2015 December Biomass Magazine

Page 1

December 2015

Going With The Flow Complying With Clean Power Plan Page 12

Plus: UK Policy Hinders Bioenergy Conversions Page 22

And:

Oil ReďŹ nery Turns Renewable Diesel Plant Page 32

www.biomassmagazine.com

DECEMBER 2015 | VOLUME 9 | ISSUE 12

POWER

06 EDITOR’S NOTE Sitting Pretty?

10 NEWS

By Tim Portz

11 COLUMN Biomass: A Global Carbon Reduction Strategy

07 INDUSTRY EVENTS 08 BUSINESS BRIEFS

By Bob Cleaves

12 FEATURE Planning for Compliance

34 MARKETPLACE

Utilities are in early stages of developing strategies to comply with the Clean Power Plan. Those already using or familiar with biomass may be at an advantage. By Katie Fletcher

PELLETS

16 NEWS

17 COLUMN Industry Challenges Lead to Change, Growth By Bill Bell

18 DEPARTMENT An Appetite for Acquisition

12

Pellet producer Northeast Wood Products has an eye for buying distressed or idled assets and bringing them back to life. By Anna Simet

THERMAL

20 NEWS

21 COLUMN Regional Visions for Wood Heat By Ben Bell-Walker

22 FEATURE The UK’s Conversion Diversion Political control in the United Kingdom has changed dramatically, and as a result, so have the incentives and push toward renewable energy. By Amanda Saint

22

BIOGAS

26 NEWS

27 COLUMN Biogas Integration for Cellulosic Ethanol Production By Amanda Bilek

28 DEPARTMENT Roeslein’s Perfect Fit Roeslein Alternative Energy is well underway with potentially t he largest swine-based AD project in history. By Tim Portz

ON THE COVER:

Originally designed to burn coal, Minnesota Power's Hibbard Renewable Energy Center was retrofitted to combust biomass in 1985. Today, it cofires a small amount of coal along with wood waste. PHOTO: MINNESOTA POWER

ADVANCED BIOFUELS & CHEMICALS

30 NEWS

31 COLUMN A Missed Opportunity for Biofuels By Michael McAdams

32 DEPARTMENT A Transformative Project: Total’s La Mède Conversion

Total S.A. is retrofitting a French oil refinery to produce 170 MMgy of renewable diesel. By Ron Kotrba

DECEMBER 2015 | BIOMASS MAGAZINE 3

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¦EDITOR’S NOTE EDITORIAL PRESIDENT & EDITOR IN CHIEF Tom Bryan tbryan@bbiinternational.com VICE PRESIDENT OF CONTENT & EXECUTIVE EDITOR Tim Portz tportz@bbiinternational.com MANAGING EDITOR Anna Simet asimet@bbiinternational.com

Sitting Pretty?

NEWS EDITOR Erin Voegele evoegele@bbiinternational.com ASSOCIATE WRITER Katie Fletcher kfletcher@bbiinternational.com COPY EDITOR Jan Tellmann jtellmann@bbiinternational.com

ART ART DIRECTOR Jaci Satterlund jsatterlund@bbiinternational.com GRAPHIC DESIGNER Raquel Boushee rboushee@bbiinternational.com

For 2015’s final installment of Biomass Magazine, our team dug into stories of technology deployment reinvigorating, reimagining or resurrecting existing industrial sites. Converting TIM PORTZ VICE PRESIDENT OF CONTENT fossil fuel assets into renewable ones is trend& EXECUTIVE EDITOR tportz@bbiinternational.com ing in the energy business, and for good reason. Conversions leverage a great deal of what is already there, making investments in new plants, transmission lines or pipelines unnecessary. Anna Simet’s page-18 story, “An Appetite for Acquisition,” reveals that, sometimes, the attributes an existing site must have in order to offer a developer an economic advantage are fewer than one might imagine. In Simet’s story, Northeast Wood Products found paved roads, rail line, existing storage and proximity to the Tennessee River reason enough to buy space at a long-shuttered ethanol plant, where the company is in the midst of building a wood pellet plant. In his story about the conversion of a Total refinery to a renewable diesel plant in the south of France, “A Transformative Project: Total’s La Mède Conversion,” on page 32, Senior Editor Ron Kotrba learned that a move toward a renewable product was the facility’s only chance at generating a profit. Finally, I recommend reading two of this month’s features in succession: Associate Editor Katie Fletcher’s page-13 feature about the opportunity for biomass in the Clean Power Plan, and “Conversion Diversion,” freelance writer Amanda Saint’s page-23 piece, which, as a result of the United Kingdom’s newly established conservative majority’s attitudes regarding renewable energy, demonstrates how elusive policy stability can be. Fletcher’s story finds that questions about how biomass might contribute to state plans to comply with the CPP are already emerging. Generating the most speculation is the forthcoming determination by the U.S. EPA’s Scientific Advisory Board as to how biogenic carbon emissions will be regulated. Minnesota Power’s Al Rudeck told Fletcher that this determination will “have an impact on how states look at which resources will be utilized in their plans.” Even if the SAB’s ruling is favorable, Saint’s piece illustrates that any policy, regardless of its vision or results, can be undone. Together, these stories make it clear that any advantage biomass wins via policy has to be viewed, to some degree, as a temporary condition. This is the last thing that project or technology developers and the investment community want to hear, but to suggest that the road to growth of the biomass sector will not continue to pass through uncertain policy landscapes is to ignore history.

6 BIOMASS MAGAZINE | DECEMBER 2015

PUBLISHING & SALES CHAIRMAN Mike Bryan mbryan@bbiinternational.com CEO Joe Bryan jbryan@bbiinternational.com VICE PRESIDENT OF OPERATIONS Matthew Spoor mspoor@bbiinternational.com SALES & MARKETING DIRECTOR John Nelson jnelson@bbiinternational.com BUSINESS DEVELOPMENT DIRECTOR Howard Brockhouse hbrockhouse@bbiinternational.com SENIOR ACCOUNT MANAGER Chip Shereck cshereck@bbiinternational.com ACCOUNT MANAGER Jeff Hogan jhogan@bbiinternational.com CIRCULATION MANAGER Jessica Beaudry jbeaudry@bbiinternational.com MARKETING & ADVERTISING MANAGER Marla DeFoe mdefoe@bbiinternational.com

EDITORIAL BOARD MEMBERS Chris Sharron, Western Oregon Wood Products Amanda Bilek, Great Plains Institute Stacy Cook, Koda Energy Ben Anderson, University of Iowa Justin Price, Evergreen Engineering Adam Sherman, Biomass Energy Resource Center

ADVERTISER INDEX¦ 36 8 10 33 4 2 7 26 35 24 29 9 16 25 19 15 30 5 20

2016 International Biomass Conference & Expo Agra Industries Airoflex Equipment Andritz Feed & Biofuel A/S Astec, Inc. CPM Global Biomass Group Detroit Stoker Company DI PIÙ Elliott Group ETA Florence Renewable Energies Hurst Boiler & Welding Co. Inc. KEITH Manufacturing Company Les Aciers J.P. Inc ProcessBarron TerraSource Global (Jeffrey Radaer) Vecoplan LLC West Salem Machinery Co. Williams Crusher Wolf Material Handling Systems

Subscriptions Biomass Magazine is free of charge to everyone with the exception of a shipping and handling charge of $49.95 for anyone outside the United States. To subscribe, visit www.BiomassMagazine. com or you can send your mailing address and payment (checks made out to BBI International) to Biomass Magazine Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. You can also fax a subscription form to 701-746-5367. Back Issues & Reprints Select back issues are available for $3.95 each, plus shipping. Article reprints are also available for a fee. For more information, contact us at 701-7468385 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 Managing 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.

COPYRIGHT © 2015 by BBI International

Biomass Magazine: (USPS No. 5336) December 2015, Vol. 9, Issue 12. Biomass Magazine is published monthly by BBI International. Principal Office: 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. Periodicals Postage Paid at Grand Forks, North Dakota and additional mailing offices. POSTMASTER: Send address changes to Biomass Magazine/Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, North Dakota 58203. Please recycle this magazine and remove inserts or samples before recycling TM

INDUSTRY EVENTSÂŚ

Canadian Bioeconomy Conference NOVEMBER 30-DECEMBER 2, 2015

Sheraton Vancouver Wall Centre Vancouver, British Columbia The second annual Canadian Bioeconomy Conference is the latest from over a decade of renewable fuels events hosted by the CRFA. It brings together industry leaders in North America's bioeconomy, policy makers, elected officials and true innovators across the bioeconomy. 613-594-5528 | http://greenfuels.org

Global Pellet Market Outlook Summit APRIL 11, 2016

Charlotte Convention Center Charlotte, North Carolina The Global Pellet Market Outlook Summit will offer attendees a one-day, intensive exploration of the biomass industry’s most dynamic market segment. Fueled by global policies aimed at reducing the carbon intensity of energy products, the market for wood pellets has grown steadily since the early 2000s. While industry forecasts about the rate of growth may vary, the consensus is that global demand will continue to rise for the next decade. 866-746-8385 | www.biomassconference.com

International Biomass Conference & Expo APRIL 11-14, 2016

Charlotte Convention Center Charlotte, North Carolina Organized by BBI International and produced by Biomass Magazine, this event brings current and future producers of bioenergy and biobased products together with waste generators, energy crop growers, municipal leaders, utility executives, technology providers, equipment manufacturers, project developers, investors and policy makers. It’s a true one-stop shop—the world’s premier educational and networking junction for all biomass industries. 866-746-8385 | www.biomassconference.com

International Fuel Ethanol Workshop & Expo JUNE 20-23, 2016

Wisconsin Center Milwaukee, Wisconsin The FEW provides the global ethanol industry with cutting-edge content and unparalleled networking opportunities in a dynamic business-tobusiness environment. The FEW is the largest, longest-running ethanol conference in the world—and the only event powered by Ethanol Producer Magazine. 866-746-8385 | www.fuelethanolworkshop.com

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8 BIOMASS MAGAZINE | DECEMBER 2015

Business Briefs

PEOPLE, PRODUCTS & PARTNERSHIPS

Chatterji appointed Velocys nonexecutive director Velocys plc, a smaller-scale gas-to-liquids company, has appointed Mark Chatterji as a nonexecutive director. Chatterji was appointed chairman of the audit committee in place of Jan Verloop, who will continue to act as a member of that committee, as well as a member of the Chatterji remuneration and nominations and governance committees. Chatterji was previously chief financial officer and executive vice president commercial of Woodside Petroleum Ltd. Prior to joining Woodside, he was a vice president in the investment banking division of Goldman Sachs in New York. He has also held various positions at Atlantic Richfield Company (now part of BP plc), Merrill Lynch, and the U.S. Army. Chatterji holds a master’s degree of business administration from the Wharton School at the University of Pennsylvania, and a bachelor’s degree in science from Georgetown University. Collicutt expands service offerings Collicutt Energy Inc., one of the largest providers of power generation systems in the western U.S., announced it has expanded its service offerings by providing emissions permitting services. Collicutt will now assist customers with the entire permitting process, registering equipment with any of the 35 different air districts within California. The company’s emissions permitting services include completing and preparing application paperwork, providing emission data, delivering completed applications along with necessary accompanying paperwork to air quality districts, executing public notice processes, monitoring the permitting process, and communicating with the assigned engineer. Dust Control Technologies launches mobile odor control system Dust Control Technologies has announced a new heated model in its lineup of mobile equipment engineered to manage outdoor odor vapor from Dust Control Technologies landfills, waste treatment facilities, livestock operations, paper mills, food processing plants and other operations that experience cold weather. The OdorBoss 60G with Heat by DCT combines an enclosure with insulation, heat tracing and internal heat generation to protect equipment and components during operation and storage in freezing conditions. Originally developed at the request of a customer in the Midwest, the design is a versatile, effective odor control mechanism suitable for year-round use.

