July-August 2015 - Pellet Mill Magazine

July/August 2015

Efficiency

is Everything Automated Systems Replace Labor-Intensive Work at Pellet Plants Page 28

Plus: Policy Roundup

for Pellet Producers Page 14

AND:

Plant Maintenance Shutdown Protocol Page 22

www.biomassmagazine.com/pellets

Contents »

Pellet Mill Magazine

Advertiser Index

JULY/AUGUST 2015 | VOLUME 5 | ISSUE 4

2 4B Components 16 Agra Industries 24 Andritz Feed & Biofuel A/S 36 Astec, Inc. 20 BBI Project Development 13 Bliss Industries, Inc. 31 BRUKS Rockwood 12 CPM Global Biomass Group 10 EBM Manufacturing 25 Evergreen Engineering 26

FLAMEX Inc.

11 GreCon, Inc. 9 Industrial Bulk Lubricants (a Dansons Company)

PHOTO: CONFLUENCE ENERGY

FEATURES 14

Regulatory activities are underway to help serve pellet markets overseas and establish a mainstream presence for the fuel in the U.S.

By Katie Fletcher

17 Integrated Environmental Solutions 5 International Biomass Conference & Expo 2016 33 ProcessBarron

22

32 Timber Products Inspection/Biomass Energy Laboratories

19 Uzelac Industries

8 West Salem Machinery Co. 35

Wood Pellet Association of Canada

MAINTENANCE

Down 'n Out in Pelleting Mills

Scheduled maintenance helps plants streamline production and avoid unscheduled downtime.

By Ron Kotrba

27 Tramco, Inc.

21 Vecoplan LLC

PELLET POLICY

Capital Actions for Pellet Fuel

28

OPERATIONS

Packaged Efficiency

Hands-free pellet bagging and pallet stacking is the cornerstone to improving production efficiencies.

By Tim Portz

DEPARTMENTS 04 EDITOR’S NOTE Maximum Uptime

By Tim Portz

06 TESTING GROUNDS

EPA’s NSPS: Next Steps for Pellet Producers

By Chris Wiberg

07 PELLET PLATFORM

Design Challenge to Promote Top-Performing Pellet Stoves

By John Ackerly

ON THE COVER

AUTOMATION: Manually handling finished bags can become a bottleneck at pellet plants. Some producers-like Indeck Energy Wood Pellets of Ladysmith, Wisconsin-are deploying palletbuilding robots to overcome this challenge.

08 BUSINESS BRIEFS 10 NEWS 34 MARKETPLACE

PHOTO: TIM PORTZ, BBI INTERNATIONAL

JULY/AUGUST 2015 | PELLET MILL MAGAZINE 3

Editor’s Note » Editorial

Maximum Uptime This issue of Pellet Mill Magazine finds the North American pellet industry largely running their facilities wide open, laying in inventory in preparation for the 2015-‘16 heating season. For producers, now is the time to make hay. Our team discovered while working on this issue that producers clearly recognize the vital importance of plant maintenance and the tight correlation between plant efficiency and a robust maintenance regimen.

Tim Portz VICE PRESIDENT OF CONTENT & On the regulatory side, Associate EXECUTIVE EDITOR Editor Katie Fletcher covers an array of tportz@bbiinternational.com national and international policy debates impacting the industry in “Capital Actions for Pellet Fuel,” on page 14. Her roundup highlights at least a half dozen policy issues that producers will appreciate as opportunities in the industry continue to develop.

In “Down ‘n Out in Pelleting Mills,” on page 22, Senior Editor Ron Kotrba outlines the maintenance programs of three very diverse pellet producers, each approaching maintenance differently, but unified in their meticulous attention to both preventative and predictive maintenance. Charlie Daw, plant manager of the newly commissioned Zilkha Biomass facility in Selma, Alabama, shares how a plant just finding its stride approaches maintenance. Daw and team are using a preventative system while accruing the operational intelligence to begin building a more predictive program. Indeck Ladysmith’s Darren Winchester says his team believes increased throughput is the ultimate goal of robust maintenance. “There are a lot of ways to incrementally improve production efficiency without adding a mill,” he says.

