Koda Energy generates electricity and heat utilizing agricultural, forestry and biomaterial byproducts, replacing Rahr’s use of natural gas.

IEA predicts growth in bioenergy use for heat, power

Global biomass electricity production capacity expanded by 8.5 gigawatts (GW) in 2019, the second-highest level of annual addition on record, according to the International Energy Agency’s Renewables 2020 report released in early November. China accounted for 60% of the new biomass power capacity installed last year, the majority of which came from energy-from-waste projects. Japan, the next largest market, was onetenth the size of the Chinese market. The IEA forecasts a 16% decline of bioenergy capacity additions this year. According to the agency, 10 nations account for 90% of new capacity last year. Of those countries, China, Brazil, Japan and the U.K. have been most affected by the COVID-19 pandemic. As a result, potential exists for some project delivery delays, the IEA said. Despite the pandemic, there have been no widespread supply disruptions observed for biomass fuels, such as wood chips and wood pellets. The IEA predicts annual bioenergy capacity additions to range from 5-6 GW per year over its short-term forecast period, through 2025.

As for bioenergy for renewable heating, it accounted for nearly 90% of renewable heat consumption last year, including indirect consumption via district heat networks. The agency said it was used predominately in industries that produce biomass waste and residues. Bioenergy for heat is expected to increase by 10% of the 2019 level by 2025, with India and China expected to be responsible for more than half of that growth.

Protos Energy Recovery Facility moves into construction

Covanta Holding Corp., Green Investment Group Ltd. and Biffa plc reported the financial close and commencement of construction on the 49-MW Protos Energy Recovery Facility in Cheshire, England. Covanta and GIG will each own 37.5% of the state-of-the-art energy-from-waste facility, with Biffa, the primary waste supplier for the facility, owning the remaining 25% of the project. The facility will provide up to 400,000 metric tons of annual treatment capacity for nonrecyclable waste.

IMAGE: COVANTA HOLDING CORP.

FUEL | AIR | GAS | ASH processbarron.com 205-663-5330 BIOMASSMAGAZINE.COM 13

¦PROJECT DEVELOPMENT

J.D. Irving Ltd. built a wood pellet manufacturing plant at its sawmill in St. Leonard, New Brunswick, Canada, to utilize its process wood waste. The company now exports pellets to overseas customers via the Port of Belledune. PHOTO: GRAND RIVER PELLETS LTD.

14 BIOMASS MAGAZINE | ISSUE 1, 2021

Sawdust

Strategies Whether a joint venture, solo on-site project or part of a developer’s fiber-sourcing strategy, use of sawmill residue for pellet production presents advantages. BY ANNA SIMET

hen J.D. Irving Ltd. began construction of its 100,000-ton-per-year wood pellet plant in St. Leonard, New Brunswick, in 2018, around 10 percent of the logs processed in its lumber mills ended up in the form of sawdust, shavings and bark. At the time, the company was relying on regional customers to consume those residues, says Nicholas MacGougan, general manager of Grand River Pellets Ltd. “Sometimes, changing markets could make managing the flow of them challenging,” he says. “We had been considering a pellet mill for multiple years and had visited many plants and end users to learn about the industry. The positive business case and adding more value to our residues internally was the catalyst that drove us to move forward with construction.” The $30 million plant, which consumes fiber from the adjacent sawmills and several others in New Brunswick and Maine, took a year to build and now employs roughly 25. It produces home heating pellets as well as industrial fuel exported at the Port of Belledune, where its first overseas shipment set sail for England on Aug. 6. “Wood pellets were a good choice to stabilize the sales volume and add more value to our fiber,” MacGougan says. J.D. Irving is an example of an operation well-positioned to capitalize on its own “waste” through the manufacture of pellets, a common model for sawmills in Europe. There, most pellet plants were built on-site by owners to make use of residual fiber, with product largely sent into the residential heating market. “They were built to deal with the residuals— sawdust, bark, chips, etcetera,” says William Strauss, president of FutureMetrics Inc. “It’s essentially the ‘right’ model for maximizing efficiency in many ways. First, the economics—eliminating the time getting material to pellet plant, and certainly reducing or eliminating the cost of transporting, especially if there is a conveyor from the sawmill to pellet mill. Also, there are environmental efficiencies, and there are some operations that go even further with energy integration between the two.” In North America, the wood pellet industry has developed quite a bit differently than in Europe. “This [on-site model] didn’t happen so much,” Strauss says. “Mostly, pellet mills are independent businesses that are, in some cases, dependent on sawmill by products. Here, it’s a different market that was later to the game.” While some northern pellet plants are colocated with or near sawmills, by and large—and more so in the U.S. than in Canada—roundwood is the predominant feedstock. “Most of the industrial [pellet] mills down south are bringing in

BIOMASSMAGAZINE.COM 15

¦PROJECT DEVELOPMENT roundwood, thinnings and nonmerchantable stems, as they don’t have value as pulp chips,” Strauss says. “In a sense, the Southeast model is that of tree farming—plantations where rows and rows of pine trees are grown, and a lot of byproducts are produced. Way up north, however, there is natural forest.” The industrial pellet facilities in the Southeast are mostly standalone, mainly because there aren’t any single sawmills producing enough byproduct to feed them. There are some instances of colocated scenarios, however, such as Drax’s Hunt Forest Products, which was built next to Hunt Forest Products in Urania, Louisiana. For these large, standalone facilities, being centrally located among many fiber suppliers—including sawmills—makes the most sense. “For these larger plants, feedstock transportation can be 60 or 70 miles, and transportation could be 10 to 15 percent of total production costs,” says John Swaan, wood pellet operations expert. “Any time you go greater distances than 100 kilometers or 75 miles, the economics really start to fall off. You can’t transport material that has 50 percent water in it more than 100 miles—it just doesn’t make sense.” For colocated facilities, drying costs are eliminated, as well as transportation costs. Typically, residues are conveyed right from the sawmill to the pellet facility. Such is the case with Pinnacle Renewable Energy’s Demopolis, Alabama plant, which is under construction at the site of Two Rivers Lumber Co. “As a result, we will get 50%

