2022 Biomass Magazine Issue 1

Issue 1, 2022

ARCTIC

AMBITION Biomass Energy in Northern Communities PAGE 14

PLUS:

Archaea Energy’s Biogas, RNG Build-Out PAGE 22

Project Talk: The Value of Experience PAGE 32

BiomassMagazine.com

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2022 ISSUE 1 | VOLUME 16

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FEATURES 14 PROJECT DEVELOPMENT Advancing Bioenergy in the North

Northern governments and local authorities in Arctic and Subarctic regions like the Northwest Territories are working to replace fossil fuels with bioenergy sources such as wood pellets and renewable diesel.

By Anna Simet

COLUMNS

04 EDITOR’S NOTE

Something For Everyone

By Anna Simet

06 What’s in Store for Biomass Power in 2022

By Carrie Annand

Archaea Energy is prioritizing RNG facilities at many of the U.S.’s 2,500 landfill sites.

By Amanda Wagner

CONTRIBUTIONS 28 SUPPLY/OFFTAKE Key Components of Successful Manure Supply Agreements

The manure supply agreement is among the most heavily negotiated documents in a renewable natural gas project.

By Chris Peterson

30 PROJECT DEVELOPMENT Project Talk

DEPARTMENTS

05 EVENTS

08 BUSINESS BRIEFS 12 INDUSTRY NEWS Renewable Diesel & SAF Roundup 39

22 PROFILE Archaea Energy

MARKETPLACE

ON THE COVER

A view of the Northern Lights in Yellow Knife, Northwest Territories, Canada, where the government has championed the roll out of a flurry of wood pellet heating projects in recent years PHOTO: STOCK

Biomass Magazine: (USPS No. 5336, ISSN 21690405) Copyright © 2022 by BBI International is published quarterly by BBI International, 308 Second Avenue North, Suite 304, Grand Forks, ND 58203. Four 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.

Early onboarding of an experienced professional can help avoid project delays and unforseen expenses.

By Sven Swenson

32 FIBER Capital Investments and Fiber Prices in North America

The Forisk Wood Fiber Review reviews investment activities and shift­ing markets that influenced wood fiber pricing as 2020 came to a close.

By Brooks Mendell

SPONSOR SPOTLIGHTS 34 MID-SOUTH ENGINEERING Five Crucial Considerations for Biomass Material Handling Design

By Biomass Magazine

36 KESCO INC. Five Questions with KESCO

By Biomass Magazine

BIOMASSMAGAZINE.COM 3

¦EDITOR’S NOTE

Something for Everyone EDITORIAL If you’re reading this, I hope you’re at the International Biomass Conference & Expo, or plan to be. As we began building the program for the show—which we haven’t held in person since Nashville in early 2020—we were cautiously optimistic. Now, we’re confident this will be the best meeting we’ve had in a long while. This issue of Biomass Magazine is the one we’ll be placing in attendee bags, so as we did with the program, we were sure to try to include something for everyone.

ANNA SIMET As for features, we have a profile on Archaea Energy, EDITOR which you have likely heard of if you follow biogas and RNG. asimet@bbiinternational.com In this page-22 profile, freelance writer Amanda Wagner chats with Megan Light, vice president of investor relations, about the company’s history, strategy, portfolio and plans. With 17 landfill gas-to-power and 11 RNG projects—including the recently commissioned Project Assai in Ashland, Kentucky, which they believe to be the largest LFG-to-electricity operation in the world—the future looks bright for this company, which was founded by two landfill owners.

In our page-14 feature, “Advancing Bioenergy in the North,” I investigate some of the major energy challenges that Arctic, subarctic and northern communities face, with a focus on the Northwest Territories, which is not connected to the North American electrical grid. In these far north locations, winters months are exceedingly cold and dark, so efficiently and reliably heating homes and businesses is crucial. The NWT government—and they’re not alone in this, others like the Yukon have, too—has set some ambitious goals to reduce the use of diesel and other fossil fuels. Wood pellets, wood chips and renewable diesel are poised to play an important role.

Moving on to our contributions, we have a new edition of what is quickly becoming a reader favorite: “Project Talk,” our series with Sven Swenson of Delta Energy Services. On page 30, Swenson shares insight he gleaned from a conversation had with Ken Ciarletta, who has an extensive career in timber, pulp and paper, including development of Georgia Biomass. Ciarletta emphasizes how invaluable experienced professionals are, from early stages of a project to the end. Swenson drives the piece home by providing some tips to help make an operation successful throughout the development process, as well as post-commissioning.

Other contributions include our quarterly Forisk Wood Fiber Review preview on page 32, and some thorough advice when it comes to biogas project partnerships—“Key Components of Successful Manure Supply Agreements,” on page 28.

Finally, I would be remiss if I didn’t highlight our renewable diesel and sustainable jet fuel news roundup on page 12. You can expect to see this industry sector increasingly covered in Biomass Magazine, as well as our sister publication, Biodiesel Magazine, and I would love to hear from you or your company if you have something you’d like to contribute.

4 BIOMASS MAGAZINE | ISSUE 1, 2022

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 SENIOR ACCOUNT MANAGER/ BIOENERGY TEAM LEADER Chip Shereck cshereck@bbiinternational.com ACCOUNT MANAGER Bob Brown bbrown@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.

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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¦

2022 Int'l Biomass Conference & Expo ¦ADVERTISER INDEX 38

2022 Int'l Biomass Conference & Expo

7

Biomass Magazine

19

Blackhawk Technology Co.

25

BRUKS Siwertell

9

Evergreen Engineering

40

Gidara Energy

24

Hermann Sewerin GmbH

26

Hurst Boiler & Welding Co. Inc.

17

KEITH Manufacturing Company

2

KESCO, Inc.

34

Mid-South Engineering Company

10

MoistTech

27

ProcessBarron

11

Rawlings Waste Wood Recovery Systems

18

Timber Products Inspection/Biomass Energy Laboratories

21

Vermeer Corporation

8

Wolf Material Handling Systems

MARCH 14-16, 2022

Prime F. Osborn III Convention Center | Jacksonville, FL The International Biomass Conference & Expo is where future and existing producers of biobased power, fuels and thermal energy products go to network with waste generators and other industry suppliers and technology providers. It’s where project developers converse with utility executives; where researchers and technology developers rub elbows with venture capitalists; and where Fortune 500 executives and influential policy makers sit side-by-side with American farmers and foresters.

866.746.8385 | BiomassConference.com

Carbon Capture & Storage Summit JUNE 13, 2022

Minneapolis Convention Center | Minneapolis, MN Capturing and storing carbon dioxide in underground wells has the potential to become the most consequential technological deployment in the history of the broader biofuels industry. Deploying effective carbon capture and storage at biofuels plants will cement ethanol and biodiesel as the lowest carbon liquid fuels commercially available in the marketplace. The Carbon Capture & Storage Summit will offer attendees a comprehensive look at the economics of carbon capture and storage, the infrastructure required to make it possible and the financial and marketplace impacts to participating producers.

866.746.8385 | FuelEthanolWorkshop.com

2022 Int’l Fuel Ethanol Workshop & Expo JUNE 13-15, 2022

Minneapolis Convention Center | Minneapolis, MN 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

Biodiesel & Renewable Diesel Summit JUNE 13-15, 2022

Minneapolis Convention Center | Minneapolis, MN

Please check our website for upcoming webinars

www.biomassmagazine.com/pages/webinar

The Biodiesel & Renewable Diesel Summit 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 from technology providers, equipment vendors, consultants, engineers and producers to advance discussion and foster an environment of collaboration and networking through engaging presentations, fruitful discussion and compelling exhibitions with one purpose, to further the biomass-based diesel sector beyond its current limitations.

866.746.8385 | FuelEthanolWorkshop.com Please recycle this magazine and remove inserts or samples before recycling TM

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BIOMASSMAGAZINE.COM 5

What’s in Store for Biomass Power in 2022

BY CARRIE ANNAND

Happy New Year to all in the biomass power sector.

Turning the calendar to 2022, this is an ideal time to look ahead at policy that could affect biomass in the new year.

The following are some priority policy objectives the Biomass Power Association is focusing on.

The Renewable Fuel Standard: Will 2022 finally be the year that we see movement on eRINs? The RFS is always at the top of our minds, and that goes double for 2022. We are cautiously optimistic that we will see the U.S. EPA begin to take action on including electricity in the RFS this year, for a few reasons. One is that senior agency staff told us at a meeting last year that we could expect to see a rulemaking process as soon as early in 2022, and another reason is that the statutory requirements for fuel volumes set by Congress when it passed the RFS2 law in 2007 end in 2022. This means that the EPA will need to do what is called a “reset” for 2023, and the agency will be responsible for setting the volumes going forward, rather than adjusting them based on the targets that Congress originally set. The reset offers an opportunity for the EPA to make changes to the program and would be a natural time to set the rules for electricity inclusion.

The Build Back Better Act: Will it pass, and what will its energy and tax provisions look like? The BBB Act appears to be unlikely to pass in its current form, since it has been a struggle to get all the Democratic senators on board.

However, the draft did have some important provisions for biomass, including a long-term extension of tax credit eligibility and significant funding for forest management and wildfire risk reduction. It’s possible that the bill will be broken down into smaller, issue-specific pieces. There will be a lot of pressure on Democrats to pass an environmental/ climate package, particularly to extend renewable tax credit eligibility, which ended for many technologies on Dec. 31.