BUSINESS BRIEFSÂŚ

The unit uses a mixture of water and odor treatment agents to distribute a specially engineered mist over great distances, via a powerful fan that propels the treatment into the air, where it can attach to odor vapor. The result is a dramatic reduction in both short- and long-range odor, without equipment clogging or downtime from frozen lines, helping companies remain compliant with environmental regulations and maintain good neighbor relations. Maher-Lewis joins EcoEngineers Renewable identification number (RIN) management company EcoEngineers has hired a new renewable fuel standard (RFS) program manager, Anita Maher-Lewis. In her new role, Maher-Lewis oversees EcoEngineers’ compliance program including RFS registration, RIN management and quality assurance programs. Maher-Lewis Maher-Lewis has more than 20 years of experience in the environmental and regulatory arena. Prior to joining EcoEngineers, she worked in the consulting engineering industry as a client services manager and team leader. Stora Enso hires van de Ven Stora Enso welcomes Arno van de Ven as senior vice president (SVP) of innovation in its biomaterials division. With over 25 years of experience in the chemical industry, van de Ven has worked in the field of bioeconomy and new innovations for several years. Van de Ven was most recently SVP of business development in biomaterials and Pharma van de Ven at Corbion Purac. He has worked at a range of companies including DSM, Noveon/Goodrich, Ferro Corp. and CSM. Van de Ven earned his bachelor’s degree in engineering from Tilburg University in the Netherlands, majoring in business administration and supply chain and received a Master of Business Administration from the transnational University Limburg in Belgium. Rural Energy earns premium accreditation Biomass distributor and installer Rural Energy has successfully qualified for ISO 9001 and 14001 certification. These internationally renowned standards uphold quality levels in almost all technology and manufacturing sectors across the globe. Rural Energy achieved joint certification in just 27 days, passing the comprehensive United Kingdom Accreditation Service certification audit with the help of business development and quality management company Heron Standardise. Rural Energy has more than 12 years experience in biomass technology in the U.K., offering full turnkey service from survey and design, through to distribution, installation and on-going maintenance.

DECEMBER 2015 | BIOMASS MAGAZINE 9

PowerNews Clean Power Plan published in Federal Register The U.S. EPA’s Clean Power Plan is officially on the books, just under 15 months after it was first introduced. The rules of the CPP, published in the Federal Register on Oct. 23, were initially proposed in June 2014. They require existing power plants to reduce carbon dioxide emissions by 32 percent from 2005 levels by 2030, and call on each state to craft its own plan based on policy and resources of its choosing. The final rules were released in early August following a public comment period, and contained several key changes from the proU.S. Fossil Fuel-Fired Electricity Generating Facilities by Size posed rules. SOURCE: NATIONAL ELECTRIC ENERGY DATA SYSTEM (NEEDS) V.5.13 Biomass stakeholders believe the CPP is a positive development for biomass facilities that In response to the CPP, many lawsuits coalition of 24 states. The EPA has said the came online after Jan. 1, 2013, and contains little were filed in the U.S. Court of Appeals in the rules are legal and believes it will withstand chaldownside for plants that are older. District of Columbia on Oct. 23, including a lenges.

DTE Energy to close Wisconsin biomass plant DTE Energy Services has announced it will close its Cassville, Wisconsin, biomass power plant, known as the E.J. Stoneman Electrical Station. Company subsidiary DTE Stoneman LLC and Dairyland Power Corp. have mutually agreed to terminate their power purchase agreement for the 40 MW of power being generated at the station, confirmed John Reis, DTE Energy Services asset management director.

10 BIOMASS MAGAZINE | DECEMBER 2015

The former coal-burning facility was originally owned by Dairyland and was brought into service in 1951. DTE purchased the plant in 2008 and converted it to biomass, bringing it back online in October 2010. Various types of wood waste fuel the plant, including residue from forestry and tree trimming operations, railroad ties, demolition waste and sawdust. Reis said that the plant, which employs 27, is no longer an economically viable project because the cost of renewable energy is decreasing, while

the cost to transport biomass fuel is increasing significantly in the Midwest region. “Both companies appreciate the opportunity to be part of the community through the years and will work collaboratively with local officials to determine the best use for the plant,” Reis said, adding that the company has not started seeking buyers. Closure of the plant is pending approval from the regional transmission system operator, which is expected to occur before the year’s end.

POWER¦

Biomass: A Global Carbon Reduction Strategy BY BOB CLEAVES

World leaders convened in Paris the week of Nov. 9 to discuss ways to jointly address climate change. Along with wind and solar deployment, and the possibility of developing methods of carbon capture, we urge these leaders to acknowledge the role of biomass in reducing carbon in the atmosphere. Global momentum continues to grow in support of increased renewable energy generation. With the introduction of the Clean Power Plan by the U.S., and last year’s agreement between the world’s two largest carbon emitters, the U.S. and China, to significantly lower emissions, decades of talk are becoming real action to replace fossil fuel generation. The U.S. EPA joined many international governments by exempting biomass from carbon emissions reduction requirements under the Clean Power Plan, and biomass can play a similar role in even more countries. The most discussed forms of renewable energy are typically wind and solar, but biomass can and should play a key role in updating energy infrastructure. Regardless of the many advances being made to wind and solar technology, the fact remains that they depend on the weather for generation. Thus, these two sources of energy alone can’t be expected to power large areas indefinitely. Biomass and other renewable baseload sources like hydropower, waste to energy and geothermal must be included as part of the mix to generate electricity at peak times. There is also a direct role for biomass in reducing fossil fuel generation. Last year, The Earth Partners conducted a study on the potential of cofiring in the U.S. and China. It found that sustainable biomass cofiring at existing power plants has the potential to

replace over 25 percent of coal use in each country, representing 1 gigaton of potential carbon emissions reductions per year. Cofiring can also provide the added benefits of preserving land and contributing to forest maintenance. There is a lot that world leaders can do to ensure that we can take full advantage of available biomass fuel. In recent years, the U.S. DOE and Union of Concerned Scientists have each released studies that show that there is much more biomass available than we are currently using as fuel. In many regions, both developing and developed, discarded organic fuels are readily available and adaptable, but research and development funding is needed to learn more about how to convert them into effective biomass power generation. Agricultural waste can be a particularly good source of fuel, providing the extra benefit of getting rid of waste. There are many obstacles to converting these fuels into reliable electricity, however. It is expensive to build a biomass facility, and to collect and transport fuel. More study is needed to identify solutions to these problems, bring down the cost for small-scale facilities, and find ways to adapt equipment to different types of organic materials and weather conditions. The Paris conference is a solid step toward international cooperation in addressing climate change. Commitments to reducing carbon in the atmosphere should include biomass.

Author: Bob Cleaves President, Biomass Power Association bob@biomasspowerassociation.com www.biomasspowerassociation.com

DECEMBER 2015 | BIOMASS MAGAZINE 11

BIOMASS BOOST: The Blandin paper and pulp mill near Grand Rapids, Minnesota, is one of Minnesota Power's largest customers, powered in part by wood waste generated on site. PHOTO: MINNESOTA POWER

12 BIOMASS MAGAZINE | DECEMBER 2015

POWER¦

Planning For

Compliance Months have passed since the release of the Clean Power Plan final rules, and states and utilities are busy charting their paths forward. BY KATIE FLETCHER

O

n Aug. 3, President Obama and the U.S. EPA announced the final version of the Clean Power Plan. That same day, EPA issued final carbon pollution standards for new, modified and reconstructed power plants, and proposed a federal plan and model rule to assist states in implementing the CPP. These are the firstever national standards that address carbon pollution from power plants. Nationwide, the CPP will help cut carbon pollution from the power sector by 32 percent from 2005 levels, by 2030. Carrying out EPA’s obligations under section 111(d) of the Clean Air Act, the CPP sets CO2 emissions performance rates for affected power plants that reflect the best system of emission reduction (BSER), and leaves it up to the states to develop their own plans to achieve those rates, with guidelines for the development, submittal and implementation of those plans. The agency describes the steps toward compliance as a glide path, by having mandatory reductions begin in 2022, and the phasing in of the BSER measures between 2022 and 2029 to enable states the ability to chart their own individual emissions reduction trajectories. By September 2016, states will need to submit either a final plan or an initial submittal with a request for an extension. States requesting an extension will have until September 2018 to submit final plans, either alone or in cooperation with other states. Since August, states and their utilities have begun reviewing the ruling and using that analysis to plan how they will incorporate low-emitting, renewable energy sources into state implementation plans (SIPs) to comply within EPA’s timeline. There are two types of CPP state plans: a source-based “emissions standards” plan and a “state measures” plan. There are also two category-specific emission performance rates to calculate state ratebased goals and state mass-based goals that reflect a state’s mix of affected power plants. This gives states

a range of choices in developing their plans, particularly for those seeking to adopt mass-based trading programs or other statewide policy measures. Within the CPP are three building blocks to help states gradually meet their goals. Building block one is improved efficiency at power plants, the second building block is shifting generation from higher-emitting coal to lower-emitting natural gas power plants, and the third building block is shifting generation to zero-emitting renewables.