of the fiber via blow pipe direct from the sawmill,” says Scott Bax, Pinnacle chief operating officer. The pellet plant, which Two Rivers and the Westervelt Co. have minority interests in, is about halfway to completion and is expected to undergo commissioning in late spring or early summer. “The domes are up and inflated, and a lot of the mechanical both equipment and structures are up,” Bax says. “We’re pretty far down the road.” Though not all of Pinnacle’s facilities are right on-site at sawmills, its other 10 plants—eight operating and one under construction in Canada with an additional operating plant in Alabama—all are linked to sawmills, Bax says, with 80 to 85 percent of collective fiber being sourced from them. On top of the bottom line benefits this fiber model, Bax says, reduction of Pinnacle’s carbon footprint is meaningful. And as carbon reduction policies become more stringent, driving down emissions profiles may become paramount for large-scale pellet producers sending product into countries using them a fossil fuel abatement. “The total GHG impact of this type of scenario has a significantly lower carbon footprint than moving it by truck,” Bax adds. And as for the sawmill, when not owned by the pellet manufacturer, they typically get more money for the fiber. “There’s no middle entity, and they’re fundamentally working together to create an outcome that is stronger than if they were making decisions or acting in isolation of each other.”

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Siting Strategy

When it comes to building pellet plants independently, many variables come into play when calculating a potential project’ projected profit margins, such as the price of diesel. When looking at transportation costs, industry experts point to a fiber-sourcing radius of less than 75 miles to maintain profitability. “The cost of diesel fuel is a critical variable,” Strauss says. “A lot is used in the woods for harvesting and gathering, and then in transporting the material. A good chunk of delivered wood costs account for diesel fuel.” Fortunately, prices have been very low in recent years, Strauss adds, and are forecasted to remain so. “The cost to move that fiber should remain relatively low, but it’s still a risk,” he says. “The bigger the pellet mill, the longer the reach for wood.” And, Strauss emphasizes, as carbon policy becomes more refined, that distance will negatively impact the carbon footprint of those pellets. As for how much transportation costs represent in total production costs, it’s a moving target, says Swaan. Swaan, known for his many contributions to the North American wood pellet industry over the past several decades, founded Pacific Bioenergy Corp. in 1994 in partnership with Carrier Lumber. The 350,000-metric-ton plant still operates today in Prince George, British Columbia. “When we first started out, the majority of our costs were for transportation,” Swaan says. “It was anywhere from $2 to $3 per ton for trucking, and we were paying $2 a ton for fiber.”

Grand River Pellets personnel stand outside the production facility, which began operations in 2019. PHOTO: GRAND RIVER PELLETS LTD.

Fast forward about 25 years, the only competitors in B.C. are the pellet producers themselves, Swaan says. “If they overshadow each other in the baskets, or are competing with different suppliers or sawmills, they drive the price up themselves. In that case, the trucking cost is still in the $2 to $3 dollar range, but the actual cost of the fiber could be $40 to $50 [per ton] range.”

BIOMASSMAGAZINE.COM 17

¦PROJECT DEVELOPMENT

Pinnacle Renewable Energy’s Aliceville, Alabama plant is a partnership with Pinnacle (70%); Westervelt (20%) and Two Rivers Lumber (10%). The facility has an annual production capacity of 270,000 metric tons. PHOTO: PINNACLE RENEWABLE ENERGY

According to the U.S. EIA’s Monthly Densified Biomass Fuel Report, in September, approximately 37.1% of fiber used in U.S. wood pellet manufacturing was sawmill residue, 447,315 tons purchased at an average of $30.21 per ton. In the same month in 2019, only 21.9 percent represented sawmill residue, 352,430 tons with a price of $29.43 per ton. Though the September EIA report indicated higher per-ton prices in 2020 than in 2019, industry fiber consultants indicate that in Q4 2020, sawdust prices sunk below 2019 prices. That near 15% increase in sawdust purchasing—nearly 95,000 tons more in 2020 than in 2019—could be attributed to a housing boom parts of the country are experiencing, perhaps one of the few silver linings catalyzed by the ongoing pandemic. “In the Southeast, sawmills are running as hard as they can right now,” Strauss says. “Demand for dimensional lumber has increased, and that’s keeping the sawmills quite busy.” Being dependent on but independent of the sawmilling industry, which has ups and downs, is a risk, Strauss points out. “For example, the availability of fiber in British Columbia has changed because of mountain pine beetle devastation and forest fires,” he says. “A lot of these plants are in areas where the sawmilling areas are taking a downtown because of the aftereffects,” Swaan adds. “As a result, there has been a ratcheting down their allowable cut, and less residues falling through the sawbox floors. The ones that are still efficient performers are staying in play, but because there is 18 BIOMASS MAGAZINE | ISSUE 1, 2021

less fiber to be had, a lot of the plants in B.C. have had to transition into the woods and get access to some of that mountain pine beetle wood standing dead, and fire-damaged materials. That’s much more expensive to take on, and actually doubles their cost compared to just a few years back. Plants next door to larger sawmills, however—especially joint ventures or partnerships—are faring better, Swaan adds. “Those located next door with a deal or joint venture, for these 150,000 and 200,000 [metric ton] plants, they’re produce enough residue to sustain that kind of production,” Strauss says. In some cases, pellet production is eliminating a problem that sawmills might have. “Earlier sawmills were utilizing beehive burners to eliminate their residues,” Swaan says. “In most airsheds today in B.C. and the rest of Canada, they’re not allowed to eliminate it by burning it, so they are forced to find a home for it. If they enter a joint venture like Pinnacle and Tolko, for example, Tolko gets a fairly steady margin for their residues.” A sawmill with nobody to buy its residuals, Strauss points out, has to pay to have somebody take it away. Whether on-site or near a sawmill, or strategically locating near many fiber sources, proximity and transportation is likely to become increasingly analyzed, according to Strauss. “Carbon footprint is becoming a more important metric in pellets—for heating pellets and certainly for industrial pellets, as it already is,” he says. In western Canada and the Southeast U.S., most are exports used in power stations, and the scrutiny of the total carbon impact of is likely to escalate. “Thus, minimizing the carbon footprint as it gets to its designation is critical,” Strauss adds. “With sawmill residuals, its much lower than bringing materials out of the woods to the pellet mill.” Author: Anna Simet Editor, Biomass Magazine asimet@bbiinternational.com 701-738-4961

Pinnacle’s facility just outside of Vernon, British Columbia, is sited at Tolko’s adjacent sawmill. Waste is sent pneumatically directly from the sawmill via blow line (top of image) to the pellet facility, which is jointly owned by Pinnacle and Tolko via a 70-30 partnership. PHOTO: PINNACLE RENEWABLE ENERGY

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¦EVENT

ALL THINGS BIOMASS FROM YOUR DESKTOP

Via an innovative, accessible platform, the International Biomass Conference & Expo will held virtually March 16-17. BY ANNA SIMET

20 BIOMASS MAGAZINE | ISSUE 1, 2021

espite the uncertainty and change that 2020 brought, the broader bioenergy industry has continued business as usual, adapting to change and working through challenges relatively unscathed. In fact, many sectors were quickly deemed as essential businesses that must continue operating during economic shutdowns.