Carbon capture adoption: How will the infrastructure bill’s $750 million carbon capture grant program be administered? The infrastructure bill signed by Presi-

6 BIOMASS MAGAZINE | ISSUE 1, 2022

dent Biden in November contains considerable funding for carbon capture adoption. The U.S. DOE will oversee the program and will likely introduce some rules for grant applications and eligibility sometime this year. Many BPA member companies are interested in exploring carbon capture adoption, but so far, the cost of the technology has caused it to remain infeasible. The grant program, assuming it includes biomass, may be a way to start capturing carbon at biomass power facilities. This would represent a new revenue stream in the form of credits for carbon captured, stored or utilized, and potentially open the door for biomass power facilities to participate in government programs where carbon intensity requirements have so far prevented it.

Infrastructure spending: How will the billions allotted to the USDA and U.S. Forest Service for forest management and wildfire risk reduction be spent? The USDA and its agency, the USFS, received billions of dollars in the infrastructure bill to ramp up forest treatments and wildfire risk reduction. This includes some $400 million in funding for grants to so-called “wood-processing facilities” that take on materials cleared from high-risk forests, and another $100 million program for biochar production. We are interested to see the USDA and USFS announce the rules of these programs and help our members participate where they are eligible.

We welcome any interested biomass power facilities who are not yet members of BPA to contact us to learn more about the programs we’re monitoring and how they could result in more revenue. We look forward to seeing many of you in Jacksonville, Florida, at this year’s International Biomass Conference and Expo, March 14-16.

Author: Carrie Annand Executive Director, Biomass Power Association www.usabiomass.org carrie@usabiomass.org

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Business Briefs PEOPLE, PRODUCTS & PARTNERSHIPS

Enviva’s Keppler named Entrepreneur of the Year

John Keppler, Enviva Partners LP CEO, was named an Entrepreneur of the Year 2021 National Award winner by Ernst & Young LLP. Winners of the EY National Award are chosen after being evaluated on their entrepreneurial leadership, talent management, financial performance, societal impact, degree of difficulty in navigating and overcoming obstacles to make their companies successful, and originality, among other core contributions and attributes. Keppler cofounded Enviva in 2004. Today, the company is a $4 billion company that is publicly traded on the New York Stock Exchange. Enviva owns and operates more than a dozen plants and terminals across the southeastern U.S., sustainably producing approximately 6.2 million metric tons of wood pellets per year. Enviva employs nearly 1,400 people and supports many oth-

Albioma acquires Quebec pellet plant

Albioma has acquired the La Granaudière wood pellet production plant in Saint-Michel-des-Saints, Quebec. Ideally positioned to supply the Albioma’s Caribbean power plants, the facility produces Sustainable Biomass Partnership-certified pellets from wood waste or low-grade wood from certified sustainably managed forests.

The transaction includes a long-term agreement granting access to a 45,000-metric-ton pellet storage facility in the Port of Quebec, as

8 BIOMASS MAGAZINE | ISSUE 1, 2022

Keppler

er jobs and businesses in the rural South, driving more than $2 billion in annual economic activity.

well as raw material supply guarantees issued by Quebec’s Ministry of Forests, Wildlife and Parks.

The plant, which has been idle since July 2021, is due to be recommissioned in early 2022. Its nominal annual production capacity of 200,000 metric tons is expected to be achieved following some additional investments

BUSINESS BRIEFS¦

Japan pellet imports 3 million metric tons in 2021

Japan imported an estimated 3 million metric tons of wood pellets in 2021, up from 2.028 million in 2020, according to late December report filed with the USDA Foreign Agricultural Service’s Global Agricultural Information Network. According to the report, data from Japan’s Agency of Natural Resources and Energy shows that 201 woody biomass power plants in Japan generated 2,888 MW of electricity as of the end of March 2021. As of then, the agency had approved an additional 193 biomass power plants.

Collectively, existing and approved biomass power plants would bring total domestic operational capacity to 7,394 MW. Japan received its first commercial shipment of U.S. wood pellets in January 2021. The country currently has 135 domestic pellet plants, down from 137 in 2020. Domestic production is estimated at 150,000 metric tons for 2021, up slightly from 149,000 metric tons in 2020.

In addition to wood pellets, Japan also imported an estimated 4.02 million metric tons of palm kernel shells for power production in 2021, up from 3.396 million metric tons in 2020.

GESS RNG Biogas USA announces 4 projects

GESS RNG Biogas USA LLC is launching four renewable natural gas (RNG) projects across the U.S. after successful development of a proprietary swine manure collection process that reduces the amount of manure fed into lagoons and significantly increases efficiency, according to the company. GESS RNG Bio-

gas will implement this system at two biogas plants in North Carolina—in Union County and Bladen County—as well as plants in Grand Rapids, Michigan, and Syracuse, Kansas. For all projects, GESS RNG Biogas’s sister company, Cyclum Renewables LLC, will install renewable microgrids.

BIOMASSMAGAZINE.COM 9

¦BUSINESS BRIEFS

PFI highlights economic, environmental benefits of wood pellets

On Dec. 13, the Pellet Fuels Institute published a document that outlines the economic and environmental benefits of wood pellet heating and grilling. “Sustainable from the Beginning: 3 Facts about Wood Pellet Manufacturing and Use” will be used by the organization and its members to more efficiently convey the benefits of the industry to local, state and federal officials. The document is available on the PFI website and has been distributed to its partners across the wood products, retail and hearth industries.

In 2020, wood pellet manufacturers sold 2.18 million tons of wood pellets for space heating, generating over $350 million in revenue.

Drax to invest in next stage of BECCS project

Drax plans capital investments of around 40 million pounds ($54.3 million) at its North Yorkshire power station during 2022, for the first phase of its bioenergy with carbon capture and storage (BECCS) project, the company announced. The investments will ensure the company remains on track to begin delivering negative emissions technology in 2027.

As part of this investment, Drax has selected Worley to begin the front-end engineering and design work at the start of 2022, and may also work with the company on the subsequent design and build phases of the BECCS project, subject to contract. Drax will also commence site preparation works for BECCS across its North Yorkshire power station, including relocation and decommissioning work to make space for the project.

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BUSINESS BRIEFS¦

North Fork Community Power to commission California facility

North Fork Community Power will soon commission and utilize advanced gasification technology from EQTEC to convert forest stewardship residues into renewable electricity, heat and biochar North Fork, California, is the site of the 2-MW forest-based biomass gasification plant.

It will utilize sustainable local forest biomass as well as material derived from fire threat reduction activities from the Sierra and Yosemite National Forest areas. The plant is located on the site of an abandoned sawmill from the 1990s, bringing back sustainable jobs to its rural community in the Sierra Nevada. The project originated by the North Fork Community Development Council as a way to both steward the environment and promote economic redevelopment in the wake of the sawmill closing.

SJI, REV LNG break ground on 4 Michigan RNG plants

In December, SJI and its development partner, REV LNG LLC, broke ground on renewable natural gas (RNG) facilities at four Michigan-based dairy farms, marking the partners’ first series of renewable energy projects outside of the Northeast.

The projects will include constructing 2-million-gallon anaerobic digesters and related RNG facilities to capture methane produced by cow manure at each of the four farms: Double Eagle,

Roto-Z, Goma and Z-Star. The projects will also entail installation of equipment that cleans the digester-produced biogas, transforming it into commercial-grade, pipeline-quality RNG. REV LNG has led early-stage development for SJI and will preside over the construction of the RNG facilities, which are expected to be operational by late 2022.

PLEASE JOIN US AT THE 2022 INTERNATIONAL BIOMASS CONFERENCE BOOTH 229

BIOMASSMAGAZINE.COM 11

Renewable Diesel & SAF Roundup Haldor Topsoe announced its HydroFlex technology will be used to produce renewable diesel and sustainable aviation fuel (SAF) at two proposed greenfield biorefineries under development in California and Missouri by Indaba Renewable Fuels. Topsoe will also provide its H2bridge hydrogen technology for both facilities, each of which is expected to have a production capacity of 6,500 barrels per day. The plans are anticipated to begin fuel production in 2024.

Marathon and ADM have closed a feedstock partnership to produce soybean oil to supply rapidly growing demand for renewable diesel. The joint venture, named Green Bison Soy Processing LLC, will own and operate a soybean processing complex in Spiritwood, North Dakota, with ADM owning 75% of the joint venture and MPC owning 25%, as announced in August. Expected to be complete in 2023, the $350 million Spiritwood facility will source and process local soybeans and supply the resulting soybean oil exclusively to MPC. The Spiritwood complex is expected to produce enough soybean oil annually for 75 million gallons of renewable diesel per year.

Sinclair Wyoming Refining Co. has selected Applied Research Associates Inc. to supply its Hydrothermal Cleanup

pretreatment technology for the development of a 7,500-barrelper-day renewable feedstock pretreatment unit at Sinclair’s renewable diesel refinery in Sinclair, Wyoming. Sinclair, a renewable diesel producer since 2018, will use its HCU Pretreat unit to expand the feedstock slate that can be processed in its existing renewable diesel facility. Detailed design of the HCU Pretreat project is complete, and Sinclair has initiated construction of the facility. The HCU Pretreat unit is expected to be commissioned in 2022.

A subsidiary of CVR Energy Inc. has selected Honeywell UOP’s Ecofining technology to study conversion of seed oils, tallow and white/yellow greases into renewable diesel fuel at its facility in Coffeyville, Kansas. CVR Energy is currently evaluating the conversion of an existing hydroprocessing unit to a single-stage Ecofining unit to produce approximately 11,000 barrels per day of renewable diesel and jet fuels.