Ray Budisavljevic assigned unit numbers to all the equipment to track hours, and developed a work-order system for maintenance, repair and replacement when he became vice president of operations at Confluence Energy about six months ago. “It’s important to know the life cycle of your parts,” Budisavljevic says.

For “Packaged Efficiency,” on page 28, I interviewed both pellet producers as well as OEM personnel about the efficiencies available in productpackaging lines. While bagging and palleting pellets was once labor-intensive and time-consuming, it is now completely automated, with robots replacing laborers. Producers, buoyed by strong sales the past two winters, whose plants are not yet fully automated, are engaging OEMs and making the necessary investments to bring their operations up to speed.

PRESIDENT & EDITOR IN CHIEF Tom Bryan tbryan@bbiinternational.com VICE PRESIDENT OF CONTENT & EXECUTIVE EDITOR Tim Portz tportz@bbiinternational.com SENIOR EDITOR Ron Kotrba rkotrba@bbiinternational.com CONTRIBUTING EDITOR Anna Simet asimet@bbiinternational.com NEWS EDITOR Erin Vogele evoegele@bbiinternational.com COPY EDITOR Jan Tellmann jtellmann@bbiinternational.com ASSOCIATE EDITOR Katie Fletcher kfletcher@bbiinternational.com

Art

ART DIRECTOR Jaci Satterlund jsatterlund@bbiinternational.com GRAPHIC DESIGNER Lindsey Noble lnoble@bbiinternational.com

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 ACCOUNT MANAGER Tami Pearson tpearson@bbiinternational.com CIRCULATION MANAGER Jessica Beaudry jbeaudry@bbiinternational.com MARKETING & TRAFFIC COORDINATOR Marla DeFoe mdefoe@bbiinternational.com Subscriptions to Pellet Mill Magazine are free of charge—distributed quarterly— to Biomass Magazine subscribers.To subscribe, visit www.BiomassMagazine. com or you can send your mailing address to Pellet Mill 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 866-746-8385 or service@bbiinternational.com. Advertising Pellet Mill Magazine provides a specific topic delivered to a highly targeted audience. We are committed to editorial excellence and highquality print production. To find out more about Pellet Mill Magazine advertising opportunities, please contact us at 866-746-8385 or service@bbiinternational. com. Letters to the Editor We welcome letters to the editor. Send to Pellet Mill Magazine Letters to the Editor, 308 2nd Ave. N., Suite 304, Grand Forks, ND 58203 or email to asimet@bbiinternational.com. Please include your name, address and phone number. Letters may be edited for clarity and/or space.

Please recycle this magazine and remove inserts or samples before recycling TM

4 PELLET MILL MAGAZINE | JULY/AUGUST 2015

COPYRIGHT © 2015 by BBI International

« Testing Grounds

EPA’s NSPS: Next Steps for Pellet Producers

BY CHRIS WIBERG

On May 15, the U.S. EPA’s New Source Performance Standards for new residential wood heaters went into effect.

This is just over four years after the pellet fuels industry was put on notice (March 2011) that the 1988 NSPS would be updated to include pellet-burning appliances. Though the regulation itself is no surprise, we have all long anticipated what the regulation might say, and have tried to prepare ourselves for the requirements that would be published. In many cases, we anticipated correctly, but we also had several surprises when reading the final wording of the rule. There were also ambiguities.

In several instances, EPA provided language indicating regulatory requirements, but did not provide clear enough language for the industry to know how to comply. Efforts are currently underway by the Pellet Fuels Institute and others to work with EPA to clarify several points, but it is uncertain how long this process will take. Until then, we are all relegated to implement the requirements of the NSPS rule to the best of our understanding, so here is what we know.

The rule regulates emissions of new residential wood pellet-burning appliances of all types. This includes pellet stoves, fireplace inserts and central heating systems. It is important to note that this regulation is for all “new” appliances that are used for residential heating and does not apply to appliances manufactured prior to May 15, or to these same appliances used in nonresidential applications such as garages, commercial buildings, greenhouses and chicken barns. Noncompliant appliances manufactured prior to May 15 can still be sold until the end of the year to clear old inventory, but after May 15 all newly manufactured appliances must comply with the NSPS requirements.