Continuing its annual tradition of uniting the industry’s top experts, advocates, service and technology providers, academia, project developers and other stakeholders, the International Biomass Conference & Expo will take place March 16-17, marking its 14th consecutive year with a virtual event including all components of the traditional in-person event, from the association leader roundtable discussion, to a virtual trade show with online chat and video capabilities, to breakout panel discussions with opportunities to ask presenters live questions. The following is a snapshot of the upcoming event, registration of which is free to producers of biomass heat and power, biogas, renewable natural gas and other biofuels, wood pellets and other densified biomass.

ly include fiber availability and BBQ pellet demand, according to Portz. “Wood pellet manufacturers operate at the mercy of available fiber,” Portz says. “Any expansion of wood pellet demand will put pressure on fiber inventories. That story is always a hyper-local one, but one that is uniquely felt by impacted producers.” It would be difficult to imagine a more disruptive marketplace trend than soaring demand for cooking pellets, Portz adds. “Opportunities are there, but I know the industry and producers are already thinking about strategies to make sure both heating and cooking customer needs are met. For the good of the sector, we’ll need to be sure not to leave anyone out in the cold, so to speak.” As for big ticket items for the biomass power industry, Annand says one is the policy outlook for the next few years. “This includes the USDA wood utilization and bioenergy support, as well as the prognosis for enabling electricity producers to participate in the renewable fuel standard,” she says. When Congress passed the RFS2 in 2007, it included electricity from qualifying renewable fuels as part of the program. However, 14 years later, the U.S. EPA still hasn’t administered the program, disallowing biomass and biogas

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Moderator Anna Simet Editor, Biomass Magazine

Tim Portz Executive Director, Pellet Fuels Institute

The annual association leader industry roundtable discussion, preceded by recognition of the Excellence in Bioenergy and Groundbreaker of the Year Award recipients, has served as the conference’s anchor event. “There’s a lot to talk about,” says Pellet Fuels Institute Executive Director Tim Portz. Portz highlights the recently passed BTU Act—which has been proposed every year for the past decade—as a major discussion topic. Included in the COVID-19 relief package in late December, the BTU Act grants a three-year investment tax credit for high-efficiency home heating equipment that fires wood pellets, chips or cordwood, beginning with 26% in 2021 and phasing down the next two years. “Clearly, this is a tremendous victory for the sector, but now the rubber hits the road,” Portz says. “How does the industry leverage this threeyear window to maximize the long term benefit? Moreover, with appliance sales numbers increasingly difficult to discern, how will fuel manufacturers know and anticipate the increased demand for pellet fuel that results from the credit?” Other topics of interest to wood pellet producers specifical-

Peter Thompson Deputy Director, Biomass Thermal Energy Council

Patrick Serfass Executive Director, American Biogas Council

Carrie Annand Executive Director, Biomass Power Association

Seth Ginther Executive Director, U.S. Industrial Pellet Association

power and waste-to-energy power producers to generate RINs. For a deeper dive into this topic, Biomass Power Association CEO Bob Cleaves will be leading a panel dedicated eRINs, during the 1:30 p.m. biomass power and thermal track on March 16. On biogas and RNG, Serfass says the industry is entering an interesting time. “RNG project development is booming at a time when the focus on renewable electricity is now also growing quickly,” he says. “And these changes are coming right as the politics in Washington are shifting blue. Historically, Democrats have been much more supportive of the renewable energy policy that has produced the fastest growth in the biogas industry. While the margins are thin, the American Biogas Council has expanded our staff to respond to what we hope will many new opportunities federally, and in a handful of states. Following the general session discussion will be two days of track sessions held simultaneously in four different virtual rooms, allowing attendees to customize their content schedule by entering different rooms as they choose. BIOMASSMAGAZINE.COM 21

¦EVENT

Track Sessions

With four categories including pellets and densified biomass, biomass power and thermal, biogas and RNG as well as advanced biofuels and biobased chemicals, streaming track sessions will allow users to submit questions any time via chat to be answered live during or following presentations.

Track 1: Pellets & Densiﬁed Biomass

With nine panels under this category, topics include international and domestic markets, forestry practices, combustible dust, fire and explosion protection, emissions control and environmental compliance, and material handling. The track kicks off with “International Market Outlook for Densified Biomass,” which will feature four experts providing overviews and discussing trends of specific global markets. Speakers include

22 BIOMASS MAGAZINE | ISSUE 1, 2021

the Wood Pellet Association of Canada Executive Director, Gordon Murray, who will provide an overview of the Canadian export market; Esben Vestergaard of RUF Briquetting Systems, who will discuss market possibilities for briquettes from a European perspective; Christiane Egger, deputy manager of Oekoenergie-Cluster, covering widespread heating pellet utilization in Upper Austria, and Annette Bossler, senior market intelligence export at FutureMetrics, who will present an overview of the Japanese pellet market.

Track 2: Biomass Power & Thermal

Perhaps the most versatile track, biomass power and thermal topics include policy and incentives, combustion and boiler innovations, combined-heat-andpower applications, torrefaction and pyrolysis. For those with an interest in biochar, multiple panels will involve the increasing-

ly popular topic, with “Understanding Biochar: Industry Trends and Opportunities” leading a run of panels involving biochar and/or pyrolysis and torrefaction. Experts presenting during this session include Suzanne Allaire, CEO of GECA Environnement, to discuss trends in biochar and biocoal production in North America; Tom Miles, principal of TR Miles Consulting Inc. and executive director of the U.S. Biochar Initiative, to present “New Opportunities for Biochar from Biomass Energy,” and Matt Young, a research engineer and University of Minnesota Duluth–Natural Resources Research Institute, to present “Engineering and Process Considerations when Using an Indirectly Heated Kiln for Biochar Research.”