In early December, Viking Energy Group Inc. announced it has entered into a membership interest purchase agreement to acquire a 100% interest in a group of companies developing a renewable diesel plant in Reno, Nevada. According to Viking, the facility has a nameplate production capacity of 43 MMgy and was 95% complete at the time of the announcement. A pretreatment unit under construction within the plant was approximately 30% complete, the company added.

12 BIOMASS MAGAZINE | ISSUE 1, 2022

Booster, the tech-enabled energy delivery service for fleets, has converted more than 90 of its diesel customers with close to 1,200 vehicles to renewable fuels within the first month of its recently announced decarbonization initiative. The company said it will help Booster’s customers cut emissions by more than 70%.

Booster notified its fleet customers last month of its plans to transition vehicles from traditional fuels to renewable diesel before the end of the year. The change follows an announcement by Booster and Renewable Energy Group, one of North America’s largest producers of advanced biodiesel, to offer mobile delivery of renewable fuels to fleets.

Pratt & Whitney has signed a memorandum of understanding with Embraer to collaborate on studies of 100% sustainable aviation fuel (SAF). Technical teams from the two companies will engage to define an integrated ground and flight test plan for 100% SAF in a GTF-powered Embraer E195-E2 aircraft. Powered by Pratt & Whitney GTF engines, the Embraer E195-E2 offers more than 24% better fuel efficiency and lower CO2 emissions per seat than the previous generation E195.

The U.S. EIA recently changed the way its reports biofuel data in its Monthly Energy Review. The agency now breaks down data into four categories, including ethanol, biodiesel, renewable diesel and other biofuels. The EIA implemented the change in October by incorporating new biofuels data from its revised EIA-819 survey into the Monthly Energy Review. Prior to the change, the agency lumped biodiesel, renewable diesel and other nonethanol biofuels into a single category.

British Airways will become the first airline in the world to use sustainable aviation fuel (SAF) produced on a commercial scale in the U.K. after signing a multiyear agreement with Phillips 66 Ltd. Thousands of metric tons of SAF will be produced for the first time in the U.K. at the Phillips 66 Humber Refinery near Immingham, and supplied to British Airways to power a number of flights from early 2022. The SAF will be produced from sustainable waste feedstock at the Humber Refinery, which will deliver its SAF supply to British Airways via existing pipeline infrastructure that feeds directly into U.K. airports.

For the first time ever, OMV and Austrian Airlines are producing and using regional sustainable aviation fuel (SAF) in Austria.

The two companies agreed on the production and fueling of 1,500 metric tons of SAF in the coming year 2022. The fuel is produced at the OMV Schwechat Refinery by coprocessing Austrian used cooking oil in the fuel production process. With a direct pipeline connection to the Vienna International Airport, SAF will be available for fueling Austrian Airlines aircraft as of March 2022, the companies said.

RENEWABLE DIESEL SAF ROUNDUP¦

Howard Energy Partners announced in mid-December the closing of a series of strategic financing transactions, including its inaugural senior unsecured notes offering, and an extension of its $1 billion revolving credit facility. The proceeds from the transactions will, among other things, help finance the previously announced build-out of HEP’s major renewable diesel logistics facility in Port Arthur, Texas, which is underpinned by a long-term agreement with Diamond Green Diesel, a 50/50 joint venture between Valero Energy Corp. and Darling Ingredients Inc. The construction of HEP’s state-of-the-art renewable diesel logistics facility is underway. The facility is expected to be in-service in the fourth quarter of 2022.

U.S. biofuels production capacity expanded to nearly 20.87 billion gallons per year in October, according to data released by the U.S. EIA in late December. Capacity for renewable diesel and other biofuels, including renewable heating oil, renewable jet fuel, renewable naphtha, renewable gasoline and other biofuels and biointermediates, expanded by 103 MMgy for the month, from 911 MMgy in September to 1.014 billion gallons per year in October.

In-state companies can now apply for the Kentucky Renewable Chemical Production Program, Commissioner of

Agriculture Ryan Quarles announced. The program provides an economic incentive for agribusinesses to look at ways to make new products out of renewable diesel or biodiesel, through tax credits incentivizing the production of more than 30 specified chemicals derived from biomass feedstocks. The program will share tax credits previously established for renewable diesel or biodiesel production in the commonwealth. The total amount of tax credit will be five cents per molecular pound of weight of renewable chemicals produced in Kentucky by an eligible business, unless the total amount of approved credits for all taxpayers exceeds the annual cap of $10 million for the program.

Darling Ingredients Inc. reported it has entered into a definitive agreement to acquire all of the shares of Valley Proteins Inc. for approximately $1.1 billion in cash. Valley Proteins operates

18 major rendering and used cooking oil facilities throughout the southern, Southeast and Mid-Atlantic U.S. regions. Valley employs 1,900 and operates a fleet of 550 vehicles. Darling Chairman and CEO Randall Stuewe said Valley Proteins will supplement Darling’s global supply of waste fats and greases. The new supply will provide Darling with additional low-carbon feedstock to produce renewable diesel, and potentially, sustainable aviation fuel.

AEMETIS has signed a 10-year, 450-million-gallon renewable diesel supply agreement with an industry-leading travel stop com­pany. The agreement represents the largest supply contract signed by Aemetis for its Riverbank Carbon Zero Plant, according to Eric McAfee, founder and chairman. The 90 MMgy sustainable aviation fuel and renewable diesel plant is under development on the 125-acre former U.S. Army Ammunition plant in Riverbank, California, and will utilize cellulosic hydrogen from waste forest and orchard wood, along with on-site CO2 carbon sequestration and hydroelec­tric power.

BIOMASSMAGAZINE.COM 13

Advancing Bioenergy

IN THE NORTH While there are some hurdles to overcome, Arctic and Subarctic governments such as the Northwest Territories are working to replace fossil fuels with bioenergy—including modern wood heat and renewable diesel—to save money, reduce emissions and meet energy goals.

BY ANNA SIMET

14 BIOMASS MAGAZINE | ISSUE 1, 2022

PROJECT DEV LOPMENT

¦

BIOMASSMAGAZINE.COM 15

T

he Arctic region of Earth constitutes one-sixth of the planet’s surface, yet it is home to just 4 million people—approximately 0.03% of the world population. That’s no surprise, as during the winter months of the Northern Hemisphere, it is of the coldest, darkest and most remote places on the planet (and at the same time, known for some of the most spectacular views of the Northern Lights).

The Arctic is mostly made up of parts of Alaska, Russia, Greenland and Canada, the latter of which includes portions of all three of its northern territories—Nunavut, the Yukon and the Northwest Territories.

Beginning at the northern borders of Canadian provinces British Columbia, Alberta, Saskatchewan and Manitoba, this region stretches far north into the Artic Circle and is incredibly expansive, collectively measuring nearly 1.5 million square miles.

With a population of around 43,000, the Northwest Territories is the most populated of the three territories, with a land area that’s roughly twice the size of Texas. Its communities are mostly a mix of small towns along the Mackenzie river, with the largest being capital city Yellowknife (20,000), and spread out Indigenous communities on lakes or other rivers.

Like most regions or communities in the Arctic, subarctic or northern and remote locations, the Northwest Territories requires unique energy solutions and poses many challenges when it comes to energy, from cost to accessibility to sustainability and reliability—most relate back to being smaller energy loads with great distances in between (i.e., very expensive to build transmission lines and pipelines, or lack of accessible roads in winter months). While the vast majority of Canada is connected to the North American electrical grid, the NWT is not.

As for energy consumption, the Northwest Territories uses mainly hydro and diesel to generate electricity. According to the Canada Energy Regulator, in normal precipitation years, approximately 75% of NWT’s electricity comes from two small hydropower plants, but in drier years when there is a shortfall—such as in years between 2016 to 2018— the territory is increasingly reliant on diesel, which is the sole or primary electricity 16 BIOMASS MAGAZINE | ISSUE 1, 2022

source for remote communities or industries not connected to one of the NWT’s two hydro-based grids.

As for heat, heating oil is the most prominent fuel used, along with propane, wood (in many cases, aging and poorly functioning systems) and, as of more recently, wood pellets.

In a bid to solve some of the Northwest Territories energy challenges—which includes reducing emissions and moving to clean energy—the government has laid out a 2030 Energy Strategy, of which biomass-based fuel and technology is an important pillar.

Energy Plan 2030

Drafted in 2017, the strategy has several main objectives, which include, but aren’t limited to, by 2030: reducing greenhouse gas emissions (GHG) from electricity generation in diesel-powered communities by 25%; reducing GHG emissions from road vehicles by 10% per capita; and increasing renewables used for space heating by up to 40%.

The government of the Northwest Territories (GNWT) annually reports progress and investments made to date. As for biomass specifically, the most recent report says in the past year, the GHG Grant Program for Government approved $1.1 million in funding for the installation of wood pellet boilers in two Yellowknife school facilities, and by the end of 2021, “the GNWT’s Capital Asset Retrofit Fund (CARF) program had cumulatively reduced GHG emissions by 16,900 metric tons, resulting in over $4.2 million in cost savings since 2007-‘08. Most of the reductions and cost savings came from a switch to biomass for space heating.”

Modern biomass heating has been rapidly growing since the NWT’s first installation in 2006, which the government believes to be the first containerized biomass (wood pellet) space heating system in North America. At the North Slave Correctional Facility in Yellowknife, the boilers were installed in shipping containers and tied into the existing heating system. In its first full year of operation, heating costs were reduced by nearly $58,000. Since then, more than 40 additional biomass boiler systems have been installed

IMAGE: NORTHWEST TERRITORIES LEGISLATIVE ASSEMBLY

through the NWT, and the government reports that wood pellets have surpassed propane, accounting for 36% of the GNWT’s overall heating fuel supply. “The goal is to make biomass the main heating source for GNWT buildings,” the report says.