EPA’s NSPS rule specifies that all new residential wood heaters must be tested to verify that emissions are below the limits specified in the NSPS and that emissions testing must be conducted using the fuel that will be authorized for use within the appliance. EPA has stipulated that the fuel approved for use will consist of pellet fuel produced under a licensing agreement with an approved third-party organization. There are three approved programs: the PFI Standards Program, ENplus and CANplus. Once testing is complete, EPA requires that, in the owner’s manual, the appliance manufacturer specify which fuels are approved for use, and state that the appliance warranty

6 PELLET MILL MAGAZINE | JULY/AUGUST 2015

will be void if the user of the appliance burns fuel other than the fuel specified in the manual.

In addition to the requirement for fuel to be produced under a licensing agreement with an approved third-party organization, EPA has also set minimum requirements for pellet fuel including limits for ash, fines, trace metals and other parameters. This has become a significant issue of debate, because EPA does not have statutory authority under the Clean Air Act to regulate pellet fuel, and including specific fuel requirements within the NSPS appears to be regulation of the fuel itself. In some instances, the fuel requirements provided appear reasonable. In other cases, however, the limits are in conflict with the grade requirements specified by the PFI, ENplus and CANplus programs. It is also a concern that once specified in the NSPS, these fuel requirements cannot be changed without additional rulemaking, which could restrict future innovation.

An example would be that, in the future, innovative appliance manufacturers could find ways to utilize higher-ash materials and still meet the required NSPS emission limits, but not if the NSPS specifies that pellet fuel cannot contain more than 2 percent ash.

The PFI has challenged EPA’s authority to set minimum requirements for pellet fuel by filing a petition for review in the District of Columbia Circuit Court. Filing the petition was a necessary step to assure that the pellet fuels industry has a voice in these matters, and that EPA does not overstep its authority.

Concurrently, PFI will continue to seek to work constructively with EPA to clarify ambiguous language so that pellet fuel producers can better understand what is required under the NSPS. While it is uncertain as to how long it will take to iron out all of the issues with EPA’s NSPS, the rule as currently written is now in effect, and all entities affected must comply. For this reason, it is essential that pellet fuel producers continue to implement the approved programs (PFI Standards Program, ENplus or CANplus) so that approved fuel will be available this next heating season for consumers who purchase new appliances.

Author: Chris Wiberg Manager, Biomass Energy Laboratory 218-428-3583 cwiberg@tpinspection.com

Pellet Platform Âť

Design Challenge to Promote Top-Performing Pellet Stoves

BY JOHN ACKERLY

A yearlong project to test and assess the most popular pellet stoves in North America to help consumers identify the most efficient stoves and how best to operate them entered its first phase this summer.

The initiative is being led by the Alliance for Green Heat with a wide group of partner organizations and stove experts. Pellet stoves are becoming increasingly popular in North America and Europe, are far cleaner than wood stoves and have enormous potential to replace fossil heating fuel.

The second phase of the project will feature an international stove technology competition to spotlight innovative and high-performing pellet stoves and prototypes. The project will culminate in an international gathering at Brookhaven National Laboratory in New York, where pellet stoves will be tested and the top devices awarded for their performance. The focus will not only be on low emissions and high efficiency in a test-lab setting, but also in the hands of consumers. The application to submit pellet stoves and stove prototypes for the competition will be available later this summer, with the actual competition and workshop scheduled for the week of April 4.

This pellet stove challenge marks the third stove design challenge, and the second to take place at Brookhaven. Previous challenges, including the inaugural 2013 wood stove design challenge on the National Mall in Washington, D.C., focused on promoting technological innovations that would help ensure wood stoves burn cleaner in the hands of consumers. All the stove design challenges involve stakeholder engagement in testing and assessing stoves, the opportunity to see and understand how testing works, and workshops and roundtables that bring together industry, regulators, air quality groups, nonprofits and the media.

Testing Popular Pellet Stoves There are approximately 1 million pellet stoves in North America. Unlike the wood stove market, which has many manufacturers, most pellet stoves are made by just a handful of companies. The alliance will independently test some of the most popular models made in North America and Europe for emissions and efficiency. The first round of tests will follow U.S. EPA lab testing protocols, while the second round will approximate how some consumers might use the stoves to better understand the range in efficiency when stoves are burned clean as well as dirty. We will also test the stoves for noise level and ease of cleaning and repair. We may also test heat output and efficiency differences using high- and low-quality pellets.