Track 3: Biogas & RNG

Perhaps the fastest-growing industry sector, biogas and renewable natural gas may be the most increasingly popular

topic at the event. Project developers won’t want to miss the track’s first panel, “RNG Project Development: Knowing the Market and the Rules.” During this well-rounded panel covering key bases of project development, learn about emerging markets for RNG, presented by Brad Pleima, senior engineer at EcoEngineers; the legal components of projects, presented by David Gardels, partner at Hush Blackwell; and the ins and outs of financing a biogas project.

and been pleasantly surprised that exhibitors are able to easily engage in strong conversations with potential customers via live chat, disseminate branding materials, drive customers to their website and ultimately generate strong leads at their virtual booth,” says John Nelson, vice president of operations, sales and marketing at BBI International. “This is all online and digital, so we are able to generate reports and help exhibitors better identify potential custom-

ers during and after the show, because the virtual tradeshow is open for 30 days after the live event is complete.” For more information or to register for the International Biomass Conference & Expo, visit www.biomassconference.com. Author: Anna Simet Editor, Biomass Magazine 701-738-4961 asimet@bbiinternational.com

Track 4: Advanced Biofuels & Biobased Chemicals

With an emphasis on feedstocks and supply chains, topics covered in this concentrated track include biofuel feedstock growth, storage and handling, as well as tools for analyzing biofuel feedstocks, including Carbon-14 testing and engineering supply chains. Unique panel, “How Cellulosic Biofuel Production Can Parlay into Biomass Power,” may be of interest to biofuels, RNG and power stakeholders. The panel includes Jayant Godbole, president of PRAJ Americas Inc., presenting “Simultaneous and Sustainable Production of Cellulosic Ethanol & RNG from Agricultural Residues,” as well as Dane McSpedon, board member at Wilson Biochemical, presenting “Creation of Liquid Biofuels from Organic Fraction of MSW: UK Success,” and James DeSellem, advisory engineer at Babcock & Wilcox, presenting “Unlocking the Combustion Question for a Waste Stream.”

Virtual Trade Show

This year, exhibitors have the opportunity purchase virtual, customizable booths, which allow users to “man” their booths from any location and use the live chat or video function to hold discussions with visitors. “Based on data and feedback we have received from exhibitors from the multiple virtual events we have produced, we have discovered

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20 Douglas-fir Hem-fir Combined Softwood Hardwood

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Figure 1. Pulplog Prices in U.S. Northwest Region 6285&( )25,6. :22' ),%(5 5(9,(:

FORISK WOOD FIBER REVIEW:

U.S. NORTHWEST PRICES IN Q4 2020

Sawmills in the Northwest maintained aggressive production levels in Q4, while softwood chip exports declined, residual chip prices fell, and sawdust prices in every region were on par with those seen in 2018.

BY ANDREW COPLEY

historic fire season remained the dominant story across the U.S. West as landowners assessed damage to timberlands, tried to arrange salvage operations, and planned to recuperate damaged lands. The toll of a destructive 2020 wildfire season is still being tallied, but nearly 2 million acres of forestland in Oregon and Washington alone were within active fire boundaries. While significant areas were on public federal land, private industrial landowners suffered more than in previous fire seasons. Logging equipment losses were in the tens of millions of dollars as well, challenging salvage operations. Concerns turned toward recovery and the massive seedling demand needed to replant acres. Expectations for years of seed-

ling shortages concern landowners as most Douglas-fir seedings require a two-year production cycle. Continued high lumber prices encouraged sawmills to maintain aggressive production levels, further increasing residual chip supplies in the region. This increased residual chip production met a decline in softwood chip exports and a stagnant wood pellet sector. Demand from the pulp and paper sector remained uneven—the pandemic deteriorated market conditions for printing and writing paper and accelerated newsprint’s decline, while increasing demand for containerboard, paper packaging and tissue. Still, many regional pulp mills, which had deferred or extended outages, were back to normal operations.

Softwood pulp log demand remained low as residual chip volumes continued to displace higher-cost pulp logs. Price impacts were greatest in western Oregon, reducing northward into Washington. Quarter-over-quarter prices fell an additional 3-6% for Hem-fir and Douglas-fir (Figure 1). Year-over-year, both Douglas-fir and Hem-fir pulp log prices fell 19%. In contrast, hardwood pulp logs—which remain a small part of the Northwest fiber story—trended sharply higher. As landowners and contractors raced to salvage burned areas, hardwood supply was challenged. Shrinking availability pushed prices higher, up 10% for the quarter and 17% year-over-year. Residual chip prices west of the Cascades continued to fall for the second consecutive quarter as high lumber production generated healthy volumes of residual chips and pulp mill demand remained uneven. Prices fell less in Q4 than in Q3 as several pulp mills resumed operations following outages. East of the Cascades, chip prices were mostly flat. Historically, Q4 pricing trends upward across the Northwest, highlighting the continued unusual nature of 2020. Residual chip prices fell more than wholelog chips for the quarter and the year. Prices west of the Cascades were down over 20% year-over-year for residual chips. Puget Sound whole-log chips suffered the greatest decline for the quarter, ending the year down 19% from Q4 2019 (Figure 2). Whole-log chips in other Northwest subregions fell 7-11% yearover-year. The spread between residual and whole-log chips widened materially over the course of 2020, ballooning from $4 to $6 in the Lower Columbia River and Willamette Valley at the end of 2019 to $15 to $21 in Q4 2020. Pulp mills continued to honor commitments for whole-log chips but widening price differentials highlight why the product mix is shifting toward residuals. Softwood chip exports remained low, further limiting markets for excess sawmill chips. Exports from the Northwest, historically the largest softwood chip exporting region in the U.S. with volumes concentrated to Japan, declined 24% year-over-year through November.