While 2030 is the goal year set in the strategy, a 2020 study done by Alternatives North said progress can be made much sooner—in fact, an emissions reduction of 50% by 2025 through a combination actions that include wood pellet heating, renewable diesel and carbon offsets. Specifically: spending approx. $15 million on carbon offsets each year; directly investing approx. $145 million in the construction of biomass district heating systems in NWT communities over the next five years and selling recovered heat from diesel generators; and immediately begin transitioning from fossil diesel to renewable diesel in boilers, vehicles and generators. There are indeed some challenges—for one, current availability with renewable diesel— which is only readily available in California and British Columbia—and the fact that it is more expensive than fossil diesel. While there are numerous proposed and developing renewable diesel operations in the B.C., in the meantime, Alternatives North suggests the GNWT should immediately begin a transition from fossil diesel, beginning with its own internal operations to demonstrate how renewable diesel can be used

PROJECT DEV LOPMENT

¦

in boilers, vehicles and generators, and work with fuel suppliers to purchase approximately 200 million liters (52.8 million gallons) of renewable diesel per year within five years, providing a subsidy to reduce the price to that of fossil diesel (about $65 million per year).

Potential pellet supply issues are also addressed in the report, as there are no production facilities in the NWT, though a proposed wood pellet plant has been in the works for years. (Biomass Magazine attempted to contact Aurora Wood Pellets for a progress update, but did not receive a response).

In all of this, one of the government’s key partners is the Arctic Energy Alliance, which provides residents, communities and businesses with funding and the tools they need to increase energy efficiency, save money and reduce emissions.

Comparing heating fuel costs, wood pellets were 24% cheaper per unit of energy than heating oil for commercial buildings in Yellowknife in 2020, according to the Arctic Energy Alliance.

Growing Biomass in the NWT

AEA is headquartered in Yellowknife, which is located on the northern shore of Great Slave Lake, the deepest lake in North

BIOMASSMAGAZINE.COM 17

America and tenth-largest lake in the world.

Residents there see an average of just five hours of daylight during December, and for most of the month, the sun doesn’t rise until after 10 a.m., setting just after 3 p.m. And with June comes 20 straight hours of daylight, with what is dubbed the “Midnight Sun” appearing May to late July.

During his interview with Biomass Magazine, Kevin Cull, communications coordinator with the AEA, says it is -35 degrees Celsius (-31 degrees Fahrenheit) in Yellowknife. With these long periods of cold and dark, he points out how crucial, challenging and costly that heating homes and businesses is. “We help do this through a number of ways, and one of the biggest is through providing rebates to people who buy more energy efficient equipment, or adopt renewable energy systems like biomass heating or solar panels,” he says. “We do home energy evaluations to let home owners know how they can save energy, and well

as commercial energy audits. We also provide free advice to people and do community outreach and engagement to educate people on how they can save energy or reduce GHGs. We have a number of different programs.”

Cull says that wood heating is a long-established form of heating in the NWT, but a focus on what the AEA does is to replace older, polluting and poorly functioning systems.

“We provide rebates to those who buy a new U.S. EPA-certified wood stove or upgrade to a new one, and we also have a community wood stove program (CWSP) to help cover capital costs and ensure we have good, safe biomass heating in homes throughout the territory.

Unlike our rebate programs where somebody buys one and applies for some reimbursement, the CWSP is a partnership model where we team up with a community or organization and we each pitch in half the cost to buy stoves and have them delivered—typically in smaller, more remote NWT communities.”

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These recipients get their stoves for free, according to Cull, and the community partners get to decide who gets the stoves, which often goes to people most in need.

“In some cases, people get new stoves and they have never had a wood stove before, and in other cases, people are replacing old stoves that aren’t safe anymore with new, more efficient stoves that use less wood. We have had some replaced that were completely burned out and a major fire hazards. In one case, somebody got a stove and because it was now installed according to safety code, they were able to get home insurance, when they couldn’t before.”

For the businesses, community governments or nonprofits that AEA assists in putting in a biomass boiler system or furnace system, these usually ends up being a pellet boiler, as they are better known and easier to use and operate for most buildings, Cull says. “They’re becoming more common

PROJECT DEV LOPMENT ular has adopted a lot of district heating systems, and has done so really without our help.”

While most or all the operating or in-development district heating systems in the NWT use wood pellets, Cull says, some have been designed to also be able to use wood chips. In these cases, the communities can harvest local wood, chip it and use it in their boilers. “But I don’t believe any communities of those are up fully running yet,” Cull says. “We are working on a project right now to try to get wood pellet boilers installed in a couple of local businesses—they pay the cost, we handle the logistics and project coordination—they’re still underway so I can’t disclose much, but it will be a neat project once it’s done.”

As for (potential) pellet supply issues, as addressed in the Alternatives North, Cull says

¦

AEA has not seen any issues yet, though there are some price fluctuations. “There is a pellet plant not far from the NWT border, and most buy from that plant,” he says. “There are a few other manufacturers who sell their pellets here as well.”

Finally, Cull points to the ambitious goals of the NWT 2030 Energy Strategy, which he emphasizes is designed to double the amount of biomass heating from its rollout until then.

Less remote communities like Yellowknife may find it considerably easier to transition to biomass heat than the extreme remote, most of which rely on diesel generators to produce power and meet heating needs—communities like these are scattered across Canada. They are, however, in a unique position to take advantage of the development of wood-based

Since 2012, the community government of Whatì has operated a district heating system. The Arctic Energy Alliance provided advice and studies to help get the project underway. The system uses a wood pellet boiler to heat four buildings. The boiler is in the container in the foreground; the pellet silo in the background.

PHOTO: ARCTIC ENERGY ALLIANCE

A Simple & Effective Biogas Sump Pump throughout the territory, and we help people figure out if they want a biomass heating system, and which type of works best for them through a program specifically geared toward advice to community governments.”

For commercial biomass boiler projects, AEA will rebate half of the project costs, up to $50,000, and manage project coordination.

AEA has helped several communities in the territory adopt district heating systems that heat anywhere from three to five buildings, and are currently working with a couple more to get systems up and running. “This has all come out of our biomass advice program,” Cull says. “We worked with community governments or development corporations that wanted to put in systems. In one of the cases, the community that owns the district heating system is selling its heat to the territorial government to heat one of their buildings. The city of Yellowknife in partic-

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Mary Flunki, an elder from the Whatì a First Nations Community in the Northwest Territories, received a new stove in 2018 as part of the Arctic Energy Alliance’s wood stove program in partnership with the Tłı̨cho government and the community government of Whatì.

PHOTO: ARCTIC ENERGY ALLIANCE

bioenergy projects with many socio-economic and environmental benefits, according to a recent study.

Extreme Remote Communities

The authors of “Derisking Wood-Based Bioenergy Development in Remote and Indigenous Communities in Canada” collaborated with five remote and Indigenous communities across the country to investigate the main barriers and potential solutions to profitable and sustainable wood bioenergy systems. Nicolas Mansuy, coauthor and lead of the project, discussed results with Biomass Magazine. “Remote and northern communities surrounded by forested areas are well positioned to use woodbased bioenergy to meet their energy needs, and thereby reduce their GHG emissions,” says Mansuy, who works in the Edmonton, Alberta-based Canadian Forest Service’s Northern Forestry Centre. “In Canada, approxi20 BIOMASS MAGAZINE | ISSUE 1, 2022

mately 200 remote, off-grid communities rely on diesel to meet their main power needs, and most of them are Indigenous communities,” he says. “Using diesel in remote off-grid communities creates many environmental, health and economic issues. It’s often transported thousands of kilometers across winter roads and crossings that are only open when the ice is thick enough for transport, and as a result of these long transport distances, the price of energy in remote communities can be up to 10 times more than what the average Canadian pays.”

In addition, Mansuy says there is potential for storage tank leaks, which can result in soil or ground water contamination and are associated with health concerns over impacts to air quality, food and water supply. “Woodbased bioenergy can not only avoid these environmental impacts, but also reduce GHG emissions associated with the burning and

transportation of diesel. Moreover, when deciding on a renewable energy system, Indigenous communities have often voiced socio-economic needs such as creation of a local source of revenue, jobs and training opportunities for community members, increasing energy autonomy, reliability and community leadership, and lowering energy costs. Considering the socio-economic priorities and needs of the community is therefore crucial to ensure the success of a bioenergy project.”

Whether in the NWT or other remote locations, one of the study’s main conclusions was that remote and Indigenous communities share some common challenges and barriers in developing bioenergy projects. “Federal initiatives like the Clean Energy for Rural and Remote Communities program developed

by NRCan, and the Northern REACHE program developed by Crown-Indigenous Relations and Northern Affairs Canada have committed close to $300 million over the eight years, from 2018 to 2026, to support the development of clean energy in rural, and remote communities, most of which are Indigenous,” Mansuy says. “However, despite the funding support from the government, all the communities in our study have reported that high initial investments and energy market competition—the price per kilowatt-hour for diesel and natural gas is relatively cheap in Canada compared to woody bioenergy—are the main barriers in developing cost efficient bioenergy supply chains. When considering bioenergy systems, communities need also to consider costs associated with biomass transportation and storage, boiler maintenance, repairs and malfunctions, and external consultants.”