Prior to both rounds of testing, the alliance will explain what test methods and procedures are to be used and seek input from stakeholders. Testing will begin in an EPA-accredited test lab and then move to Brookhaven National Lab. The project is expected to produce some data about the variability and reproducibility of emissions and efficiency in pellet-stove testing.

In an effort to get better baseline data on some popular stoves, the Alliance for Green Heat submitted a Freedom of Information Act request to the EPA asking for emission and efficiency data for each of the four tested burn rates. The alliance also asked for moisture and ash content of the pellets used in the certification tests.

Author: John Ackerly President, Alliance for Green Heat jackerly@forgreenheat.org www.forgreenheat.org

JULY/AUGUST 2015 | PELLET MILL MAGAZINE 7

Business Briefs

PEOPLE, PRODUCTS & PARTNERSHIPS

Terex acquires CBI Terex Materials Processing, a business segment of Terex Corp., and Continental Biomass Industries Inc. have announced the acquisition of the assets of CBI by Terex, marking an expansion of the Terex Environmental Equipment product line. TEE, part of Terex Materials Processing, has been serving the wood, biomass and recycling industries since 2011. The acquisition of CBI’s business, in operation since 1988, significantly advances the product line while adding dimensions to the TEE business that would otherwise have taken years to develop. The acquisition also adds customization and specialty product capabilities that enable TEE to serve even the most demanding requirements of customers worldwide.

Denham Capital, Thesis Energy announce partnership Denham Capital and Thesis Energy have announced a partnership to pursue opportunities in European power generation.

The new platform, called Thesis Energy, will acquire and actively manage large-scale gas, coal and biomass-fired power generation and cogeneration assets across Western Europe.

Michael Best adds partner Michael Best & Friedrich LLP has announced Eric J. Callisto, former chairperson of the Public Service Commission of Wisconsin, has joined the firm’s Madison, Callisto Wisconsin, office as a partner on the firm’s Energy and Environmental teams. Callisto has extensive experience with state, regional and national energy, and utility issues, and will assist clients in these areas as well as with environmental law matters.

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Rodman & Rodman appoints manager Newton, Massachusetts-based CPA firm Rodman & Rodman P.C. has named Kevin Michaelan, a certified public accountant, as tax manager. Michaelan will also serve as a member of the firm’s Green Team, a specialty practice serving renewable energy clients. In his new role at Rodman & Rodman, Michaelan serves the owners and managers of established, privately held companies in a variety of industries, as well as entrepreneurs of Michaelan technology start-ups.

His experience includes business combinations, compensation and benefits, international tax, and multistate tax planning and compliance.

New ISO standard for biofuels approved The American Society of Agricultural and Biological Engineers announced that the international community has approved a new ISO standard for determining the composition of solid biofuels. ISO 16967:2015(E), Solid biofuels—Determination of major elements—Al, Ca, Fe, Mg, P, K, Si, Na and Ti, describes methods for ascertaining the major chemical elements of solid biofuels: aluminum, calcium, iron, magnesium, potassium, phosphorus, silicon, sodium and titanium. Determination of other elements, such as barium and manganese, are also possible with the methods described.

Scottish companies announce partnership In Scotland, Cochran Ltd., a supplier of industrial steam and hot-water boiler plants, and Scot Heat & Power Ltd., an independent supplier of biomass-fuel stock, including wood chips and pellets, have signed an agreement to cooperate in the development of industrial biomass projects.

ACT biomass boilers earn certification Advanced Climate Technologies has received the Intertek/ETL listing. The New York State Energy Research and Development Authority is a partner organization that supported the effort to gain the important safety accreditation. With the Intertek/ETL listing, ACT Bioenergy boilers now carry the following accreditations: Inertek/ETL listed and labeled; conforms to UL 2523; certified to CSA B366.1; certificate of compliance for the U.S. EPA 2015 particulate matter emission standards; approved by NYSERDA/RHNY. Vecoplan adds team member Michael Wilhoit has rejoined Vecoplan LLC as a project engineer. Wilhoit’s new position includes coordinating the Wilhoit design and development of turnkey shredding systems. In order to ensure continuous quality control, he will also oversee the manufacture and implementation of his projects once the engineering phase has been completed. Prior to rejoining Vecoplan, Wilhoit was managing partner at AREco Industrial Services.