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

24 BIOMASS MAGAZINE | ISSUE 1, 2021

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Export volumes trended higher toward the end of the year, however, with declining export chip inventories providing a hopeful sign for reducing the current glut of residual chips. Sawdust prices were flat to down in Q4. Significant volumes were reportedly burned in boilers amidst the glut. A longer-term view highlights that the past two quarters erased sawdust price increases from the preceding 18 months. Sawdust prices in every region were on par with those seen in 2018. While green shavings prices moved similarly to sawdust, dry shavings were finding homes in pellet plants, in final product mixes, or as fuel, which provided moderate price growth west of the Cascades. While U.S. wood pellet capacity continues to increase, driven by export-oriented projects, the sector remained stagnant in the U.S. West. The region’s production capacity, which represents approximately 6% of total U.S. wood pellet capacity, serves the domestic home heating market and oscillated around 1 million metric tons for well over a decade. Near-term global demand for industrial wood pellets con-

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tinues to increase, however. As new demand for industrial wood pellets in Europe slowed, growth prospects shifted to Asia, providing the U.S. West a logistical advantage. Japan expects to be the largest importer of wood pellets in Asia, with demand growing more than 270% to 7.5 million metric tons by

2025. Enviva, the world’s largest pellet producer by capacity, noted that around 50% of its offtake contracts will be with Japanese customers by 2025. Author: Andrew Copley Forisk Consulting LLC 770-725-8477 acopley@forisk.com

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PHOTO: JENIKE & JOHANSON INC.

GETTING BIOMASS ASH TO FLOW AGAIN

A project at Dominion Energy’s Altavista, Hopewell and Southampton power stations solved the facilities’ biomass fly ash handling challenges. BY JAYANT KHAMBEKAR, JOSH MARION AND RIAD DANDAN

odern power stations are increasingly looking at renewable fuel sources such as biomass. While using biomass as fuel provides several benefits, the combustion ash can be particularly challenging to handle compared to the typical ash from coal combustion. Biomass fly ash can be highly cohesive and frictional, and can set up in the silo like concrete. To solve ongoing issues related to fly ash, three power stations operated by Dominion Energy followed a

systematic and scientific approach to design biomass fly ash handling systems that provide reliable flow. Dominion Energy is one of the major power generation companies in the U.S. At Dominion, focus is always on progress and using the latest scientific technology to do things in an improved manner. Recognizing the need of time, Dominion converted three of its existing coal-fired power stations in Virginia—the Altavista, Hopewell and Southampton Power Stations—to 100%

Figure 1: Original fly ash unloading silo (top); arrangement below the silo outlet (bottom). PHOTO: JENIKE & JOHANSON INC.

biomass fuel. These facilities use wood chips and waste wood as fuel and each can produce up to 51 MW of electricity. The three stations have similar biomass handling systems. At each of them, fly ash generated is first collected in ash hoppers and is then pneumatically conveyed into an ash unloading silo. The ash is fed into the unloading silo at temperatures between 250 and 300 degrees Fahrenheit and then sits in the silo until a truck arrives at the site. The storage time without discharge can vary from four hours up to two days. The original ash unloading silo’s intended use was for coal fly ash. It consisted of a 26-foot diameter cylinder section, followed by a conical hopper (made from carbon steel—no liner) that converged at 36 degrees

26 BIOMASS MAGAZINE | ISSUE 1, 2021

from vertical to a 14-inch OD outlet. Below the silo was a slide gate and a double flap valve that discharged ash into a “conditioner” before it was unloaded into trucks. The desired fly ash discharge rate from the silo was about 6,000 pounds per hour. As a result of its temperature, consolidation pressure in the silo, storage time without discharge, ash moisture content and the presence of reagents, the ash frequently set up in the silo. It also arched and ratholed over the silo outlet. This had been a persistent problem at all three power stations. Dominion needed to rely on air cannons and air lances to break the arches and restart flow. While these flow aids provided some help, they were not able to resolve the issue. These ash flow problems were resulting in frequent manual intervention, inconsistent flow to the ash conditioner and long waiting times for truck unloading. In addition, during periods of high fuel moisture, the unburned carbon content of fly ash increased. Coupled with the air leaks to the baghouse hoppers and pneumatic conveying system of ash, extremely high-temperature (greater than 1,000 degrees F) clinkers would form in the baghouse hoppers and the fly ash silos, further complicating the material buildup issue. Dominion recognized the need for a scientific approach to solve this problem, and in 2015, contracted Jenike & Johanson Inc. to address the flow problems in the ash unloading silos at these three stations. Riad Dandan, balance of plant systems engineer from Dominion’s headquarters in Richmond, Virginia, was involved throughout the project and was instrumental in identifying the problems and providing project direction, as were numerous personnel from the three power stations.

Bulk Solids Handling Fundamentals

Before presenting analysis of the problems with the fly ash silo, it is helpful to understand some of the fundamentals of material flow in a silo. There are two primary flow patterns that can develop in a silo during discharge: funnel flow and mass flow. In funnel flow, an active flow channel forms above the hopper outlet, with stagnant material at the periphery. As the level

of material in the silo decreases, material from stagnant regions may or may not slide into the flowing channel, depending on the bulk solid’s cohesive strength. When the bulk solid has sufficient cohesive strength, the stagnant material does not slide into the flow channel, which results in the formation of a stable rathole. In addition to flow stoppages that occur as a consequence of ratholing, funnel flow results in a first-in, last-out flow sequence, and allows flooding if fine powders such as the biomass fly ash are filled into a rathole, or if a rathole collapses. In mass flow, the material is in motion whenever any is withdrawn from the hopper. Material from the center, as well as the periphery, moves toward the outlet. Mass flow hoppers provide a first-in, firstout flow sequence, eliminate stagnant material and provide a steady discharge with a consistent bulk density and flow that is uniform and well controlled. Requirements for achieving mass flow include sizing the outlet large enough to prevent arching and ensuring the hopper walls have sufficiently low (material/surface boundary) friction and are steep enough to achieve flow at the walls. It is critical to note that the flow pattern in a hopper is strongly influenced by the feeder below the hopper. Ultimately, a feeder should accomplish the following: 1. Provide reliable and uninterrupted flow of material from the silo above. 2. Control discharge rate from a silo, achieving the required rate while preventing flooding. 3. Remove material from the entire cross section of the hopper outlet to avoid interfering with mass flow in the silo above. If a screw feeder has constant pitch (Figure 2, top image), the first pitch will fill up and subsequent pitches will be unable to accept more material. As a result, material will flow through one small preferential channel above the first pitch, creating the potential for ratholing, increasing arching potential and decreasing the maximum flow rate for fine powders. If the screw feeder is properly designed with increasing capacity in the direction of flow (Figure 2, bottom image), it will remove material from the entire cross section of the hopper, and the flow channel will open up.