Yet to be Seen

Biomass is one contender in states’ range of energy sources. The Biomass Power Association is advocating for the utmost benefits to the biomass industry by helping states and utilities understand the implications surrounding biomass in carbon reduction plans. The CPP is potentially a very positive development for biomass facilities that came online on or after Jan. 1, 2013, according to Bob Cleaves, president and CEO of the BPA. He adds that for older facilities, the plan holds little downside and, encouragingly, won’t regulate biomass as a carbon-emitting energy source. What remains to be seen is how facilities can become classified as “qualified biomass.” This will have a lot to do with which feedstocks states include in their plans, subject to the EPA’s approval. The agency is also accepting comments on its model federal plan, which will go into effect in states that don’t submit their own plans. As a means to identify the types of feedstocks used in each state where biomass is an energy source, the BPA developed a survey. “When the CPP came out in August, it became very clear that this question of feedstocks is going to be an important one to answer, so we put together this survey,” says Carrie Annand, vice president of external affairs with the BPA. “What we hope to get from it is just a really defined list of all of the feedstock that not only our members, but everyone involved in the biomass industry, are using DECEMBER 2015 | BIOMASS MAGAZINE 13

¦POWER for fuel, and we’re going to use that to comment back to the EPA on the proposed federal implementation plan, which is the model plan that will go into effect if they don’t submit a plan by next September.” The EPA tasked the Scientific Advisory Board to determine how to account for emissions from all biogenic sources. The SAB’s conclusion about biomass may soon be released, but how these proceedings will be reflected in the CPP and other policies is still unknown. “It’s still pretty unclear exactly what the impact is going to be,” Annand says. The biomass industry is working together on the ruling, Annand continues. “I think everyone is still trying to come to terms with how the CPP is going to affect their industry,” she says. “For biomass, the most important thing to note is that biomass is recognized in the CPP as a low-emitting renewable, so that means that it’s not included as a fossil fuel, as an affected electric generating unit.” In other words, biomass can be viewed by states as a reliable, baseload technology that can fill in the gaps if, and when, they start to reduce power from fossil fuel sources, Annand says. She explains that a lot more wind and solar developments are going to be able to participate in SIPs, and much of the existing biomass fleet just won’t have that opportunity, so it remains to be seen how states are going to build biomass into their plans. Utility companies view the uncertainty surrounding how biomass will count towards CPP compliance as an issue. “The notion of a “qualified biomass,” in our view, should be any biomass from any source—as opposed to just closed loop, or biomass grown specifically for bioenergy utilization,” says Al Rudeck, vice president of strategy and planning with Minnesota Power. “We anticipate the EPA’s SAB determination on qualifying biomass will have an impact on how states look at which resources will be utilized in their plans.” According to Annand, some of BPA’s utility members are looking at the fact that they have biomass assets as an advantage, but for companies without biomass, she could not speculate as to what their outlook is on incorporating new biomass assets. Minnesota Power has been working on reshaping its energy mix from predominately coal to its EnergyForward mix of one-third renewables, coal and natural gas. As late as 2005, MP was a predominately coal-based utility with about 95 percent of its power supply coming from coal-based energy. “Our renew14 BIOMASS MAGAZINE | DECEMBER 2015

able strategy includes wind, water, wood and wavelength (solar), and we see a role for biomass to play in this future renewable energy portfolio, as it is an abundant natural resource, particularly here in northeastern Minnesota,” Rudeck says. South Carolina utility Santee Cooper also has been working toward reducing its carbon emissions. “The notion that we are heading toward a carbon-constrained world is not a surprise. Because of that, Santee Cooper actually started planning a decade or more ago for this very moment,” says Mollie Gore, manager of corporate communications with Santee Cooper. The company set a goal that by 2020, 40 percent of its customers’ energy needs would be met through nongreenhouse gas emitting sources. “We know we’re going to have to, we know we need to and we know we will be adding renewables, taking other steps to, again, further impact that emissions reduction,” Gore says. The company is in the process of figuring out exactly what that looks like, she adds, but indicates that biomass is a big part of the company’s renewable portfolio. The company currently generates 130 MW from renewables, with about 100 MW of it from biomass. “That is a resource that is available in South Carolina, so it’s been a good fit for us,” Gore says.

Compliance Coordination

Planning for compliance is still in the early stages. “In our view, the rule represents among the most sweeping regulations that EPA has ever developed,” Rudeck says. “It is quite complex, and several important technical documents were not released by EPA until it was published in the Federal Register on Oct. 23, so Minnesota Power continues to evaluate the rule and its potential impacts.” Rudeck says that the SIPs, specifically, will be an important part of finalizing compliance plans around the rule, if it should survive legal challenge. EPA believes the CPP is lawful and will, indeed, withstand the lawsuits currently filed, which includes 24 states. “State coordination will be most important—with our Minnesota Pollution Control Agency, Public Utilities Commission and Large Power customers, other regional utilities and other interested stakeholders,” Rudeck says. “A CPP that meets state stakeholder expectations is under development and Minnesota Power is actively engaged. As well, we are coordinating with our industry partners in North Dakota,

as a large percentage of North Dakota power production is utilized by Minnesota customers, including some on our system.” Biomass comprises about 2 percent of MP’s energy mix, but represents about 100 MW of capacity on the company’s system. “We see this biomass footprint remaining relatively constant moving forward, as any biomass additions are expected to be modest and will likely come from increased biomass percentage utilization for the most part,” Rudeck says. “As laid out in our 2015 Integrated Resource Plan, we are planning solar and natural gas additions and a major new 500-kilovolt transmission line called the Great Northern Transmission Line to bring clean Canadian Hydro to our system.” He adds that MP believes diversity of the nation’s energy supply is important, and coal can and needs to remain in the mix. At this time, Rudeck says, wind energy certainly has an economic advantage over biomass in the Midwest. “That said, we like biomass, as it is a reliable and dispatchable energy source, so we believe it can and should be part of a balanced, diversified energy mix,” he says. “The local nature of biomass, and the role harvest and utilization of coproduct wood waste plays must also not be overlooked.” Another point Rudeck mentions that in many federal forests, and some state forests, poor management practices have left forests unhealthy and prone to fire hazards. “We think a marriage of healthy and sustainable forest practices with niche biomass generating facilities, particularly in combined-heat-and-power design mode can make a lot of sense.” MP’s and Santee Cooper’s paths toward compliance will differ, and the CPP was designed that way. “I do know of some states that are moving right ahead with their plans and are asking utilities and others involved in the energy industry to contribute and to comment on their sources of power and how they can help meet the standards,” Annand says. “It probably will vary from state to state, but I imagine that there is probably a lot of coordination going on, if what I’ve seen so far is any indication.” Rudeck acknowledges that each state will play a critical role in how the rule is shaped and implemented, and as such, working with Minnesota stakeholders to recognize biomass as a part of the path forward is something MP is working on. Gore says that as a utility, Santee Cooper is focused on working with other states’ stake-

POWER¦ holders on exactly what the state’s response Santee Cooper has its Pinelands Biomass needs to be. “Early on, as the CPP authors project with EDF Renewable Energy, which were doing their work in Washington, South consists of two nominal 17.8-MW generating Carolina stakeholders got together and re- facilities located in Allendale and Dorchester ally began reviewing the situation—talking Counties in South Carolina. The two projects about different initiatives and building spread- interconnect to Santee Cooper’s transmission sheets—all that we needed to do to be ready system adjacent to the sites with the generfor when the draft plan was announced and ated renewable energy contracted to the utilthen coordinate a response for when we had ity under 30-year power purchase agreements. common things to say.” As for new projects, however, Gore says the Biomass cofiring continues to be imple- company is too early in the planning process to mented at foreign power plants, but has yet to identify specific projects for compliance. “Sanbe deployed to the same degree in the U.S. “As tee Cooper participates in the South Carolina long as SIPs recognize biomass generation as Biomass Council, and we are part of a group %LRPDVV 0DJD]LQH a viable means to comply with the CPP—ei- there advocating for biomass credit as part of 0HVVDJH ´'HVLJQLQJ ,QQRYDWLRQµ ther under a mass-based program or receiving the Clean Power Plan,” Gore says. “Beyond emission reduction credits under a rate-based that, corporately we are analyzing some of the program, companies will certainly consider different scenarios that could impact whether biomass cofiring, so long as it can be done our existing biomass plants count, but we safely and economically,” Rudeck says. “Natu- aren’t far enough down that road to speak ral gas and wind are formidable competitors to about it. The biomass industry is a big part of biomass cofiring, both from an economic and the South Carolina economy, though, and so efficiency standpoint. We see biomass playing it would definitely be to the state’s benefit to more of a niche role, where companies could get as much credit as possible under the plan.” keep existing facilities operating and take the edge off the carbon dioxide emissions with some cofiring.” MP believes more work needs to be done to advance the safety and economics of biomass cofiring for it to become a widespread, viable option, but many in the biomass industry believe there’s great potential, especially for cofiring with wood pellets.

The BPA remains hopeful that the CPP could positively impact the biomass industry. “We see the CPP as definitely encouraging for biomass, and it is still unclear as to exactly how states are going to be formulating their plans, but we’re hopeful that biomass is going to play a big role,” Annand says. “We’re looking forward to working with states to make sure they know how to incorporate biomass and that all biomass assets are able to be counted in some way.” Now, with the ruling out, questions remain, but utilities have begun their preparation toward compliance. “Now that we do have a final rule and we have a clear target, we are already rolling up our sleeves and getting to work,” Gore says. “We'll comply and be ready when the deadlines roll around.” Author: Katie Fletcher Associate Editor, Biomass Magazine 701-738-4920 kfletcher@bbiinternational.com

Forward-Looking Path

Both MP and Santee Cooper have biomass facilities, but not all that came online after the EPA’s cutoff. “One of our concerns is that EPA has arbitrarily selected 2013 as a new benchmark for qualifying actions—whether they are adding renewable energy, improving efficiency at customer sites or at our power plants, we believe this is a mistake and states will see through this and come up with solutions that work for each individual jurisdiction,” Rudeck says. He says MP’s Hibbard Renewable Energy Center is somewhat in the scope of the EPA’s CPP, as it was originally a coal-fired power plant repurposed to provide steam to Lake Superior Paper Industries, now owned by Verso. “Minnesota Power recently increased the amount of biomass to about 95 percent of the HREC’s fuel supply, in response to the EPA’s Industrial Boiler MACT rule, which will be part of the state’s implementation plan,” Rudeck says.