ETI selects E4tech to lead consortium The Energy Technologies Institute has selected E4tech to lead a consortium that will deliver the latest project in its bioenergy program, a techno-economic assessment of biomass preprocessing. The 11-month project will provide an assessment of the economic and performance trade-offs associated with preprocessing options and the value they provide compared with more conventional technology improvement approaches. Preprocessing technologies assessed will include drying, blending, chipping, pelleting, torrefaction and pyrolysis, amongst others.

Kingdom Biofuels launches storage bin product Lancaster, Pennsylvania-based Kingdom Biofuels has announced its DIY Pellet Storage Bin, the first in a line of products to be unveiled this year. The bins can be assembled in about 30 minutes. The product comes with a pellet fuel fill kit that allows pipes to be installed so pellets can be blown

by Kingdom BioFuel directly into the pellet bin from outside the house just like one would delivery fuel oil through a pipe to the outdoors.

NYSERDA funds pellet projects In May, the New York State Energy Research and Development Authority announced support for two pellet projects.

One project, located in Stockholm, will convert the town garage heating system from oil to high-efficiency, low-emission wood pellets. Under the second project, the Northern Forest Center will work with communities across the North Country to promote conversions to wood pellets.

Coalition launches campaign in support of biomass A leading coalition of forest owners, wood suppliers and manufacturers of pulp and paper goods have announced the creation of Biomass101.org, a clearinghouse for scientifically sound information on carbon-neutral bioenergy. Biomass101 is an effort jointly produced by the American Forest & Paper Association, American Wood Council, Forest Resources Association and National Alliance of Forest Owners.

SHARE YOUR INDUSTRY NEWS: To be included in the Business Briefs, send information (including photos and logos, if available) to Business Briefs, Pellet Mill Magazine, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. You may also email information to evoegele@bbiinternational.com. Please include your name and telephone number in all correspondence.

JULY/AUGUST 2015 | PELLET MILL MAGAZINE 9

Pellet News 1 billion tons of biomass has the potential to produce

EIA announces plans to collect, publish pellet data

1.5 million jobs 92 billion kWh of electricity 60 billion gallons of biofuels 50 billion pounds of biobased chemicals and bioproducts Emissions reductions of 500 million tons per year

DOE previews 2016 Billion-Ton Study update A recent U.S. Department of Energy webinar, titled “A Changing Market for Biofuels and Bioproducts,� included a preview of the 2016 U.S. Billion-Ton Study update, which is currently scheduled for release in June 2016. The event was presented

by DOE’s Bioenergy Technologies Office.

The DOE’s first version of the Billion-Ton Study was released in 2005 and aimed to determine how much biomass might be available in the U.S. in the future. It also addressed changes in resources and what the drivers of those changes might be. During the webinar, Bryce Stokes of CNJV explained that the initial update, published in 2011,

added additional elements to the analysis, including certain metrics related to cost, supply and biomass location. The next update, scheduled for release next year, will expand to address issues related to sustainability, quality, costs and raw material losses. It will also address algae.

The updated report is expected to feature a new forestry model that looks at land use change and some of the implications associated with demand of raw materials for housing, pulp and paper, and other wood uses. Laurence Eaton of Oak Ridge National Laboratory said the 2016 update would also look at an extended time line, through 2040.

In June, the U.S. Department of Energy announced plans to conduct regular surveys of U.S. pellet producers. Data gathered through the surveys will be published by the U.S. Energy Information Administration.

The DOE recently issued a request to the Office of Management and Budget for a threeyear clearance of a new data-collection survey on densified biomass fuel on Form EIA-63C, Densified Biomass Fuels Report. Data collected on Form EIA-63C would be used to estimate densified biomass fuel consumption in the U.S., along with production, sales, and inventory at state, regional and national levels. According to the DOE, data gathered through the form will be published on the EIA website and in various EIA publications, including the Monthly Energy Review. Producers that have 10,000 tons or more of capacity are those targeted by the effort.

The survey is expected to include data on production capacity, the amount produced in the past year, and the types of pellets produced.