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¦ENGINEERING

Flow Problems Review, Testing and Analysis

Once contracted by Dominion, as a first step in the process, Jenike conducted a site visit to fully understand the ash flow problems and possible root causes. Dandan and Jayant Khambekar of Jenike visited all three power stations to review the handling systems and identify small differences between these three stations. Based on the review of the existing ash handling, flow issues and possible root causes, Jenike suggested a test program to Dominion. The fly ash flow behavior was sensitive to the “fresh” condition of sample. In other words, if fly ash was tested after shipping the sample to Jenike’s laboratory (a few days after being produced), the flow behavior would not be the same as obtained by testing a fresh sample of the fly ash. Additionally, the fly ash handled at each of the three stations had different flow properties because of differences in fuel sources, and variation in ash moisture content. Furthermore, ammonia content in the ash could also vary. Dominion and Jenike discussed the possible concerns and correspondingly developed a test program that covered the risks. Accordingly, Jenike conducted the testing on-site at at each power station, using fresh samples of biomass fly ash and Jenike’s

Figure 2: Constant pitch screw feeder (top), mass flow screw feeder (bottom). PHOTO: JENIKE & JOHANSON INC.

special on-site tester. It was also important to characterize effect of variation in moisture content of fly ash as well as ammonia content. To this end, some testing was also done at Jenike’s laboratory in Tyngsboro, Massachusetts, at representative fly ash temperatures to study the effect of variation in moisture and ammonia contents. Samples from all three stations were tested to identify the

worst-case flow behavior so that a common silo arrangement could be developed to work for all three stations. During this testing, various wall surfaces were evaluated to determine the most suitable wall surface from a reliable material flow perspective. These wall surfaces included 304 stainless steel sheet with a #2B cold-rolled finish, 304 stainless steel sheet with a #4 180 grit finish, WellerCLAD Hypol, and Tivar HOT UHMW-HDPE liner. Test results showed that the biomass fly ash samples were cohesive and frictional. As moisture content of fly ash increased, the materials became significantly more cohesive and prone to buildup and flow stoppages. The materials also got very frictional with increases of ammonia content. Based on the test results, the existing conical hopper walls, at 36 degrees from vertical, were not steep and smooth enough for material to flow along them. Thus, funnel flow discharge was occurring in these silos. Also, the 14-inch-diameter outlet was significantly undersized to prevent ratholing for continuous flow and after storage at rest. It also was not preventing flow stoppages due to cohesive arching at higher moisture contents, or storage at rest for all moisture contents. The test data correctly predicted and validated that frequent flow stoppages would occur with these silos.

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28 BIOMASS MAGAZINE | ISSUE 1, 2021

Corrective Plan

Dominion and Jenike discussed the test results and analysis to determine the most appropriate path forward. Dandan worked with Dominion’s team to discuss possibilities for modification of the existing ash silo arrangement versus a new silo arrangement. Given the challenging flow behavior of the biomass fly ash, Dominion’s storage capacity requirements and tight layout constraints, it was not an easy decision for Dominion. Ultimately, Dominion decided to install a new silo arrangement, provided that it could be located in the same footprint as the existing silo. Using the results of the biomass fly ash testing as the basis, Jenike developed a design of the new silo arrangement common for all three power stations. Given the challenging flow behavior and other constraints, the arrangement recommended utilizing two silos with 11-foot, 6-inch-diameter cylinder sections. Each silo consisted of a conical hopper, a short vertical section and a transition hopper. Based on the test results, 304 stainless steel sheet with a #4 180 grit finish was selected as the liner, in order to promote material flow along the hopper walls. A screw feeder with twin 18-inch-diameter augers was designed below the silo outlet, according to the mass-flow screw design shown in the above image. This promoted activation of

provided by Jenike, ProcessBarron developed the fabrication plan and managed the construction activities, supplied the equipment and oversaw the installation. Once the equipment was fully installed and operational, Dominion conducted test runs that went smoothly.

Performance Results

New silo arrangement installed at Dominion’s power stations PHOTO: JENIKE & JOHANSON INC.

the entire hopper outlet to allow uniform discharge. A slide-gate arrangement was provided above the screw feeder for maintenance purposes. The upstream arrangement above the silos included a common drag chain conveyor to fill both silos. The downstream arrangement below the screw feeder included a chute and rotary airlock to discharge material into the ash conditioner. Based on the silo and the feeder design

After nearly five years of operation, the silos and feeders designed by Jenike have been working very well at all three power stations. Before the modifications, fly ash would set up like concrete in these silos such that at times the stations needed to use large plastic containers for ash storage, and the silo discharge locations needed to be manned to assist material discharge. With the new silo design, all these troubles are gone, and the three power stations are getting their biomass fly ash to flow again. Dominion’s emphasis on progress and on using the latest scientific technology resulted in a successful outcome. This positive experience can also help other power stations using biomass as their fuel and dealing with the challenges of ash handling. Contact: Jayant Khambekar Senior Consultant, Jenike & Johanson Inc. jayant@jenike.com 281-921-1998

BIOMASSMAGAZINE.COM 29

¦MARKETS

2021: MAJOR CHANGES TO THE JAPANESE BIOMASS MARKET The Japanese biomass market is on the cusp of some major developments that will change the dynamics of the market in the coming years.

BY RACHAEL LEVINSON

hile Japanese biomass demand continued strong growth in 2020, upcoming policy changes will impact trade flows, supply and demand. Hawkins Wright estimates Japanese wood pellet demand was 1.8 million metric tons (MT) in 2020, up 20% on the year with little sign of slowing. We forecast wood pellet demand will grow 33% in 2021 and have identified over 4 gigawatts (GW) of woody biomass capacity in the pipeline (Figure 1). Japan’s Ministry of Economy, Trade and Industry has approved nearly 8 GW of woody biomass capacity under the feed-in-tariff (FiT), but many projects are not at an advanced development stage. Not all the 70-plus projects we have identified are expected to make it online, but approximately half are already under construction or financed.