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PelletNews Pellet stove emissions study released An independent assessment of popular pellet stoves conducted by the Alliance for Green Heat found that pellet stoves, unlike most wood stoves, can achieve low levels of emissions in real world settings that are in line with laboratory results. The AFGH ran a battery of tests on popular pellet stoves designed to approximate how they would perform in the real world, finding that half of the stoves operated as clean at the end of the 30-day test as they did at the beginning, and the others were only slightly dirtier. All six stoves, from the least to the most expensive, operated well and produced enough heat for a small- to medium-sized home in most of the U.S. One of the biggest differences was that the three more-expensive stoves (above $4,000) tested needed very little weekly cleaning and maintenance. The less-expensive stoves ($1,200 to $3,300) needed daily or at least biweekly cleaning of their burn pots and glass.

The study is part of a yearlong Pellet Stove Design Challenge that assesses the state of existing pellet stove technologies. The Design Challenge will culminate in a competition for the cleanest and most efficient stoves, modeled after the U.S. DOE’s Solar Decathlon. AFGH tested the England Stove Works 25-PDCVC, the Enviro M55 insert, the Harman Accentra 52i insert, the Piazzetta Sabrina, the Quadra-Fire Mt. Vernon AE, and the Ravelli RV80. The group assessed each stove on its cleanliness, efficiency, maintenance, heat output and visibility of glass. The overall winner was the Quadra-Fire Mt. Vernon AE, which received top marks in three of the five categories. The Harman Accentra received top marks in two of the five categories. The results of this study underscore that pellet stoves tend to burn substantially cleaner than wood stoves in real world settings, but it challenges the notion that pellet stoves generally

The rating system is on a scale from 1 to 5, with 5 being the best. The chart contains examples and does not suggest many other stoves are not cleaner or dirtier. SOURCE: NALLIANCE FOR GREEN HEAT

have higher efficiencies than wood stoves. The efficiencies of the six stoves were low to medium, which is partially the result of companies not having to test and report actual efficiency numbers. “Our testing confirmed that pellet stoves are an effective and affordable renewable energy technology,” said John Ackerly, president of the Alliance for Green Heat. “We hoped to see higher efficiencies, but efficiencies should improve in coming years.”

German Pellets to buy, convert Belgian coal plant The sale of German utility Eon’s Belgium 556-MW Langerlo coal-fired power plant to wood pellet producer German Pellets is expected to close this year. Eon has signed a share sale and purchase agreement with German Pellets, according to the company. Eon expects to close the deal in the coming months. The company had originally planned to convert the coal-fired plant into a 400-MW wood pellet-fueled biomass plant, but

then decided to look for an investor. "The biomass project in Langerlo no longer fits into the core strategy of the Eon group,” said Tom De Bruyckere, the Belgium spokesperson for Eon. “With an environmental permit, a building permit and a principled commitment to financial support by the Flemish energy regulator, the project had every chance to succeed. Eon therefore decided to look for a buyer for the project.”

German Pellets became the investor in the plant and plans to convert the power plant to burn biomass, according to Claudia Röhr, communication and marketing representative with German Pellets GmbH. Upon completion of the plant, German Pellets will have an annual production capacity of around 1.7 million metric tons of wood pellets in the U.S. alone. These volumes will be exported to Europe.

PELLET¦

Industry Challenges Lead to Change, Growth BY BILL BELL

“There’s something happening here; what it is ain’t exactly clear…” (Buffalo Springfield, “For What It’s Worth,” 1967) The low price of oil is clearly and severely impacting the sale of pellet heating equipment in our state. Efficiency Maine, which at one time was reporting installs of 30 incentivized pellet boiler systems per month, now reports 7 units installed in July, 3 in August, a bump up to 13 in September, but a leveling out thereafter. In addition, at least several of Maine’s four pellet manufacturers report cancelled orders for bagged pellets. And yet… Maine Energy Systems, founded and funded by well-known entrepreneur Les Otten, reports encouraging sales of its Okefen pellet boilers in other Northeastern states where state incentives are becoming better established. The firm also reports that the public is increasingly looking at the environmental impact of fossil fuels as reason for switching to wood. In the world of environmental concerns, in Maine, there has been little common cause between wind power and biomass advocates. If anything, there has been a lingering concern that thermal biomass might grab some of the renewable energy credits—too complicated to explain here—currently of potential benefit to wind power. Then, suddenly, a major wind power firm, EDP Renewables, seeking regulatory approval for a huge project in northern Maine, put on the table $2 million in support of homeowner installation of pellet heating (and heat pumps). The regulatory proceedings involve lengthy negotiations, but proponents are optimistic. And we’re happy to be chosen as a major item (bait) in the “tangible benefits” section of the application. Efficiency Maine’s trustees have just voted to accept and administer the funds, if awarded. In the long run, we’ll be fine. Our website and Facebook page record a steadily increasing number of hits. We are no longer viewed as an exotic technology. Maine’s Common Ground Fair, which every fall attracts many thousands of back-to-the-landers from throughout New England, revealed ongoing and well-informed interest in our heating systems. Maine Energy System’s new product, a pellet-fueled furnace for hot-air-ducted homes, just received prompt Efficiency Maine approval for the

same 30 percent incentive funding accorded pellet boilers. Mainers, living in what the U.S. census defines as the most rural state in the nation, are now realizing that natural gas won’t be available to everyone. And the natural gas firms are having growing problems of their own. Also, in the long run, to politely paraphrase John Maynard Keynes, we won’t all be here. As previously reported in this magazine, Geneva Wood Fuels, the pellet plant in Strong, Maine, which successfully became a major supplier to the large-retail bagged market, has been acquired by Lignetics Inc. We welcome this sign of the national industry’s confidence in Maine. However, our Maine Pellet Fuels Association will miss the always challenging input from Geneva’s former owner, Jonathan Kahn, who served as our treasurer. As part of an interesting development, the Maine Woods Pellet Co. plant in Athens, Maine, will benefit from $556,000 in grant funds that USDA just awarded to its colocated firm, Athens Energy LLC, for construction of a wood-fueled electricity-generating facility. This facility is also receiving significant investment support from the state of Maine. Past spikes in the cost of gridsupplied electricity forced the pellet plant to severely cut production right in the middle of winter pellet demand. Logger Bob Linkletter, the owner of both facilities, is ensuring that this will not happen again. The Athens linking of biomass thermal to biomass electric could well be a harbinger of more such synergies. National Bioenergy Day observances included a film clip featuring the cooperation between Northeast Pellets and the ReEnergy biomass electricity plant right next door in Ashland, Maine. ReEnergy is working with us to strengthen the Biomass Caucus and support for the BTU Act in Congress, and will be participating in our Maine Pellet Fuels Association’s upcoming annual meeting. There will be additional modifications in our industry as ridiculously low oil prices continue. We are fortunate for our system in which stress creates change and then growth. Author: Bill Bell Executive Director, Maine Pellet Fuels Association 207-752-1392 feedalliance@gwi.net

DECEMBER 2015 | BIOMASS MAGAZINE 17

¦PELLET

DEPARTMENT

PELLET PIT STOP: These finished product steel silos at Northeast Wood Products' Jasper facility will store pellets prior to bagging or load-up to rail hopper cars for bulk sales. PHOTO: NORTHEAST WOOD PRODUCTS

An Appetite for Acquisition Currently focused on converting a shuttered ethanol facility into a pellet plant, Northeast Wood Products is well on its way to reaching its five-year goal of 1.5 million tons of annual capacity. BY ANNA SIMET

I

n 2014, the Mohegan Tribe of Connecticut jumped into the U.S. wood pellet market with an aggressive series of acquisitions, first purchasing Pennington Seed Co.’s 65,000-metric-ton pellet plant in Peebles, Ohio, and shortly thereafter, its 65,000-metric-ton-per-year pellet plant in Ligonier, Indiana. In addition, Northeast Wood Products—the resulting subsidiary— purchased some equipment and assets at Pennington’s Kenbridge, Virginia, facility, as well as some pellet manufacturing machines from Anderson Hardwood in Louisville, Kentucky. Just months after these acquisitions, NWP picked up a shuttered ethanol plant in Jasper, Tennessee, with plans to convert the site into a pellet production facility. While the company’s strategy has been aimed at diver-

18 BIOMASS MAGAZINE | DECEMBER 2015

sifying the tribe’s revenue while capitalizing on a seemingly booming industry, it has also been to squeeze maximum value out of each transaction by recovering, revamping and converting existing assets. Perhaps the most standout purchase to date has been the Jasper facility, a site previously owned by Tennol Ethanol. “The plant was shuttered in the early ‘80s,” says Guy Mozzicato, president of NWP. Mozzicato, an entrepreneur who has held executive positions in a broad range of public and privately held businesses, took the reins as president of NWP upon its conception, and has played a lead role in forging the young company full steam ahead. The Jasper property is in excess of 230 acres, Mazzicato says—an excessive amount of land for just one tenant—so at this point,

the site is shared between NWP and existing tenant Carbellus, a company that manufactures industrial products including tractor tire ballast fluids, acid oils, yellow greases, and biodiesel feedstock. “We’re on a little over five acres there,” Mozzicato says. “The biofuel folks beside us have a lab in their building, and we’ll comingle there. “ Prior to Carbellus moving in, the site changed hands several times over the years, its purchasers seeing little success. Tennol built the $72 million, 25 MMgy ethanol plant in 1984, but didn’t fare well in producing fuel and filed for bankruptcy four years later. After another company purchased the facility from the U.S. DOE for a fraction of its value in 1994, it, too, went bankrupt. The site was then acquired by a bank and eyed by numerous companies over the years, until Carbellus

PELLETÂŚ

bought it in 2009. NWP purchased its space at the site in 2014, and with an eye for opportunity, the company is reaping the benefits of numerous existing assets and infrastructure.