One way to mitigate these costs and make bioenergy projects more attractive to the community is to look at what Mansuy refers to as “positive externalities. These include environmental and socio-economic benefits such as avoided costs of tank cleaning and site remediation, the creation of local jobs and incomes, opportunity for training, community leadership and community-based resources management supported by local knowledge and workforce.”

Mansuy notes a community-based bioenergy system should consider the geograph-

PROJECT DEV LOPMENT ical context of the communities and the proximity (and accessibility) of the biomass source. “Some communities use local feedstock like chips produced from nearby forests or fire residues harvested from frequently burnt forest, and can develop their own local biomass supply chain. This is very beneficial because they can reduce transportation costs as well as the GHG emissions associated. By doing so, they also have an opportunity to involve community members and create local jobs and revenues that stay within the community.”

The challenge, however, is to find skilled people to lead day-to-day operations. “Considering their remoteness, some of the communities rely on imported feedstock like pellets from long distances—more than 2,000 kilometers—using a more established supply chain. In that situation, the pellets are mostly produced from harvesting or processing residues from forestry companies, but the community is not involved. That is why is important to support community leadership and capacity from the very beginning not only to develop the most sustainable and cost-effective biomass supply chain, but also to ensure that the whole system is integrated with the needs and values of the community.”

While the communities studied are generally too small—in terms of population and energy needs—to build a pellet plant for their own, regional plants need to be investigated further, either in Yukon or NWT, to supply the northern communities, according to Mansuy. “With an economy of scale, there are opportunities to reduce the costs and supply more communities at once. It is also a potential way to create permanent jobs. But the biomass supply chains and the logistic need to be secured first,” he says.

The implementation of biomass energy systems in Indigenous and northern communities in Canada is relatively new, with many communities having only a few seasons of operation at most, Mansuy points out. To scale up these projects, he says, it is critical to gain a better understanding of what has or has not worked in terms of community capacity and engagement, feedstock supply, GHG mitigation potential and system design.

“That’s why the study was focusing on the risk and barriers, but having said that, most

of the communities are favorable to bioenergy development because they are well aware of the environmental and socio-economic benefits,” he says.

Pushed by the Canada’s climate strategy, there is real momentum in the country for community-based clean energy development, with the number of clean energy projects led

by Indigenous communities growing significantly, Mansuy adds. “Some communities are more advanced than others, and we are start-

¦

ing to see some very effective collaboration and networking to share knowledge, expertise and success stories. All this is very positive and promising, not only to advance the bioenergy sector, but also the leadership of the communities.

Author: Anna Simet Editor, Biomass Magazine asimet@bbiinteriational.com 701-738-4961

HE CHOSE

THREE MORE LOADS PER DAY.

What’s the difference between 18 loads and 21 loads per day? When you’re filling 100-yard trailers, it can mean about three to four more acres per day for an orchard and vineyard removal company like G & F Agricultural Service. Competitive horizontal grinders got the job done. Since choosing Vermeer horizontal grinders, owner Randy Fondse and his team now get MORE done every day.

“We get a couple loads a day more and operators are less fatigued. That’s the key,” said Fondse. “Feed trees to a different machine and it wears you out. Vermeer machines actually feed better, so the operators feel less fatigued after a 10-, 11-, 12-hour day.”

– Randy Fondse | G & F Agricultural Service

Read the full G & F Agricultural Services MORE story at Vermeer.com/G&F. Information noted above was gathered from a third party who was advised his/her experience might be featured in marketing materials. This ad contains third-party observations, advice or experiences that do not necessarily reflect the opinions of Vermeer Corporation, its affiliates or its dealers. Individual results may vary based on care and operation of machine and crop and field conditions, which may adversely affect performance. Vermeer Corporation reserves the right to make changes in engineering, design and specifications; add improvements; or discontinue manufacturing at any time without notice or obligation. Equipment shown is for illustrative purposes only and may display optional accessories or components specific to their global region. Vermeer and the Vermeer logo are trademarks of Vermeer Manufacturing Company in the U.S. and/or other countries. Please contact your local Vermeer dealer for more information on machine specifications. © 2022 Vermeer Corporation. All Rights Reserved.

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¦PROFILE

22 BIOMASS MAGAZINE | ISSUE 1, 2022

ARCHAEA

ENERGY Archaea Energy is prioritizing RNG facilities at many of the U.S.’s 2,500 landfill sites.

BY AMANDA WAGNER

Archaea Energy’s Project Assai is located at the Keystone Sanitary Landfill in Dunmore, Pennsylvania, and underwent commissioning late last year. It is projected to deliver more than 4 million MMBtu of RNG annually.

PHOTO: ARCHAEA ENERGY

BIOMASSMAGAZINE.COM 23

¦PROFILE

N

ow more than ever, consumers are becoming increasingly aware of their impact on the planet. There is greater interest in alternative, renewable energy sources and a desire to do their part when it comes to energy consumption and reducing carbon footprints.

Biogas and renewable natural gas (RNG) are poised for continued substantial growth due to this ever-increasing push toward decarbonization, as well as its potential as a lucrative business endeavor. According to the American Biogas Council’s most recent tally, the biogas energy industry currently consists of roughly 273 on-farm systems, 1,269 wastewater systems, 66 food scrap systems and 645 landfill systems. While the number of landfill biogas facilities might seem fairly substantial, just 13% currently have RNG facilities.

As for consumer demand, natural gas accounted for 34% of energy consumption in the U.S. in 2020, with renewable energy at 12%, according to the U.S. EIA This further amplifies the potential in this space, with demand for natural gas already high and the renewable energy space primed for growth.

In this highly competitive industry, Archaea Energy recognizes the opportunity and aims to redefine the RNG sector.

From A to Energy

Derived from the Greek word archaios, meaning ancient or primitive, archaea are a domain of single-celled organisms that includes methanogens, which reduce carbon dioxide to methane during anaerobic digestion. But while the word means primitive, what Archaea Energy is doing extends far into the realm of innovation, and the company is positioned to become the largest producer of RNG in the U.S. A 250-employee company based in Houston, Archaea went public through a special purpose acquisition company (SPAC) merger in September. Leadership includes Nick Stork, CEO, and Richard Walton, president. Stork and Walton embarked upon their RNG journey as landfill owners in Pittsburgh. After developing a RNG facility on their own landfill, they recognized the opportunity, cash flow, stability and predictability of the investment, with the added benefit of repurposing a byproduct that would otherwise negatively impact the environment.

Now, Archaea Energy’s core focus is its commercial strategy of prioritizing the sale of RNG under long-term, fixed-price contracts to creditworthy partners. An example of one of the company’s recent deals was the mid-November signing of a 21-year purchase and sale agreement with Northwest Natural Gas Co. Under the contract, subsidiary NW Natural will purchase the environmental attributes generated by Archaea related to up to 1 million MMBtu of RNG annually from its portfolio of production facilities, for a fixed fee during the 21-year period.

In this highly competitive space, Archaea Energy is actively working to transform how new sites are developed and set itself apart from others in the industry. This is done in a number of ways, but the first is speed to build. Project Assai, a marquee project nearly five times the size of an average landfill, is located at the Keystone 24 BIOMASS MAGAZINE | ISSUE 1, 2022

YOUR CHALLENGE OUR EXPERTISE Increase your profits with intelligent solutions

In partnership with Rumpke Waste & Recycling, Archaea Energy recently completed a project at the Boyd County Sanitary Landfill in Ashland, Kentucky. Now operational, the plant has the capacity to produce 2,300 MMBtu per day of pipeline-quality RNG. The landfill currently processes about 1,400 tons of trash a day from the tri-state area within a 75-mile radius.

Sanitary Landfill in Dunmore, Pennsylvania, and is an example of a swift project turnaround. Assai has an inlet capacity of 22,500 standard cubic feet per minute and combines landfill gas flows from the Keystone Sanitary Landfill and the Waste Management Alliance Landfill. Assai will deliver over 4 million MMBtu of RNG annually at projected flows, methane recovery and uptime, with approximately 80% of the total RNG volumes contracted on a long-term, fixedfee basis with FortisBC Energy Inc., Énergir, L.P., and The Regents of the University of California, for periods of up to 20 years.

Notably, Assai commenced operations in late December, approximately two years after project development began—cutting the industry-average timeline in half. Believed to be the world’s largest landfill gas to RNG plant, this is a one-of-a-kind opportunity to showcase expertise and differentiators in the industry, says Megan Light, vice president of investor relations at Archaea Energy.

“When returns are high, competition increases,” shares Light. “The RNG space is fragmented with a few small developers. Expertise is the key to competing. It’s less about price and more about credibility and execution.”

Key to standing out in the industry is a unique operational approach, Light says. “One of the draws of landfill RNG facilities is the predictability. With significant in-house gas processing expertise, we are uniquely positioned. The ability to make small tweaks to the process has the potential for a big impact and more output. This is a

bruks-siwertell.com BIOMASSMAGAZINE.COM 25

¦PROFILE differentiator in the marketplace and ensures the best possible outcomes over time.”

Archaea Energy’s in-house experience Light refers to includes unique knowledge of gas separation and nitrogen rejection, which is highly beneficial in both new construction, and repair and optimization of an existing RNG plant.

Another strategy decision for operational efficiency is a standard RNG project design, also known as the Archaea V1 design. “Standardizing project size and design decreases

the overall risk, requires less reliance on vendors, allows for faster and more cost-effective plant construction, maximizes methane gas recovery across locations and builds flexibility into the process, both during the building phase and when operational,” Light says.