Introduction of Sustainability Criteria

Potential changes to sustainability criteria in Japan could have a significant impact on available palm kernel shell (PSK) supply. METI is considering introducing new criteria for agricultural byproducts, including PKS, and is examining the lifecycle greenhouse gas (GHG) emissions of wood pellets and wood chips. Under the current FiT rules, biomass power project developers are required to provide evidence in their business plans that their feedstocks will be sustainably sourced, legal and traceable. There is no legal requirement, at present, mandating the use of Forest Stewardship

Council or Programme for the Endorsement of Forest Certification-certified wood, but there is a general acceptance—endorsed by lenders—that imported wood pellets should have chain-of-custody systems in place. METI established a biomass sustainability working group to examine the technical aspects of sustainability for agricultural products. It has proposed criteria and recommended which certification schemes meet the requirements. With regard to PKS, METI's latest guidelines, if adopted, could have a substantial effect on PKS availability. There is very limited uptake of sustainability certification for palm oil plantations in Indonesia and Malaysia; thus, sourcing acceptable PKS could become challenging and costly. In addition, the COVID-19 pandemic has significantly slowed progress in obtaining sustainability certification in Malaysia and Indonesia. A limited quantity of certified PKS supply could push end users to look for alternative biomass sources and may drive demand for wood pellets. However, some end users who had planned to rely solely on PKS do not have the infrastructure and equipment, such as covered storage spaces, to handle white wood pellets. Therefore, there may be an opportunity for other biomass that can be stored in a similar manner to PKS, such as wood chips and black wood pellets. The same working group began to examine the lifecycle GHG

30 BIOMASS MAGAZINE | ISSUE 1, 2021

emissions of wood pellets and wood chips in 2020. It is investigating whether existing sustainability certification schemes such as the Sustainable Biomass Partnership could be used to prove compliance with any standards introduced. We expect more detailed information on the issue early this year.

US Shipments of Wood Pellets

In December, U.S. pellet producer Enviva made its first shipment of wood pellets from the U.S. South to Japan. It sent 28,000 MT from Florida to the Japanese port of Iwakuni. The shipment marks the first of many for the world’s largest pellet producer. Enviva has a large portfolio of Japanese offtake contracts commencing in the next few years, meaning it will soon gain a sizeable share of the Japanese market. Other established U.S. producers are keen to follow in its footsteps and create a presence in Japan. The commencement of U.S. contracts supplying Japan will change trade flows in the coming years. Traditionally, the Canadian west coast has been the preferred choice for Japanese end users. Its proximity to Japan versus the U.S. and Europe, coupled with proven, secure and sustainable supply, made suppliers there the obvious choice for new users looking for long-term supply contracts. However, since the spot market developed in Japan, Southeast Asian producers have been increasing their share (Figure 2). For the first time in 2020, Vietnam overtook Canada as the largest supplier of wood pellets. But growing demand in Japan, backed by the need for secure, reliable supply contracts, has given the U.S. an opportunity to tap the market. Despite west coast Canadian supply providing a bridge between the Asian and European industrial markets for several years, there has been little interaction between the two markets. In the past, some Canadian volumes contracted to Europe were diverted to South Korea because of the low European spot prices and higher Korean prices at the time. More recently, low Asian spot prices in 2019 enticed a couple of Malaysian and Vietnamese cargoes to make their way to Europe. The start-up of trade between the U.S. and Japan could open the opportunity for more interconnection between the Asian and European markets.

Coal Phase Out

Looking further ahead, METI’s plans to phase out the country’s inefficient coalfired power plants by 2030 could provide opportunity for increased biomass use. In early July, METI began drawing up a new framework to ensure inefficient coal-fired power plants were closed by 2030 as part of Japan's strategic energy plan. Japan had already introduced the Energy Savings Act, which will require all existing large power plants to achieve a minimum level of generating efficiency of 41% by 2030. But METI has now tasked a new working group with identifying how to phase out the inefficient coal plants (less than 38%), while ensuring stability of power supply. The exact policy framework is yet to be worked out but could include financial compensation, incentives, a carbon tax or a combination. Low-efficiency coal power plants might be able to extend their lifetime by cofiring biomass to increase their apparent efficiency. The potential use of biomass cofiring and cogeneration to help meet efficiency targets will be considered by METI. Currently, biomass fuel can be deducted from the assumed energy input of the power station when calculating efficiency. METI will also discuss whether biomass cofiring should be subject to lifecycle GHG or other sustainability measures. The cofiring of hydrogen and ammonia have also been mooted as possible routes to compliance. Japan is the fastest-growing industrial biomass market globally. Therefore, it is as important as ever that all market participants keep a watch of how potential changes could alter the amount and type of biomass it consumes in the coming years. The changes happening in the Japanese market, as well as the evolving Korean market, made it an ideal time for Hawkins Wright to revise and update its popular Biomass Demand in Japan and South Korea report. For a more detailed analysis of these markets, please get in touch. Author: Rachael Levinson Biomass Research Manager, Hawkins Wright rachael@hawkinswright.com www.hawkinswright.com

BIOMASSMAGAZINE.COM 31

¦POLICY put a focus on how energy is produced and used for transportation, heat and power generation. Not even considering the environmental benefits of a policy for replacing coal with pellets in power plants, because of the job supporting characteristics of the strategy, even U.S. policymakers who have supported Trump’s environmental policies should support a strategy for substituting sustainably sourced pellets for coal.

Climate Change Needs Attention Now

SOURCE: FUTUREMETRICS

STRATEGY FOR BIDEN ADMINISTRATION TO FIGHT CLIMATE CHANGE Existing U.S. coal power stations can be part of the transition to a low-carbon economy. BY WILLIAM STRAUSS

rior to the Trump administration, the U.S. had promulgated the Clean Power Plan. The CPP would have required states to achieve lower carbon emission goals in the power generation sector by 2030, contributing to U.S. commitments in the Paris Agreement. In aggregate, the U.S. would have reduced greenhouse gas (GHG) emissions produced by electricity generation by about 32% from 2005 levels by 2030. FutureMetrics research and analysis, discussed in several white papers since 2015, showed that a part of a strategy for reaching those goals should be support for substituting sustainably produced wood pellets for coal in existing U.S. power plants.