Advantageous Assets

With existing scales, fenced-in property, paved roads, buildings and silos, the original infrastructure lends itself well to a pellet manufacturing operation. “We originally intended to use the existing silos to store fiber, but we opted to build a separate building adjoining the pellet building,� Mozzicato says. “All of the conveyors were in place, and some we reactivated, but for most part we replaced with new.� With 40 rail cars on site, property abutting the Tennessee River, and 2,500 feet preapproved for dock and barge siting, Mozzicato points to the potential the facility holds moving forward. “We have 10,000 tons of bulk storage onsite for unfinished product, and we have existing silos that would hold an additional 10,000 tons, but we’re not utilizing those in the first phase of the project,� he

says. “We envision coming out of the box by the end of this year at 120,000 or 125,000 tons of production, then in phase two next year with a similar additional throughput.� Initial operations will begin with dry fiber production, but phase two will include bringing in a dryer. “When we installed the machinery, we brought in electricity amperage for a second line—all expansions are in place, and they’re constructed to drop a second machine right next to the one we have,� Mozzicato says. “We’ve also built an R&D center there, fully separate of the pellet lines we have installed, given we had the extra space and the building for it. It’s complete with screens, hammer mills and a dryer, so we can test various fiber sources for a number of different products we could produce in this facility, or other facilities we see in the future.� The site is also located near flooring manufacturers, sawmills and Southeast wood baskets, convenient for sourcing and transporting feedstock. Mozzicato declined to disclose the es-

timated savings by acquiring an existing site rather than a green field site, but says, “It makes a lot of sense, if you can utilize a shuttered facility, and some of the infrastructure is sound and manageable‌we’ve actually had very little challenges, the project has unfolded nearly exactly as planned.â€? While NWP’s Peebles and Ligonier facilities are now in full production, each putting out approximately 65,000 tons of the Thermaglo brand pellets annually, Mozzicato says that besides its focus on the domestic heating market, the company is looking at expanding into other areas aside from heating pellets, possible briquettes, fire logs or barbeque pellets. It won’t be long before NWP makes its next move, he adds. “We have options on additional properties, are working on other opportunities, and our intention is to continue to expand.â€? Author: Anna Simet Managing Editor, Biomass Magazine asimet@bbiinternational.com 701-738-4961

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ThermalNews Report: UK falling short of renewable goals Carbon Connect has released report “Policy for Heat: Transforming the System," part two of the company's Future Heat Series, which considers both the supply and demand of heat in U.K. buildings. It concludes that at present, the U.K. is on track to fall short of its low-carbon heat targets. According to the U.K. Renewable Energy Association, missing the heat target has knock-on effects for the targets of other sectors, including transportation and renewable electricity. In the report, biomass is concluded to be an immediately available, sustainable and versatile source for low-carbon heat in the U.K., providing the majority of the supply to date, although more must be done to encourage the development of other technologies. Since 2005, the majority of new renewable heat has come from the use of biomass boilers, burning wood, other biomass and waste, with a notable up-

swing in wood-fired heating following the introduction of the renewable heat incentive (RHI) in 2011. According to the Committee on Climate Change, extending current policies into the 2020s will not deliver the emissions savings required to meet the fourth carbon budget period (2023-'27), with annual emissions around 18 percent above the level of the budget. The committee has identified buildings as one of the most cost-effective sectors in which Based on March 2015 Eurostat data, the U.K. is further to deliver these additional reductions behind its renewable energy targets than any other EU state. Current Department of Energy & PHOTO: CARBONCONNECT Climate Change projections suggest able energy targets than any other EU state; 9.9 that the RHI will not succeed in delivering the desired share of at least 12 percent for percent short of its 15 percent 2020 target. renewable heat. Based on March 2015 Eurostat data, the U.K. is now further behind its renew-

BWE contracts for biomass CHP plant in northern England On Sept. 17, the engineering, procurement and construction consortium formed by Burmeister & Wain Scandinavian Contractor A/S and Burmeister & Wain Energy A/S was awarded the contract for the design, supply and erection of a biomass combined heat-andpower plant (CHP) located in Cramlington in northern England. The client is Cramlington

20 BIOMASS MAGAZINE | DECEMBER 2015

Renewable Energy Development Ltd. of the U.K. The technology behind the 75-megawatt thermal, woodchip-fired boiler is being supplied by Burmeister & Wain Energy and represents the core of the Cramlington Plant, which is the fourth biomass boiler supplied by BWE in the U.K. since 2011.

The Cramlington Power Plant will supply electricity to the public power grid and provide heat for two pharmaceutical companies in proximity of the plant. Commercial operation is expected by the end of 2017.

THERMAL¦

Regional Visions for Wood Heat BY BEN BELL-WALKER

If you’ve ever traveled to the Pacific Northwest, one of the many impressions you’ll take away is the sheer abundance of forests and woody biomass. Some states, however, such as California, Idaho, Oregon, Washington, and Alaska face very different problems in managing their forests than the Northeast or the Midwest. The challenges are often related to climate change, most recently the occurrence of massive, unprecedented wildfires, closely followed by invasive species like the pine beetle. These common threats have created a need for collaboration of stakeholders in the West. BTEC, as the representative for biomass thermal on the national level and coordinating body for regional networks, has a vital interest in helping to develop solutions to these issues, and therefore was glad to attend the third-annual meeting of the Western Statewide Wood Energy Teams in The Dalles, Oregon, in late October. There, attendees witnessed the creation of truly regional vision for the future of woody biomass in the western U.S., when a group of about 60 state forestry, U.S. Forest Service, university, and private industry stakeholders gathered to discuss possibilities for collaboration and common challenges. An important benefit of the Statewide Wood Energy Team network is its ability to improve individual state’s biomass energy efforts, as the lessons learned by each team help them to consider innovative new policies and practices in support of the economy and environment and to assist in the sustainable growth of the biomass economy. Marcus Kauffman, biomass resource specialist at the Oregon Department of Forestry stated that “the Wood to Energy 2015 event showcased the many benefits that come from using wood for energy. Participants soaked up stories about energy savings for schools that switch to modern wood heating, liquid transportation fuels that lower your carbon footprint, and biochar products that increase plant yields and save water. In addition to wood-to-energy successes, attendees were intrigued and inspired by the latest developments in cross-laminated timber that could usher in new era of wooden multistory buildings. Up to speed on the latest developments and buoyed by a strong camaraderie, participants left the event ready to put what they learned to work back home.

In his keynote address, Charlie Niebling, partner at Innovative Natural Resource Solutions and chair of BTEC Policy Committee, stated that each region should strive to create and maintain a vibrant and sustainable biomass heating economy. He emphasized that despite geographic differences, the industry and its stakeholders greatly benefit by meeting regularly to share their experiences. Wood to Energy 2015 identified a variety of challenges, including the need for funding for prefeasibility studies, boiler commissioning, and maintaining the operation of current projects, particularly in remote rural communities. Karen Petersen from the University of Alaska discussed a number of innovative projects on Prince of Wales Island, Alaska. These projects featured rural island communities, some having schools of fewer than 20 students, and displayed how using biomass as a heating resource can help communities reduce their heating costs. They may be small, but these schools can be expensive to operate, particularly in relationship their tax bases. These schools were able to drastically cut heating costs and provide needed economic development through the installation of efficient cordwood hearing systems that also heat school greenhouses. The conversion to thermal biomass provided affordable year-round produce, jobs both on and off the campus, and educational resources for cash-strapped schools. Overall, the conference highlighted the power that a truly regional approach can have for our industry. This conference demonstrated that despite having matured unevenly across the U.S., the biomass heating industry can be a major contributor to the health and well-being of local economies and the environment. It is fair to say that no participant could have walked away from The Dalles gathering anything less than wiser from the experience, which, in turn, is likely to improve both their communities and the industry as a whole. Author: Ben Bell-Walker BTEC Technical Program Manager 202-596-3974 ben.bell-walker@biomassthermal.org

DECEMBER 2015 | BIOMASS MAGAZINE 21

Miscanthus is a feedstock U.K. power utility Drax is using to manufacture wood pellets burned at its converted power station. Unlike many, Drax has been relatively unaffected by the new government’s deep renewable energy investment cuts. PHOTO: DRAX

THERMAL¦

The UK’s Conversion Diversion The first six months of majority Conservative rule in the United Kingdom has been characterized by drastic budget cuts, including removal of subsidies for biomass power and other renewable energy. BY AMANDA SAINT

T

he United Kingdom’s new majority Conservative government is letting the world know that improving the country’s environmental sustainability and meeting greenhouse gas emission reduction targets is not high on its agenda. In just six months of being solely in charge, it has announced that funds allocated to growing the renewable energy sector will be cut dramatically, while higher investments in nuclear and fracking will be made. Since the May 2015 general election, the Department of Energy and Climate Change, led by Parliament member Amber Rudd in her role as energy and climate change secretary, has announced that subsidies available to both large- and small-scale renewables will be reduced or removed completely, and policies that protected them are being changed. While the Tories were in power in the previous coalition government, they launched a consultation on making changes to the grandfathering policy for future biomass cofiring and conversion projects in the Renewables Obligation. This concluded in January, and the fallout from that means hard times ahead for the biomass industry. Add to that the changes to the Renewable Heat Incentive, which has helped the U.K. biomass heat industry deliver around 23,000 pro-jects to date, the abolition of feed-in-tariffs, as well as the complete turnaround on the Zero Carbon Homes policy, and it isn’t difficult to realize why plans for new large-scale biomass power plants, as well as small-scale home and business conversions, are being cancelled.

Policy Backtracks

What renewable energy policies have the Tories changed since winning a majority? There are quite a few, but two in particular

are having the biggest impact on the future sustainability of the U.K.’s biomass sector. The first of these is the removal of the grandfathering policy for biomass. Under the guise of cutting bills for “hardworking British families” and citing the falling cost of renewables as meaning that subsidies are no longer needed, Rudd announced that the guaranteed level of subsidy for biomass projects was being removed completely. The reason given for this drastic decision is to prevent biomass generating capacity increasing. Today, there is 2.4 GW of capacity that can convert to biomass if subsidies are maintained, and DECC forecasts that this could increase further to 4.6 MW in 2020 to ’21. Cutting the subsidies in order to prevent this from happening will, they claim, avoid £500 million ($769 million) in costs up to then. The second policy change drastically affecting the industry is the summer budget 2015 announcement that the exemption for renewable source electricity from the Climate Change Levy would be removed. This means that levy exemption certificates (LECs), which renewable energy generators could previously sell under their power purchase agreements, no longer have any value. SmartestEnergy is the largest purchaser of independent energy in the U.K., with much of its supply chain working in renewables.CEO Robert Groves says that while the announcement was unexpected and disappointing, the company remains committed to independent generators and to supplying the U.K.’s leading companies with renewable electricity. “We are working through the detail required to transition our business away from LECs and have spoken to our customers,” he says. “As you would expect, there are still many questions unanswered, but we will move forward as quickly as possible.”