Finally, a commercial strategy that prioritizes selling RNG under long-term, fixedprice contracts to creditworthy partners provides predictability of cash flow, removes variability and decreases the emphasis on selling into the marketplace, which can be volatile

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26 BIOMASS MAGAZINE | ISSUE 1, 2022

(as energy demands increase, consumer costs rise, and inflation adds to an already complex situation). “This benefits customers who use natural gas within their existing infrastructure, such as utilities, corporations, universities and other commercial entities that want to prioritize decarbonization, replacing fossil fuels with RNG,” Light says. “Additionally, longterm contracts provide cash flow stability and funds reinvestment for more growth and innovation.”

On the Horizon

With a backlog of 35 projects, Archaea Energy is leveraging its technology and assets to grow and evolve. Focused on increasing the production and availability of RNG, a key benefit of the recent merger and going public is the funding that followed, according to Light. “Adequate funding further eliminates the risk and allows Archaea to focus on execution and following through on customer promises.”

As for strategic priorities moving forward, Light says they are as follows: Upgrades to existing facilities. “Archaea Energy currently has 11 operational facilities and seeks to get even more production from each,” she says. This includes everything from changing out equipment for greater efficiency to building a new plant to replace dated infrastructure.

Electric conversions, landfills with electric assets and building new RNG plants. “We see a lot of opportunity for sites with existing electric assets and transitioning the type of production,” Light says. “If a facility is not contracted to make electricity there is an opportunity to improve and grow by building an RNG plant on the site.”

Greenfield opportunities. A significant percentage of U.S. landfills don’t have electric or RNG facilities, and Archaea Energy is actively securing rights for new projects—approximately 40% of the 35 projects in play fall into this category, according to Light.

“As we look to grow, our first focus is development,” Light notes. “Currently, most developers average one to two projects a year, but we want to streamline processes and identify efficiencies to increase to 10, 15 or even 20 projects a year … this means significant investment in people, processes and supply

chain to achieve a dramatically different scale than the industry is currently known for. The question is, how quickly can we ramp up?”

The future is brimming with potential, Light adds. Right now, a priority is negotiating for additional gas rights and adding production where there is no production capacity currently.

“Greenfield projects and electric conversions are the current focus. Downstream, Archaea Energy could acquire electric assets for conversion to RNG facilities over time, but only if the price is attractive.”

With 11 RNG sites and 17 landfill gas-to-electricity sites, Archaea has the experience to significantly impact the RNG sector and its availability. Operational expertise facilitates strong partnerships with landfill owners and operators, establishing a strong foundation for growth and innovation in an industry that is full of potential and well-positioned for global impact.

Contact: Anna Simet asimet@bbiinteriational.com 701-738-4961

FUEL | AIR | GAS | ASH processbarron.com 205-663-5330 BIOMASSMAGAZINE.COM 27

¦SUPPLY/OFFTAKE AGREEMENTS

KEY COMPONENTS OF SUCCESSFUL MANURE SUPPLY AGREEMENTS The manure supply agreement is among the most heavily negotiated documents in a renewable natural gas project.

BY CHRIS PETERSON

A

lthough each contract related to the development of a renewable natural gas (RNG) project is critical, the terms of the manure supply agreement will make or break the profitability of a project and the risk tolerance of its investors, lenders and other key stakeholders. Additionally, having an

agreement that will pass the scrutiny of the developer’s lender can be a challenge for the unwary.

Successful manure supply agreements identify the big issues in the farmer’s supply of the feedstock and clarify each party’s rights and obligations. Some of the critical terms for the parties to agree upon include

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).

28 BIOMASS MAGAZINE | ISSUE 1, 2022

the farmer’s compensation, feedstock quality, environmental incentives and credits, ownership and disposal of digestate and the third-party rights granted to the developer’s lender.

Farmer Compensation

The farmer’s compensation can take many forms, depending on the needs and interests of the parties and their respective stakeholders. Compensation based upon the volume of feedstock delivered or upon the head count of livestock are most common.

When using the latter on dairy farms, the parties may compensate the farmer using a “wet cow equivalent” metric that calculates cows based on breed (for example, Holstein vs. Jersey), heifers and wet vs. dry cows.

Compensation can also take the form of milestone bonuses, where the farmer receives a bonus payment upon the developer reaching certain milestones, such as the signing of the transaction documents, the project reaching commercial operation and the validation of Low Carbon Fuel Standard pathways. And for certain farmers willing to forgo some or all compensation through the above standard structures, a profit-sharing arrangement (either through a percentage of profits or gross revenue received by the developer) would expose the farmer to more of the risk (including a lack of payment under such arrangement for the first few years), but share in more of the upside profitability of the project down the road. In some recent transactions, the farmer or affiliates make an investment in the project company, generally on the same terms as the financial investors.

This provides an alignment of interests and perhaps comfort to investors that the farmer will continue production and fulfill all the terms of the supply agreement.

Feedstock Quality

Because certain characteristics of the farmer’s manure supply will affect biogas production and the stability of the anaerobic digestion process, the parties should consider including such characteristics in the description of the manure that will be delivered pursuant to the agreement. These characteristics might include moisture content and total

solid content. Additionally, it is important to agree upon those extraneous materials that should not be included in the manure. For example, significant amounts of rock, gravel and certain chemicals can adversely affect biogas production.

The parties should also agree upon the consequences of delivering unsatisfactory manure. In the event the manure contains an abundance of extraneous materials that preclude the developer from using it in the anaerobic digestion process, such unsatisfactory manure will need to be disposed of.

Typically, the farmer is obligated to take this back and incur any costs associated with its return and disposal (which may at least include transportation costs).

Environmental Incentives and Credits

Federal and state credits and other incentives for RNG production are often critical to the economic viability of the project.

When sold in connection with the California transportation fuel market, the RNG produced from a livestock manure project offers some of the highest LCFS credits, due to the negative carbon intensity score associated with manure feedstock. These state credits, combined with the federal credits from Renewable Fuel Standard renewable identification numbers generated from RNG, provide the incentive for developers to risk millions of dollars in initial capital expenditures. The manure supply agreement should therefore clearly state that the developer owns all rights to the environmental credits, tax credits, offsets, allowances and other private or governmental incentives related to the project. The farmer, however, keeps any environmental benefits that come from the dairy’s farming, such as carbon-reducing practices.

Disposal of Digestate

Following manure processing in the anaerobic digester, the developer and farmer must agree upon what to do with the residual manure fiber, effluent and other leftover liquids. Without specifying the parties’ rights and responsibilities with respect to the digestate, the developer may be left storing and transferring the digestate material off-site.

Unclear terms with respect to this digestate

may also lead to a future bottleneck in gas production, as the developer is left with no place to store or dispose of such materials.

Uses of the digestate, however, are plentiful and may have significant value to one or both of the parties, as the fiber can be used for livestock bedding and the liquids can be spread on farm fields as fertilizer and soil conditioner. If a developer has no interest in digestate, the parties often agree that the developer may return it to the farmer’s existing effluent lagoon or, in the case of fiber, returned to the farmer for use as bedding. Alternatively, the developer may wish to retain the digestate, process it into a fertilizer and sell back to the farmer or other third parties.

In any event, the agreement should specify what each party’s rights and obligations are with respect to these materials.

Lender Rights

Finally, the viability of an RNG project is often contingent on receiving debt or equity financing to pay for multiple millions of dollars in capital expenditures. While lending to developers in this industry is becoming more robust, lenders will typically require certain third-party rights to cure a developer default. In practice, this is accomplished by requiring the farmer to provide written notice to the developer’s lender of a developer default, and by providing a certain period of time for the lender to cure the default before the farmer has any right to terminate the agreement.

Understanding the issues inherent in the development of an RNG project and carefully addressing these issues within the transaction documents, including the manure supply agreement, are critical. Failing to address important issues in a project’s early stages often leads to costly litigation in the future. With respect to such arrangement, the farmer and developer will both benefit from having their expectations clear and unambiguous.

Author: Chris Peterson Senior Associate, Husch Blackwell Chris.peterson@huschblackwell.com 417-268-4057

BIOMASSMAGAZINE.COM 29

¦PROJECT TALK

PROJECT TALK WITH SVEN SWENSON

I

n the last edition of Project Talk, I spoke with Mick Papp of SusEnergy.

He emphasized the need to have the right project manager as your trusted change agent, and he stressed how imperative it is to provide them with adequate support in the form of time, money and (the right) people.

For this article, I visited with Ken Ciarletta, who has a long and auspicious career in wood and wood products, most recently as the CEO of Nova Energies. Ken also spent 20 years with Georgia Pacific and 10 years with Weyerhaeuser, mostly in timber, pulp and paper and engineered lumber. From his 39-year career, his greatest claim-to-fame to date is perhaps being the man behind the Georgia Biomass facility in Waycross, Georgia. It was the largest pellet production facility in the world when it was completed, and as such, was arguably the most positively impactful wood pellet project at that time. The facility has since changed hands, and Ciarletta has “semi-retired,” but both continue to be strong performers with a lot of value.

I first spoke to Ciarletta in October.

One of his initial comments to me was something we’ve all heard before: “You don’t know what you don’t know.” In the context of project management, it’s one cliché that will pay dividends if embraced, and will likely cost you money if you don’t. So, how do you embrace it?

You must have participating team members who do know. The project manager must be cognizant of the mental map of the project, and know where the team members fit in. If there are places on the mental map that are unexplored, you need to find someone who has already explored those areas and get them on the team in some manner.