This is not a novel idea. The U.S. is the world’s largest producer and exporter of sustainably produced wood pellets that are used in power plants in many nations as part of their GHG reduction strategies. Global trade in pellets that are replacing coal for power generation will be about 24 million metric tons in 2020. Under the CPP, the U.S. would have begun to use domestically produced pellets for meeting U.S. GHG reduction targets. The Clean Power Plan was scrapped by the Trump administration. The incoming Biden administration has already demonstrated its commitment to reenergizing the U.S.’s commitment to fighting climate change and reducing carbon emissions. This reenergized attention to climate change will

All policymakers should be motivated by the increasing costs of the consequences of a rapidly warming planet. Figure 1 should be a call to action for everyone, regardless of political affiliation. It is produced by the actuaries that advise insurance companies about how to price risk. The trajectory in the chart is not conducive to the cost of doing business. To get from where we are today to future goals for lower carbon dioxide (CO2) emissions and control over anthropogenic global warming, a portfolio of complementary solutions will be required.

Evolution to Zero Carbon Emissions

As is the case in many countries already, the Biden administration should embrace a portfolio of solutions that optimize the tactics for an effective path to GHG reduction goals for the future. A pragmatic policy for lowering the CO2 intensity of the power generation sector with a transition to renewable energy needs to be tempered with the need to maintain reliability and stability in the delivery of electricity. Moving to increased renewable generation is more complicated than simply building lots of wind turbines and solar farms. That is often the offered solution, with a reference to solving the intermittency and variability of wind and solar with battery or hydrogen storage. The future for power generation relying heavily on electricity generated from wind turbines and solar farms is a worthy goal that should define the destination. But deploying more wind

32 BIOMASS MAGAZINE | ISSUE 1, 2021

turbines and solar farms will require massive energy storage at a scale that is orders of magnitude from where we are today. Grid level energy storage sufficient to support the reliable supply of electricity in a decarbonized power sector without on-demand, so-called “thermal” generation is probably a decade or more away. That is not to say that a goal of a power grid mostly based on the energy in the wind and sun is not a worthy one—it is. But the transition to that goal will take a long time and require continued improvements in storage technology and density. In the meantime, one component of a strategy that maintains grid reliability during this long transition to a 100% carbon-free generation portfolio is to do what is already being done in many nations: use sustainably produced fuel produced from renewable biomass to replace coal in utility power boilers. Trees and other potential sources of biomass are nature’s natural solar battery. Using sustainable, upgraded solid fuel made from biomass is not a novel idea. The

strategy is proven as effective and economical, and is deployable now with no need to invest in new generation infrastructure or wait for improvements in energy storage efficiency and density.

Existing Coal Power Part of Transition

Globally, greater than 43.7 million megawatt-hours (MWh) of baseload electricity will be produced by wood pellets in 2020. Every metric ton of coal that is replaced by wood pellets lowers net CO2 emissions by about 85% in most locations, and each metric ton of pellet fuel contains about 4.8 MWh of renewable energy. When—and not if—the U.S. creates policy that will support this well-proven strategy, there are many coal stations in the U.S. that could benefit either from cofiring, or, in selected locations, conversion to 100% renewable, carbohydrate-based fuel instead of hydrocarbon-based fuels mined from the earth. This existing fleet could continue to supply on-demand power to balance the grid as wind and solar generation increases. The

carbon intensity of the power would be proportionally lowered as the ratio of pellets to coal is increased. This on-demand, reduced carbon intensity generation can contribute to goals for lower CO2 per MWh of electricity while transitioning to the day when solar, wind and grid-level energy storage are sufficient. Figure 2 chart shows the age distribution of all 529 of the U.S. coal power generation units. There are 41 units that are less than 15 years old, and at least three decades of life left in these newer, high-efficiency units representing about 22,000 MW of capacity. If some of these units are used rather than closed, they can contribute to lowering carbon emissions in the power sector and avoid the real ratepayer costs of stranded assets.

Conclusion

If U.S. policy supports the above strategy, there is no shortage of winners. The following points summarize the many benefits. • The environmental benefits are im

BIOMASSMAGAZINE.COM 33

¦POLICY

YOUR CHALLENGE OUR EXPERTISE Increase your profits with intelligent solutions

SOURCE: FUTUREMETRICS

mediate and quantifiable. Lowering carbon emissions by 10% requires a pellet-to-coal ratio of about 11.24% pellets and 88.76% coal (this will vary slightly based on different energy contents of coal and pellet). Almost no investment is required for modifications to the power station. For the lignite-burning plants, it can happen overnight. • Power generation assets that are fueled with coal gain a significant new value as the only pathway that allows the use of pellet fuel. At a cofiring rate that results in a 10% CO2 reduction, the increase in the cost of generation is estimated to be less than one cent per kilowatt-hour. • Coal producers have a secure market for their product with a known ramp-down in demand over the next decade or longer. Cofiring is not possible with natural gas turbines. • Pellet producers have a new and gradually increasing market, also with known demand. Many underutilized, industrial working forests, such as those in West Virginia, are not in optimal locations for the existing pellet export market. U.S. pellet manufacturers have already invested more than $1.7 billion in facilities in states like Mississippi, Alabama, Arkansas, Texas, Georgia, North Carolina and South Carolina for the export markets. Many thousands of jobs are associated with this existing capacity. New capacity for a U.S. market would replicate that history. • U.S. workers benefit from a carbon mitigation solution that not only maintains jobs but increases the demand for labor. Natural gas plants require very little labor in the fuel supply chain relative to coal and pellets. Wind and solar power plants require no labor for the fuel supply. The incoming Biden administration is expected to engage in sensible carbon reduction strategic planning. It should take a serious look at the ideas in this article as they formulate their version of the Clean Power Plan. bruks-siwertell.com 34 BIOMASS MAGAZINE | ISSUE 1, 2021

Author: William Strauss President, FutureMetrics Inc. William.strass@futuremetrics.com www.futuremetrics.com

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Guidance on the Tax Credit for High-Effi ciency Wood Heaters

Hard Work Pays Off