Frank Gordon, senior policy analyst of renewable power at the U.K. Renewable Energy Association, says these two major Conservative government policy changes have driven investment uncertainty. “The removal of LECs has had a substantial impact on the profitability of renewable power projects, including biomass power,” he says. “For example, a typical project might lose 5 percent of its total revenue as a result.”

Shrinking the Biomass Sector

With the aforementioned policy amendments undermining both progress already made and the profitability of future projects, the U.K.’s biomass sector is now facing a reversal of fortunes and expects to see a significant slowdown in growing its energy output, alongside many job losses. “The proposed restrictions on investment in renewable energy are already stalling the development of technologies like anaerobic digestion (AD), putting jobs and businesses in the supply chain at risk,” says Matthew Hindle, head of policy at the Anaerobic Digestion and Bioresources Association. These effects have already been seen at the Eggborough Power Station, a 2,000-MW, coal-fired power plant in North Yorkshire, England, planning to close in March 2016 rather than converting to biomass as once proposed. This means the loss of more than 200 jobs in a region already hard hit by the recession and ongoing austerity measures, which has seen unemployment figures continue to rise in 2015, as they fall in the rest of the country. Another energy generator in the same region, Drax, has six generating units at its power plant, two of which are fully running on biomass and the third predominantly on biomass. Paul Hodgson, head of media rela-

DECEMBER 2015 | BIOMASS MAGAZINE 23

well for Drax, the overall picture is not quite as rosy for the rest of the U.K.’s biomass sector and its renewable energy industry as a whole, which is now appearing as unattractive to investors. “Because the government removed grandfathering rights from certain biomass projects, serious questions have been raised, alongside wider concerns as to the security of investments in U.K. energy projects, as to whether retrospective changes will soon be made to existing projects,” says Gordon. “At this point, however, it only applies to biomass conversion projects.” FLASHBACK: Drax began its massive biomass conversion project in 2013, with support from the U.K. government.

Economic and Environmental Woes

PHOTO: TIM PORTZ, BIOMASS MAGAZINE

tions at Drax, says two are on the Renewables Obligation protected until 2027, and the recent decisions around the grandfathering policy didn’t affect the utility. “The third is also on the Renewables Obligation and awaiting state a aid decision for a contract for difference (CFD, a long-term contract enabling the generator to stabilize its revenues at a pre-agreed level, and we hope the outcome will be positive.”

Drax is a major good news factor in the U.K. government’s DUKES Digest of United Kingdom Energy Statistics report released in June, which revealed that energy generation from bioenergy sources was 25 percent higher in 2014 compared to 2013. This has mainly been attributed to the conversion of the second unit at Drax power station to dedicated biomass. Despite the fact that things are still going

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For a while, the outlook for the biomass sector was good. Output was up, jobs were being created, and progress was being made toward meeting 2020 environmental targets. “The U.K.’s AD sector has made enormous strides since 2010, opening our 400th plant this year and employing 4,500 people,cmany in manufacturing and the rural economy,” Hindle says. But, it’s looking increasingly likely that the good news years are over, at least for now, and the businesses working in the supply chain, as

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well as in the biomass energy generating game, are waiting with baited breath for the outcome of the Spending Review. At press time, it was soon to be announced. Frank Aaskov, policy analyst at REA, says the proposed changes to the feed-in tariff scheme will negatively affect the AD market, which depends on generator’s ability to conduct long-term planning. If generators can’t think long-term, investments are delayed, and all of the businesses within the supply chain face the prospect of falling profitability. A real question mark now hangs over the sustainability of many of them. “The delays to, and lack of auction date for, the CFD scheme will impact suppliers of biomass and technology for biomass combined-heat-and-power (CHP) plants, the projects supported by the scheme,” Aaskov adds. “A more detailed picture of how the fuel suppliers and manufactures will be affected will be possible when the Spending Review results are published.” As is often the case with government policy, all seems short-sighted. If the investments in the biomass sector were maintained, the envi-

ronmental and economic impacts could only be positive, many believe. “With the right political support and continuing research and development, AD alone could reduce the U.K.’s greenhouse gas emissions by 4 percent, and we could provide technology and expertise to export to the world,” Hindle says. “We hope that the government will recognize these benefits and give AD the clear backing it needs.” And anticipating coal plants converting to biomass, new technologies are being developed to help ease the transition and keep costs to a minimum. For example, U.K. company Antaco Ltd. says it creates a fuel that can be burned in existing coal power stations without the need to modify them. The process is called hydrothermal carbonization, and enables low-value organic waste to be turned into a high-value solid biocoal, according to the company, by using a combination of heat and pressure to transforms waste into a carbon-dense material. And even without the cutting-edge technologies such as Antaco’s, biomass on its own is an attractive and adequate replacement for coal, and has established a good track record. “Biomass has proven to be cost-effective, and a

BIOMASS to ENERGY ProcessBarron is there every step of the way.

high-value-for-money, low-carbon technology,” Gordon says. “It could help the government reach their targets at lowest cost, particularly as it could immediately reduce coal combustion rates and utilizes major existing infrastructure sites.” While the biomass sector is innovative, cost-effective, and has the potential to significantly cut the U.K.’s carbon emissions and grow its economy, the government is choosing to cut support, and it’s left many stakeholders wondering what lies ahead. “The U.K. government believes there is enough renewable power capacity under development to meet their 2020 renewable electricity targets,” Aaskov says. “This understanding, however, does not adequately consider that the underdelivery of heat and transport will require additional electricity supplies in order to meet the overall energy target (if one sector fails to meet its target, the others must take up the slack). By undermining continued investment in renewable electricity, the energy target will therefore be put at risk.” Author: Amanda Saint Biomass Magazine freelance writer amandasaintwriter@gmail.com

Visit us at Power-Gen booth #6216 processbarron.com/biomass 205-663-5330

BiogasNews

Biogas technology helps make brewery carbon neutral

Low Power Consumption Highest Energy Density Proven Reliability Low Maintenance

Lowest cost

firelogs and pucks

26 BIOMASS MAGAZINE | DECEMBER 2015

Biodiesel process and biogas technology provider BDI-BioEnergy International AG and Brau Union Ă–sterreich, part of the international Heineken family, celebrated the opening of a new spentgrain fermentation plant at the GĂśss Brewery in Austria, the last milestone in a series of efforts to make the facility 100 percent carbon neutral. Energy from the brewery’s residual materials will be used for steam generation and excess gas will be converted into renewable electricity. Edgar Ahn, BDI-BioEnergy executive board member; Furthermore, the digestate, a byproduct Marc Gross, Heineken chief supply chain officer; Liebl, Brau Union Osterreich CEO; Johann of the spent-grain fermentation plant, will Markus Seitinger, regional minister, and Walter Kreutzwiesner, be used as a high-quality fertilizer. district commissioner “With the construction of this indus- PHOTO: BDI-BIOENERGY trial spent-grain fermentation plant, we were able, due to the optimal integration of our biogas process, to supply a convincrequirement is met from waste heat dising solution to this environmental project, charged from the neighboring Mayr-Melnand thus to help Brau Union Ă–sterreich on hof sawmill. Ninety percent of the waste its way to a completely carbon-neutral plant,â€? heat generated in the brewing process is used said Edgar Ahn, member of the executive to heat water. A new type of boiling system board of BDI-BioEnergy International. is used during the brewing process, which The effort is part of Heineken’s sustain- helps save electricity and water. A solar plant ability initiative, “Brewing a Better World.â€? also helps to generate renewable energy. And Since 2003, GĂśss Brewery started to imple- now, thanks to the new spent-grain fermenment renewable energy in its processes. tation plant, no more fossil gas will be needEnergy supply is now 100 percent based ed at the complex. on renewable energy and carbon emissions “We are immensely proud that beer from fossil fuels will be zero. This has been production at GĂśss will in the future be accomplished with electricity from hydro- fully CO2-neutral, thanks to the beer grain power, biomass district heating, solar ther- fermentation plant,â€? said Brau Union Ă–stermal energy and renewable energy from the reich CEO Markus Liebl. “This makes it the newly built spent-grain fermentation plant first carbon-neutral, large-scale brewery in from BDI-BioEnergy International. the world.â€? Nearly 40 percent of the brewery’s heat

Foristar buys 2 landfill-gas-to-energy plants Fortistar recently announced that it acquired two landfill-gas-to-energy (LFGTE) projects totaling 11 MW. The acquisitions from Green Gas Americas follow the closing last week of $150 million in financing for Fortistar’s LFGTE portfolio. The two new projects are both operational. The 8-MW Pioneer Energy project, located in Birdsboro, Pennsylvania, sells power to Constellation Energy under a longterm offtake agreement. The 3-MW Port Charlotte Energy project, located in Punta Gorda, Florida, sells power to Orlando Utilities Commission under a long-term contract. Fortistar will own and operate both projects.

The $150 million in financing was led by Fortistar’s existing LFG lenders, MUFG Union Bank, Investec and CoBank. The group was expanded to include East West Bank and Raymond James Bank. In addition to extending the term of the debt, the financing provides reserves along with an accordion facility to facilitate growth through acquisitions, development and internal investment. According to the company, Fortistar now has 180 MW of capacity in its U.S. landfill gas portfolio.

BIOGAS¦

Biogas Integration for Cellulosic Ethanol Production BY AMANDA BILEK

As cellulosic ethanol production facilities have come online, anaerobic digesters have been colocated at the plants to recover biogas from soluble residues inherent in the ethanol production process. These soluble residues contain a source of energy that can be recovered using anaerobic digestion, and the captured biogas can help meet process energy needs. Recently in Iowa, DuPont held a grand opening for the world’s largest cellulosic ethanol facility. Once fully operational, the plant will produce 30 million gallons of cellulosic ethanol per year. The opening of the DuPont plant comes on the heels of Poet-DSM’s cellulosic ethanol facility opening in 2014. The Poet-DSM plant aims to produce 20 MMgy. The opening of these plants represents a tremendous milestone in our nation’s goal to produce domestic renewable fuel sources from nonfood feedstocks. These plants are also able to tout another major accomplishment—the production of cellulosic ethanol in a closedloop system. Both plants use a biomass boiler and anaerobic digestion technology to produce process energy from the wastewater and solid lignin of the ethanol production process. Each plant is able to meet its energy needs through the integration of biomass cofiring and anaerobic digestion of wastewater. Since the cellulosic ethanol plants are located near corn ethanol plants, excess process energy from the cellulosic plants can offset some of the fossil fuel use at these facilities. Abengoa’s cellulosic ethanol plant in Kansas also integrated anaerobic digestion into the cellulosic ethanol production process. The anaerobically treated wastewater at Abengoa’s facility is estimated to offset $750,000 per year in energy purchases. Using anaerobic digestion to help treat the wastewater in the ethanol production process also provides an opportunity for waste reuse, which helps improve the overall cellulosic ethanol production footprint.