Swenson

Give them the time and infrastructure necessary to provide timely feedback. Pick their brains using tried and true techniques to bring things to the surface, which can be as simple as designating a certain time for risk identification and mitigation brainstorming.

Then, you need to listen to the message.

Most importantly, you must act.

So, if nobody internal to the project has that experience, it is prudent to engage with a consultant who has the “been there, done that,” gold stars and scars to prove it. You can and should happily pay that person for their knowledge and avoid some of those scars—and perhaps gain some gold stars yourself.

Projects incur massive delays and expense by not having access to that experienced person to answer questions or provide a suggested course of action. I was provided an example of such a project in my young-

er days, and it has stuck with me such that I’ll pass it along here, providing credit to the wise man who lived it and passed it on to me, Walt Query.

Query offered that he was brought in as the “experienced consultant” after several failed attempts at erecting some steel-framed towers. When the crew originally assembled the towers, initially, everything was matching up wonderfully, but then became more misaligned as they moved up the structure. Some sections were too long and some too short, such that holes did not align and they could not finish the install. They were convinced the design was incorrect. Enter Query. He asked a few questions, and then simply pointed out that they needed to have all the connection points loose fit until the entire tower structure was in place, and then systematically perform the tightening such that the tower remained in alignment. It’s the same princi-

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).

30 BIOMASS MAGAZINE | ISSUE 1, 2022

ple as tightening the lugs when installing a tire on your car—if you tightened the first lug nut all the way down right away, chances are pretty good that you’ll have a wobbly tire. The crew had been torquing each joint to final acceptance criteria prior to proceeding to the next joint. The slight, imperceptible misalignments from lower levels became additive to the misalignments as the install continued upward. Eventually, this created misalignment in the upper regions and could not be overcome by tolerances, and the prefabricated bolt holes were no longer viable.

Alternatively, leaving the joint assembled, but not completely torqued, allowed for the misalignments to work themselves out as needed to position higher members. The absence of this simple piece of knowledge—a thing the crew did not know they did not know—was sufficient to result in days of rework.

Gold star for Query. Scars for everyone else. So, in this vein it’s well worth assessing the core knowledge base in the project, and adding that pedigreed consultant to your complex or more costly projects to fill any identified knowledge gaps. You will never know exactly what issues you avoided, but the consistent and periodic involvement of a true consultant early on will provide for insight that can dramatically change the project (but if you do it correctly, you won’t necessarily know the positive impact). Hypothetically, Query’s review of the tower installation process before field work began in the real-life example above would likely have led to an innocuous comment from him such as, “Don’t torque down on the joints until all the members are in place.” You would perhaps never recognize that getting that advice early and acting upon it was worth tens or potentially hundreds of thousands of dollars, and days of unlost time.

You should also keep in mind that calling in the expert to get you out of a problem is much more expensive than having that experienced member on the team from the start, and avoiding the issue all together. In the scheme of things, the cost of the consultant may look like an expensive “nice-tohave” in the head count, but that cost pales in comparison to some of the issues found by going it alone. The only thing worse is hiring

a consultant and then not acting upon their recommendations.

Ciarletta stresses the need to have experience on your team, particularly when talking about building a new greenfield pellet facility.

Many people talking biomass these days have a finance side of the program and can see the money-making potential, but don’t have an engineering or a wood products background, so they really don’t know what they don’t know about the industry. When you see trucks of raw wood going down the road it may look pretty simple—grind those trees right on up and squeeze out some pellets; however, you need to know about forests and wood chemistry, including the biologics for a sustainable, cost-efficient product.

Understanding of your feedstock, where it comes from, what you can mix, can’t mix, etc., is vital. Call in the expert.

Ciarletta provided numerous examples of where experienced counsel could prove invaluable. Many of these topics are worthy of in-depth discussion in and of themselves, but I’ll summarize a few that are amplified in a greenfield build. The complexities of running a new business must also be factored into the project, and a lot of money can be lost with just a few missteps.

Realistic time frames. You must expect to have weather delays and other issues (e.g., supply chain) and be prepared to pivot to other planned activities to remain productive.

Environmental agencies. Get to know your state and local rule enforcers long before you need something from them. Make them your allies early, and work together.

Understand your cash flows. This includes the expected delays and ramp up, and initial operating costs. These costs must be considered, and will not be insignificant.

Training. Many aspects of running a biomass facility have aspects of “art,” as well as science. Be prepared to augment the normal vendor training with hands-on or mockups, and several sessions as opposed to the one-and-done typically offered.

Offtakes and logistics contracts.

These must be solid. You need to fully understand the force majeure clauses, particularly if selling overseas where the sensitivity

to dust and potentially dangerous storage or use practices have not been historically as robust as U.S. standards. If invoked, and you no longer have a viable contract, what do you do with your trained labor force and the facilities until the offtakes are viable?

Spare parts. This is something to think about during design, not just when the project is nearing completion. Engage your vendors early, and do not rely simply upon their standard spare parts lists. Take the time and effort to truly understand the single point vulnerabilities during design, and eliminate as many as possible. This will help determine early what spares may be needed during a startup, and limit one-offs and special parts in the design. Knowing early is crucial, as you cannot trivialize potential expediting fees.

Ciarletta stated he has had to pay $30,000 expediting for a $25,000 part, more than doubling the expected cost of the component.

And if your critical gearbox is one-of-a-kind manufactured only occasionally in rural Findland ... (during the design phase you should try to not let that happen, but if it does, you need to know).

Most importantly with spare parts is the need for the bioenergy industry to work together—create those relationships with other bioenergy proponents to help each other out of parts situations. Ciarletta offered that even the biggest players have had problems. “Everybody goes through the gauntlet, so learn from it, and be ready to help your fellow operator.” Ciarletta developed lasting relationships with his major competitors and made good on his tagline: “Hey, if I can help you in any way, let me know.”

Call it what you will—quid pro quo, karma, mutual back scratching—the key is to develop relationships, help each other and work together to advance bioenergy. So, with that, I’ll echo Ciarletta—please let me know if there is anything I can do to help.

Author: Sven Swenson Senior Vice President of Technical Services Delta Energy Services LLC Sven@workdelta.com 352-201-984

BIOMASSMAGAZINE.COM 31

¦FIBER

FORISK WOOD FIBER REVIEW:

CAPITAL INVESTMENTS AND FIBER PRICES IN NORTH AMERICA

BY BROOKS MENDELL

T

he systematic “snapshots” of fiber prices captured by the Forisk Wood Fiber Review help us identify and point to sources of pain and opportunity. For example, capital continues to flow to the U.S. South: GP and West Fraser confirmed or completed significant sawmill and OSB investments in the late 2021. Outside of the South, the announced acquisition of EACOM Timber Corp. in Eastern Canada by Interfor was especially noteworthy, as it demonstrates

the potential upside in the forest industry across North American regions. That said, risks remain. Wildfires, rainfall and warming demand from China have created stresses in the Pacific Northwest and British Columbia.

Given investment activities and shifting markets, how did wood fiber pricing look across North American as we closed out 2021? In the U.S. South Central region (Figure 1), softwood roundwood and chips and hardwood roundwood were up 1 to 2%, while hardwood chips prices were up ap-

proximately 4%. In the frenzied Southeast, fiber prices—both chips and roundwood— increased for the fourth straight quarter in Q4 2021. In the U.S. Great Lakes region, softwood and hardwood fiber prices held relatively steady for a second quarter against a backdrop of soft demand. In the Northeast, hardwood and softwood chips rose 2 to 3%; roundwood held steady. In the Pacific Northwest, softwood chips and roundwood jumped approximately 11% against a backdrop of stronger Chinese demand and

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).

32 BIOMASS MAGAZINE | ISSUE 1, 2022

FIGURE 1. SOUTH CENTRAL FIBER PRICING THROUGH Q4 2021

SOURCE: FORISK WOOD FIBER REVIEW

reduced fire salvage operations, which dried up available pulp logs earlier in 2021.

As for Eastern Canada fiber prices during the quarter, softwood chips and hardwood roundwood in Quebec/eastern Ontario fell approximately 2% in U.S. currency (and remained level in Canadian dollars). Hardwood roundwood fell in the Maritimes for the second quarter in all on one line dollars, after increasing in Q2 2021.

Western Canada softwood chips declined for a second quarter after multiple quarterly price increases (for residuals chips, due in great part to their formulaic ties to the price of northern bleached softwood kraft (NBSK). Softwood chip prices in Alberta and British Columbia fell about 1% and 5%, respectively, for the quarter.

For broader context, we recognize how supply chain issues continue to trouble forest industry managers. One lumber firm executive told us, “We’ve got wood right now, but our challenge is labor.” We speak with hundreds of foresters, investors, and managers each quarter when compiling data for the FWFR and the Forisk Market Bulletin.

Many shared multiple examples of recent pain points: • “Logging crews are cannibalizing each other’s operators.”

• “We’re losing woods workers and guys in the mill at the same time to other industries.”

• “There is craziness in the wood supply chain. I’m just wondering who’s going to run out of people first.”

One procurement manager sounded a more hopeful note, observing that the situation at each mill and for each market differs: “Maybe we don’t have too few trucks. Maybe we just need to take better care of the trucks and drivers that we have.”

Regardless the size and depth of the issue, we always have improvement opportunities.

The above is data from the Forisk Wood Fiber Review, a quarterly publication tracking North America’s major wood fiber markets, and the Forisk Market Bulletin, which tracks forest industry investments.