Although there are numerous environmental benefits from the integration of anaerobic digestion into cellulosic ethanol production, the life-cycle energy balance and dramatic improvements in the carbon emission profile of the produced fuel can have a positive impact on the bottom line, too. This presents an opportunity for these companies to receive a price premium in markets such as California’s, which is putting pressure on fuel suppliers to drive down carbon emissions for fuel that is consumed in the state. A lower-carbon profile of cellulosic ethanol is a requirement under the renewable fuel standard (RFS), which requires cellulosic fuels to have a 60 percent greenhouse gas (GHG) reduction compared to gasoline. The commercialization of anaerobic digestion technology that can be integrated or colocated with other renewable fuel production facilities can assist those producers with reaching carbon profile requirements under the RFS. Aggressive cellulosic fuel volumes are required by law under the RFS, and it is a promising sign that the first cellulosic ethanol production facilities to come online have integrated anaerobic digestion, at some scale, into the production process. These technology advancements are also good for consumers, who can be assured that through rigorous life-cycle accounting, they are using a fuel that offers significant GHG emission savings compared to fossil fuels. As more cellulosic fuel production facilities come online, I hope we continue to see the integration of anaerobic digestion to help meet process energy needs. The technologies work well together and offer multiple benefits for the environment and society. Author: Amanda Bilek Government Affairs Manager, Great Plains Institute abilek@gpisd.net 612-278-7118

DECEMBER 2015 | BIOMASS MAGAZINE 27

¦BIOGAS DEPARTMENT

PHASES OF THE LAGOON: Rolls of 80-millimeter, high-density polyethylene are heat-welded together. The cover effectively turns the lagoon into a giant anaerobic reactor. In all, 88 lagoons at various Smithfield production sites will undergo the same conversion process.

Roeslein’s Perfect Fit

A biogas project in northwestern Missouri is leveraging the fortuitous colocation of hog production assets and a natural gas pipeline to speed the project toward commercial completion. BY TIM PORTZ

T

he Ruckman complex of Smithfield Foods Hog Division in Missouri is just one of nine different hog production sites that together make up the largest and most ambitious swine wasteutilizing biogas project ever undertaken. The site, just northwest of Albany, Missouri, features nearly 70 individual barns, and at any given time, holds nearly 60,000 hogs. Their waste flows into nine different lagoons, each 20 to 35 feet deep in the center and capable of holding nearly 15 million gallons of manure. Seven of the lagoons have already been covered in black, 80-mil-

28 BIOMASS MAGAZINE | DECEMBER 2015

limeter, high-density polyethylene (HDPE), and the final two lagoons were scheduled to be covered by press time. While impressive in size and scope, it is the infrastructure that runs just underneath the complex that project developer, builder, owner and operator Roeslein Alternative Energy is confident will make the difference in the project’s long-term viability. While it didn’t initially figure in to Roeslein’s development plans, the ANR natural gas pipeline running underneath the Ruckman complex has emerged as one of the projects most important assets.

“This was not our original concept,” Chris Roach, director at RAE, tells Biomass Magazine. Instead, RAE planned on cleaning the biogas, compressing it, moving it by truck and decompressing it. “After a lot of analysis, we decided that we didn’t want to do that,” Roach says. Not only was the original concept too energy intensive for RAE’s liking, introducing high amounts of truck traffic to the area’s rural roads wasn’t appealing. Instead, RAE went to work on connecting the farms by pipeline. “Our initial investigation had us installing over 100

BIOGASÂŚ

miles of pipe to connect all of the farms,� says Roach. “But once we got with some real installers and down to the real cost of the pipe system—what is needed to do it not only safely but cost-effectively—we essentially cut the cost of it in half. That was a big advancement in the development of the project concept.� This discovery, and the decision to utilize a pipeline to move produced biogas to market, came after some of the other sites had already gone through the lagoon-covering step that Ruckman is now finishing up. “Frankly, if we had to do it all over again, we’d have just done Ruckman and gotten it operational,� says Roach. The ANR pipeline, a portion of the larger TransCanada pipeline system, includes over 9,000 miles of pipe and connects natural gas supply basins throughout the Midwest, giving RAE the market access that its earlier compression and trucking solution simply couldn’t. Without this market access, RAE’s first offtake partner wouldn’t have been possible. Just over 1,000 miles east-southeast of Albany, a combined-cycle natural gas plant owned by Duke Energy sits alongside the Dan River. It is there that Duke Energy will burn a portion of RAE’s produced biogas in its turbines to comply with a North Carolina mandate to derive 0.2 percent of its retail power sales from swine waste. While the mandate was meant to incentivize renewable energy systems like the Ruckman facility in North Carolina, so far, biogas produced from hog waste is not available within the state. Landing Duke Energy as its first customer gave RAE something many other biogas developers struggle to find, a long-term offtake agreement. These stable, guaranteed revenues provide lenders with the certainty they need to loan developers the capital required to fully construct projects with costs sometimes approaching $100 million. Duke Energy’s needs will consume one-third of the project’s biogas, and RAE is working to identify other markets and customers. Roach indicates that RAE is looking at the market opportunity created by allowing renewable natural gas transportation fuels to

qualify as a renewable fuel, earning D3 renewable identification numbers (RINs). In addition, Roach says RAE is looking into California for opportunities created by that state’s Low Carbon Fuel Standard. “It’s important for us to make the most of the current market opportunities and also lock in some long-term contracts so we can keep our debt partners assured that we’ll be able to meet our debt service requirements moving forward,� he says. For now, RAE is more than happy to

Steam Boilers hot water

DIGESTER GAS NATURAL GAS METHANE BIO GAS OIL COAL SLUDGE BIOMASS SOLID WASTE

take a stepwise, incremental approach on the project, and the company plans to be ready to inject clean, pipeline-quality renewable biogas into the waiting ANR pipeline, just below Smithfield’s pigs’ feet, in the summer of 2016. Authors: Tim Portz Executive Editor, Biomass Magazine 701-738-4969 tportz@bbiinternational.com

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Join the Conversation

DECEMBER 2015 | BIOMASS MAGAZINE 29

AdvancedBiofuelsNews DuPont opens commercial-scale cellulosic ethanol plant In late October, DuPont celebrated the opening of its cellulosic biofuel facility in Nevada, Iowa, with a ceremony that included Iowa Gov. Terry Branstad and many other dignitaries. This biorefinery is the world’s largest cellulosic ethanol plant at 33MMgy, according to the company. The facility uses corn stover as feedstock. Vital to the supply chain and the entire operation of the Nevada biorefinery are close to 500 local farmers, who will provide the annual 375,000 dry tons of stover needed to produce this cellulosic ethanol from within a 30-mile radius of the facility. In addition to providing a new revenue stream for these growers, the operation will create 85 full-time jobs at the plant and more than 150 seasonal local jobs in Iowa. The majority of the fuel produced at the facility will be bound for California to fulfill the state’s Low Carbon Fuel Standard where the state has adopted a policy to reduce car-

PHOTO: DUPONT

bon intensity in transportation fuels. The plant also will serve as a commercial-scale demonstration of the cellulosic technology where investors from all over the world can see firsthand how to replicate this model in their home regions.

Advanced D5 RINs climb in September, D3, D6 RINs down slightly U.S. EPA data on renewable identification numbers (RINs) generation through September shows D3 cellulosic biofuels RINs generation tapered off slightly for the month of September, after a steady climb seen each month throughout the year. D6 renewable fuel RINs (primarily corn ethanol) were down slightly from the previous month, while advanced biofuel D5 RINs continue to climb. Biofuel producers assign RINs to each gallon-equivalent of fuel produced, which are then used by obligated parties to show the EPA that they have complied with the blending requirements under the renewable fuel standard. Cellulosic D3 RINS were down in September at 12.3 million, 1.5 million lower than August’s and the lowest since June’s 12.5 million D3 RINs generation. D3 RINs generation for 2015 through September, adjusted for corrections, totaled 87.95 million; of that 14.2 million were generated by importers. Broken down by type of fuel, D3 RINs generation for the first nine months included 1.65 million from cellulosic etha30 BIOMASS MAGAZINE | DECEMBER 2015

nol, 50.8 million from renewable CNG and 36.3 from renewable LNG. Advanced biofuel D5 RINs for September continued to climb, reaching 24.6 million, up from August’s 20.8 million. D5 RINs generation for the year through September totaled 90.4 million. Just over half, 45.9 million D5 RINs were generated by importers. By type of fuel, 64.6 million advanced biofuel D5 RINs were ethanol, 18.6 million naptha, 505,000 heating oil, 6.8 million non-ester renewable diesel and 5,000 CNG. Biomass-based diesel, D4 RINs totaled 161.4 million in September, down from July’s 192.8 million and August’s 185.7 million. D4 RINs for the year through September total 2.05 billion; 232.3 million were generated by importers and 180.1 million foreign generation. Biodiesel accounted for 1.65 billion D4 RINs, nonester renewable diesel accounted for 406.6 million, Cellulosic diesel D7 RINs generation was zero in September, as it has been for all but two months in 2015.