Author: Brooks Mendell Forisk Consulting LLC 770-725-8477 bmendell@forisk.com

BIOMASSMAGAZINE.COM 33

¦SPOTLIGHT

Mid-South Engineering

Five Crucial Considerations for Biomass Material Handling Design Mid-South Engineering’s Vice President Scott Stamey has more than 20 years of experience working with projects in the building products and biomass energy industries. Below, he highlights five critical design components when it comes to designing material handling systems for biomass operations.

1) Material Characteristics. “Understanding the characteristics of the biomass material you’re handling may seem like a no-brainer, but it’s the basis for all the other decisions you have to make with respect to how you’re going to handle the material,” Stamey says. “Moisture content can influence things like whether or not there are explosion or fire risks, and to what degree. Particle size and bulk density are important for deciding not only what type of conveyance you might use, but also in correctly sizing it, in terms volume to be handled and horsepower required.”

Material consistency should also be considered, as some pieces of equipment are more tolerant to a wide range, according to

Stamey. “For example, bark—if it is always sized consistently, that makes things easy, but that’s uncommon. Equipment should be planned around that variation or to screen the material out. If there are seasonal differences, like the bark may come off differently in summer vs. winter, you must be able to accommodate both.”

Conveying equipment. “For conveying equipment, you will choose mechanical verses pneumatic,” Stamey says. “Mechanical is more common in biomass, as pneumatic does come with some downsides—it means fewer pieces of equipment, but typically it has a higher horsepower demand, as well as potential for safety risks like explosion and fire, and some environmental risks with emission

points, which you may not have with mechanical.” There are many types of conveyors for mechanical handling, Stamey adds, and it’s important to choose the right fit for the material and the operation.

“Additionally, conveying systems need good controls and automation to handle a range of operational conditions, and they should be easy to operate. I recommend an integrated supplier or independent engineering firm to put together the entire system to ensure it is designed properly and all components work together.”

Transition design. “Good transitions are critical,” Stamey emphasizes. “Most people realize that, but it can be overlooked.

You want good transitions between different pieces of equipment that minimize damage to material and the transition itself. Along with this is optimizing loading, to ensure material is delivered into each piece of equipment correctly to minimize plugging, dust or other damage.”

Storage and reclaiming. Open verses closed storage have different capital costs—closed systems cost more, but pile storage typically has environmental and contamination risks, which doesn’t bode well for operations requiring a clean final product. “Determining the right amount of storage volume is usually an operational consideration or based on the delivery schedule of raw material,” Stamey says. Flow rates in and out of storage may be very high depending on the process, and first-in, first-out (FIFO) is an import-

ant factor. “Certain types of receiving systems will accommodate FIFO, but some don’t,” he says. “The amount of time the material is being stored should be considered.”

And, Stamey adds, whether the systems are automated or manual usually comes down to capital cost vs operational cost. “A highly automated system typically costs less to operate due to material handing efficiency, but it comes at much higher capital costs.

However, there are ways to design manual systems that have lower capital costs, but the ability to add in automated systems later.”

Safety. “This is part of every decision we make when it comes to design, and some are minimum OSHA requirements like proper guarding on equipment and safety shutdown devices,” Stamey says.

“There are some minimums, but also recommendations that make systems safer, which an experienced equipment provider or design engineer can offer to the owner—for example, a plugged chute indication, which may not be included with the equipment itself, but can be engineered in.” Fire, spark and ember detection and suppression is critical with biomass, Stamey adds, as well as sprinklers and deluge systems. “Factory Mutual Approvals does offer some guidelines for that, and some insurers require FM compliance. They are a good resource for offering some guidance on what sprinklers and deluge systems are available for biomass handling systems.”

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¦SPOTLIGHT

Five Questions with KESCO

Biomass Magazine chats with KESCO founder and president Jason Kessler.

BMM: Tell us about KESCO—when and why it was founded, and the company mission.

J.K.: KESCO was founded in 2001. We are a solution-focused, American company that provides the expertise necessary to design, build and commission bulk material processing systems. Our tailored solutions are designed to satisfy your specific project requirements. We partner with leaders in their respective fields to provide an efficient project experience. Our work is spread across more than 30 wood pelleting plants throughout North America, with seven of these projects being complete plant supply.

As for KESCO’s history, in the 1990s, I worked for Bliss Industries, a leading manufacturer of hammer mills, pellet mills and pellet coolers. My primary focus was to develop emerging markets in the wood sector.

We found that most opportunities required a complete system rather than individual pieces of equipment, which required that I find quality equipment manufacturers that shared our business philosophy. Customer-first problem solving was a philosophy taught to me by my father, Mark Kessler, who was working with Laidig Systems at the time. I was introduced to Drew Kice with Kice Industries and Justin Koenig with Rapat Corporation, and these three companies shared our philosophy. Along with Bliss, they made up 90% of the systems we were designing.

There were tough times economically in 1999 and 2000. I believed in the team we assembled, the systems we designed, and that the renewable energy market was getting ready to take off. I had experience supplying several complete systems with Bliss Industries and found myself with first-hand experience in the wood pelleting industry that very few people in North America had at the time.

I created KESCO for three primary reasons. The first is entrepreneurial spirit. I always wanted to have my own business and enjoy the pressure of having the buck stop with me. Second was application knowledge—I could count on one hand the 36 BIOMASS MAGAZINE | ISSUE 1, 2022

SPOTLIGHT¦

number of people that had the same level of experience in the wood pelleting sector.

Clients were tired of paying engineering firms for their time, boiler plate documents, and regurgitated “facts.” They needed help from someone with real-life experience.

Finally, I wanted to help others. This had proven to be a rule to live by personally, why shouldn’t it be our mission in business?

There were plenty of smooth-talkers out there. The clients I met with needed genuine help. They were understaffed, had good ideas and needed processing expertise.

These were the primary reasons for starting KESCO and continue to be the keystones in our operation today.

BMM: You’re speaking at the upcoming International Biomass Conference & Expo in Jacksonville, Florida, March 14-16. What are some touch points that attendees can expect?

J.K.: The title of my presentation is “Islands are for Vacations, not Pellet Plant Design.” The wood pelleting industry has historically developed projects using an “island” philosophy: the dryer island, the dry hammermilling island, the pelleting island, the wood yard, etcetera. No one can really answer why it is done this way; it just seems to be how it was done on some of the early projects. I believe this approach is just a way for clients and/or engineering firms to break up responsibility for a bid package.

They can dedicate a team to “this island” and another team for “that island.” This has often resulted in choppy operations that are designed around a series of small successes, in an industry that is judged on one thing: finished pellets out the door. The focus of my presentation is on the effects, both positive and negative, that one area of process, or island, may have on another area of process. We will use examples from operating wood pellet plants to show what happened, how it affected the overall process, and what needed to be done to improve the overall operation.

BMM: This seems to fall in line with KESCO’s business model of designing “cohesive” wood pellet manufacturing systems.

J.K.: Exactly. The island approach to designing plants does not take overall process objectives into consideration. A cohesive design means a design that is looking at the operational costs of the entire operation, not just a specific island. One example, which I intend on discussing in detail during my presentation, is the impact of moisture content and temperature on the grinding process. Warmer material can improve pelleting efficiency while decreasing hammermilling efficiency. Some pellet mills require higher moisture material than others. Higher moisture material may increase efficiency for certain pellet mills while significantly decreasing hammermilling efficiency. A cohesive plant design will take all these factors in consideration to determine the most efficient means of achieving their production objectives.

BMM: A common problem that some new wood pellet plants experience is bottle necks in process flow. What seems to be at the root of this problem?

Can you tell us about KESCO’s experience when it comes to helping customers solve these issues?

J.K.: There are two primary reasons for bottle necks in process flow. One is the material itself—we are dealing with wood fiber. A large portion of a wood pelleting system uses volumetrically sized equipment.

Mechanical material handling equipment, surge bins, silos, air handling equipment, airlock valves and feed screws are some of the specific components that are sized volumetrically. Specific processes within the wood pelleting process can decrease product bulk density and flowability. One example is microchips versus pre-shredded chips.

Both products share similar particle sizes, bulk densities and moisture content, but shredded material has very different material handling characteristics than microchips.

The pre-shredded material can nest together, leading to backups in discharges and chutes. Most new plants do not have material that can be tested prior to designing the system, so assumptions must be made.

This leads to the second reason for bottlenecks. It’s easy for producers to ask why manufacturers aren’t more conservative in their sizing of equipment—the short answer is price. Most pellet plant purchasing decisions are being made on price. KESCO tries to explain the difference between price and cost to our clients. The greatest cost to a pellet plant is not producing pellets at the design rate, quality or within a timeframe that meets their contractual commitments.

Establishing a design safety factor with the client is one of the most effective ways to eliminate potential bottlenecks while managing expectations of the system price.

BMM: Are you seeing any trends right now in the wood pellet industry?

J.K.: Green chip shredding is being incorporated into most new wood pellet plants. This process further reduces the chips prior to drying, and allows the wood yard to produce a larger, looser tolerance chip. Pre-shredding will break open the chip, allowing the dryer to operate more efficiently. Pre-shredding chips can produce enough fiber that meets particle size specification to justify screening the product prior to dry hammermilling. This decreases the amount of material that needs to run through the dry hammermilling process.

Green chip shredding and dry hammermilling must be evaluated together to minimize connected horsepower. Recycling a percentage of dry hammermill air is also gaining traction in wood pellet plant design.

A properly designed air recycle system will decrease the amount of air exhausting to emission control equipment, while having minimal impact on the dry hammermilling efficiency. Minimizing the amount of air needing to be permitted is a common goal of all wood pellet producers.

BIOMASSMAGAZINE.COM 37

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