ADVANCED BIOFUELS AND CHEMICALS¦

2015: A Missed Opportunity for Biofuels BY MICHAEL MCADAMS

To say that 2015 was an overall disappointment for the biofuels industry would be an understatement. With the price of oil hovering from the high $30s to the mid$50s all year long, the environment was difficult for the entire industry. However, as I write this last column of the year, we need to look back and review what was accomplished and what challenges remain. This year was one for the record books. We saw record-low commodity prices. We saw the ousting of the House speaker speaker by a small fraction of Republican ideologues. We saw the passing of rare, bipartisan legislation, including extending our nation’s debt limit and budget. And, perhaps most important to the biofuels industry, we will see the U.S. EPA publish final renewable volume obligations (RVO) for 2014, 2015, and 2016. Finally! During the lead up to the RVO release, which has been an ongoing saga for three years, most folks anticipate a final rule that slightly raises the numbers for the renewable pool. However, I don’t expect the EPA to back off utilizing the general waiver authority to downwardly adjust the numbers for the renewable pool, citing concerns around the so-called blend-wall. Therefore, we are likely to see litigation from both the corn ethanol industry and Big Oil in the weeks and months to come. Yet again, this will leave advanced biofuels in suspended animation as collateral damage to the fight. However, there will be some good news for advanced biofuels, specifically biomass-based diesel and cellulosic categories. I expect favorable and supportive RVOs moving forward. I believe the industry has made a good case for the importance of consistency from EPA regarding advanced biofuels. This is based on past performance, particularly in the biomass-based diesel pool, which surpassed the 1.28 billion gallon target and will lead to a solid increase for 2015, 2016 and 2017. A great deal of this success will be a result of international renewable diesel and biodiesel providing volumes and lower prices for American consumers. So, in the end, the RVO story will finish OK for the advanced biofuels industry this year, and continue to provide for a massive debate between corn and oil about the amount of corn ethanol volume to be used moving

forward and over what period of time. The big question will be whether there is any stomach in Congress, which continually has shown a willingness to kick the can down the road on contentious issues, to wait for the resolution of their lawsuits or choose to step in legislatively. Odds are in favor of them punting until after the election. Nevertheless, we can expect at least a couple of hearings to occur during the spring, from either an oversight standpoint or to keep the issue alive for the stakeholders. On tax issues, with the new speaker and a new Ways and Means Committee chairman, expect any reform legislation to be delayed until after the election. As for the extenders package, one would hope that Congress will complete the renewal of all the biofuels tax provisions prior to adjournment in December. The odds still look good for a two-year extension of the existing provisions. Meanwhile on the regulatory front, EPA will finish the RVO numbers, and, hopefully, immediately proceed to clearing up a number of other items. This includes the use and granting of renewable identification numbers to intermediate feedstocks, which are not colocated with the facilities that manufacture either sugars or oil to be upgraded to renewable fuels. We also hope to see an expansion of the heating oil rule to incorporate cooling of buildings, as well as the continued efforts to complete new pathways and registrations that are awaiting final approvals. These efforts would make for a nice yearend, and help to focus the advanced biofuels industry on the work left to be done in 2016. While a challenging year, some very important things got done and other concerns are starting to see a light at the end of the tunnel. All of these issues are important, and we need to continue to weigh in and consistently express to our lawmakers what a difference they can make to the progress of our industry moving forward. Until next year, I hope I have given you some helpful insights, and I look forward to hearing from you and continuing our conversation in 2016. All the best. Author: Michael McAdams President, Advanced Biofuels Association mcadams@hklaw.com www.advancedbiofuelsassociation.com

DECEMBER 2015 | BIOMASS MAGAZINE 31

¦ADVANCED BIOFUELS AND CHEMICALS DEPARTMENT

OIL REFINERY SUNSET: The sun sets, figuratively speaking, on crude oil processing at Total S.A.’s 150,000-barrel-per-day refinery in La Mède, France, come the close of 2016, when the oil giant plans to retool the complex to produce renewable diesel. PHOTO: TOTAL S.A.

A Transformative Project: Total’s La Mède Conversion

Supermajor oil company Total S.A. will convert its 150,000-barrel-per-day oil refinery in La Mède, France, to produce renewable diesel—a first in France and just the second project of its kind in the world. BY RON KOTRBA

L

ast spring, one of the world’s largest oil companies, Total S.A., based in Paris with operations in 130 countries, announced plans to transform its oil refinery in La Mède, France, to manufacture 500,000 tons (approximately 170 MMgy) of hydrotreated vegetable oil (HVO), also known as renewable diesel. The La Mède oil refinery is in the South of France near Marseilles. The first unit was built in 1935, according to Philippe Billant, project director for Total and the head of the La Mède transformation. The cracking unit—the main conversion unit at the refinery—was installed in 1953. Capacity at La Mède today stands at roughly 150,000 barrels per day (nearly 2.3 billion gallons per year). For years, the asset has been losing money. “The refining environment in Europe is tough and competitive,” Billant says. “We have to see the La Mède project in that context.” European demand for petroleum products has declined 15 percent since 2008. “The European market is steadily contracting,” Total states, “a situation aggravated by the shale oil and gas revolution in the United States … 32 BIOMASS MAGAZINE | DECEMBER 2015

and competition from refineries in Asia and the Middle East. These two trends shut European refineries out of some of their domestic and export markets and have exacerbated excess refining capacity in Europe.” In April, when Total announced plans to invest in the two of its five French refineries losing money—Donges and La Mède—Patrick Pouyanné, CEO, said, “There are three possible responses to the crisis in the European refining industry. The first is to throw in the towel. The second is to do nothing and perish. The third is to innovate and adapt to meet shifting demand trends.” For La Mède, Billant says the location on France’s Mediterranean Coast is a highly competitive area. “Forty to 50 percent of France’s oil refining capacity is positioned in that very small area,” he says. “There’s excess capacity in the region compared to the demand for gasoline and heavy oils.” Billant says La Mède has lower competitive factors than the average refinery in Europe. “For instance, it has a low complexity factor due to the relatively low cracker capacity vs. the crude distiller,” he explains. “And despite investments over the years, the refinery has rela-

tive low energy efficiency and high costs.” For these reasons, Total decided to end crude oil processing at La Mède by the end of 2016. “The status quo at La Mède is just not possible for us,” Billant says, “so we had to do something to make the operation profitable. Closing the complex was just not possible. We had to find maximum use for the assets at La Mède, including our highly skilled personnel.” The transformation of the La Mède oil refinery to manufacture HVO is a first for France, but not for Europe. Italian oil company Eni S.p.A. blazed this trail in 2012 when it announced plans to convert its Porto Marghera refinery in Venice to produce 300,000 tons of renewable diesel using the Ecofining process it developed jointly with Honeywell’s UOP. Eni identified the opportunity to reuse the catalytic hydrodesulfurization section in the Venice refinery to produce HVO, initially using palm oil. The biorefinery began operations in 2014 with commissioning through 2015. While Eni invested €100 million ($108.2 million) and implemented Ecofining technology, Total is investing €200 million and will be employing French company Axens’ Vegan

ADVANCED BIOFUELS AND CHEMICALS¦ process. Axens pioneered the solid catalyst Esterfip-H process for fatty acid methyl ester (FAME) manufacturing. Its first commercial installation of the Esterfip-H process in 2006 was, coincidentally, also in the South of France, in Sète, for Diester Industrie. Last year, Diester Industrie and Saipol, a subsidiary of Avril Group, merged. This October, Saipol announced its investment of €28.5 million in additional biodiesel manufacturing capacity in Sète, adding 100,000 tons (approximately 30 MMgy) to its existing 180,000-ton facility, and a new biomass boiler. The additional biodiesel capacity in Sète is based on the Lurgi process, says Tom Doron, public relations manager for Avril Group. Interestingly, as Total points to saturation of crude oil refining in the South of France, Saipol is concerned with Total’s plans to convert the La Mède refinery to produce HVO about 100 miles away. Yves Delaine, chairman of Saipol, says, “Refocusing and upscaling the activities of this site will allow us to prepare for a future in which we believe, despite a growing number of competitors in the Mediterranean region who are making use of external agricultural resources. This constitutes a real threat, which is becoming a concern to both our site and farmers in the region.” Billant says La Mède will maximize processing of used cooking oil. “We will look for that within France and the EU,” he says, adding that if it makes economic sense, Total will also consider importing feedstock. The first phase of Total’s La Mède biorefinery conversion project is, as Billant puts it, “the informing and social process, during which we explain the project,” he says. “We’re now done with that phase and we’ve moved into the development and implementation phase. We will continue to operate La Mède as-is until the end of 2016. In the meantime, we will conduct detailed engineering studies so we’ll be ready to start construction in early 2017.” He anticipates construction to be finished mid-2017. Some of the €200 million will be spent on the retrofit of the hydrotreater. “We have to adapt the unit to process the renewable feedstock,” Billant says. The process of hydrogenating the oil to remove the oxygen generates a lot of heat. “Much more than when you process fossil oil, so we have to adapt the reactor to manage that,” he says. The conversion project also involves building a new pretreatment unit to purify the oil and remove contaminants before entering the catalyzed hydrotreater. “We also have to adapt the storage and logistics facilities,” Billant says. Total will also build a unit at La Mède to produce AdBlue, a compound to treat diesel NOx emissions, and an 8-MW solar farm,

built by Total affiliate SunPower, that will provide 50 percent of the site’s power needs. “In this project, we will stop the crude distiller and conversion unit,” Billant says. “We will keep the gasoil hydrotreater and reformer as well. That will produce the hydrogen needed for HVO production. We will also keep the naptha hydrotreater. And we will keep using most of, but not all, the existing storage.” Axens did not respond to requests to talk about this project and the Vegan process. Billant says Axens’ technology was chosen vs. other offerings in the market because Total’s assessment revealed that it was “best able to meet our expectations for the project.” An Oct. 21 press release from Axens stated, “Vegan technology fundamentally consists [of] hydroprocessing any kind/mixture of renewable lipids into ultra-clean iso-paraffins. The resulting high-quality mixture of bioparaffins exhibits a high cetane number, tunable cold-flow properties, contains virtually no sulfur or aromatic compounds and is easily blended into regular diesel or jet fuel.” France will be the target market for La Mède’s HVO production, given its growing demand for biodiesel and HVO, Billant says. Other EU nations are prospective markets as well. “In 2020, European demand [for HVO and similar advanced renewables] will increase to 10 percent of transportation fuels,” he says. Billant says HVO makes sense to meet rising French and EU demand for biofuels, since FAME blending in the EU is capped at 7 percent. In early 2015, France’s energy ministry upped the allowable concentration to 8 percent. There is no cap on HVO blending. “With the limitations of esters, biodiesel is not necessarily the only solution, as such, to meet growing demand,” Billant says. “That’s where HVO comes into the game.” Furthermore, Total notes that France’s Energy Transition Act sets a target of 15 percent biofuels in 2030, adding that Europe and France will need additional biofuel production to meet this goal. “France currently imports biodiesel (462,000 tons in 2013 and 576,000 tons in 2014), and more than 20 percent of the biodiesel produced domestically is made from non-French crops (2013 figures),” the company states. When asked what the most challenging aspect of this monumental project is, Billant asked, “The most challenging, or exciting? We’re moving from a situation where this site was losing money, so we’re doing this conversion to make it profitable. The challenge starts there. Let’s make it profitable.” Author: Ron Kotrba Senior Editor, Biomass Magazine 218-745-8347 rkotrba@bbiinternational.com

DECEMBER 2015 | BIOMASS MAGAZINE 33

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