Approximately 200 densified-biomass producers are expected to respond to the initial survey, with 150 respondents expected to file regular reports.

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Pellet News »

Rural Energy launches AIRMatic

Enviva begins trading on NYSE

U.K.-based Rural Energy has that warehousing space is at a prelaunched the AIRMatic biomass mium, but with the AIRMatic only space heater, a new compact solu- a couple of spare square meters are tion that is ideal for warehouses needed to make the switch to bioand large industrial units. Accord- mass.” ing to Rural Energy, the standalone, modular biomass unit has been developed specifically to heat largevolume spaces.

It is powered by a boiler from Austrian manufacturer Herz and has minimal installation requirements. The AIRMatic can be mounted in nearly any location with a single-phase 230 V electrical supply, space for flue penetration, a water supply and a level floor. In addition, the system is fully compliant with the Renewable Heat Incentive.

“The AIRMatic addresses a real gap in the current biomass market and provides warehouse owners and managers with an easy, off-theshelf solution that will pay dividends,” said Paul Clark, HEATING UP INNOVATION: Rural Energy’s biomass space heater is a compact solution managing director of Rural AIRMatic designed to heat large industrial spaces.

Energy. “We are well aware PHOTO: RURAL ENERGY

In late April, Enviva Partners LP launched trading of its common units on the New York Stock Exchange under the ticker symbol EVA. The initial public offering (IPO) of 10 million common units representing limited partner interests was priced at $20 per common unit. Enviva first filed a registration statement with the U.S. Securities and Exchange Commission for a proposed IPO in October.

An updated prospectus filed with the SEC on April 20 explains Enviva Partners currently owns and operates five pellet production plants in the U.S. with a combined production capacity of approximately 1.74 million metric tons per year, along with a dry-bulk, deep-water marine terminal at the Port of Chesapeake. The pellet plants owned by Enviva Partners include facilities in Amory, Mississippi; Wiggins, Mississippi; Ahoskie, North Carolina; Northampton, North Carolina; and Cottondale, Florida.

A separate pellet plant located in Southampton, Virginia, owned by the joint venture Enviva Wilmington Holdings LLC, is not covered by the IPO. The joint venture has also commenced construction of a pellet plant in Sampson County, North Carolina, and a terminal at the Port of Wilmington, North Carolina. Two additional pellet plants are planned for the region, along with a pellet plant and port proposed for development in Mississippi. The publically traded Enviva Partners will be granted right of first offer to acquire these facilities.

« Pellet News

U.K. Job Growth

Biomass boilers Biomass CHP Biomass dedicated power Production of biomass, including wood for fuel

2012-'13 2013-'14 % Change 4,510 2,180 3,320 8,960

5,379 2,389 3,830 9,913

19.3 9.6 15.4 10.6

SOURCE: U.K. RENEWABLE ENERGY ASSOCIATION

REA reports increase in UK bioenergy jobs The U.K.-based Renewable Energy Association recently announced employment in the country’s renewable energy sector grew by 9 percent in 2013‘14, reaching 112,026 workers.

Biomass heating was the highest performing renewable energy sector during the year, with employment increasing 19 percent across the U.K. Employment for biomass boilers increased by 19.3 percent, from 4,510 in 2012-‘13 to 5,379 in 2013-‘14, while biomass combined-heat-and-power employ-

ment increased 9.6 percent, reaching 2,289, up from 2,180. Employment in dedicated biomass power increased 15.4 percent, from 3,320 to 3,830. In addition, employment in the energy-fromwaste sector was up 8.6 percent, from 6,545 to 7,109, while employment in the production of biomass, including wood for fuel, increased by 10.6 percent, from 8,960 to 9,913. Growth was also reported in the biofuel industry, with a 9.1 percent increase, from 3,509 to 3,829.

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Waste-derived pellet project planned in Nova Scotia Sustane Technologies Inc. has announced it is developing a facility in Chester, Nova Scotia, that will produce waste-derived biomass pellets. The Canadian government is providing the project a $500,000 repayable contribution through the Atlantic Canada Opportunities Agency’s Business Development Program. Sustane Technologies will use the funding to acquire special equipment for the development of the plant.

Peter Vinall, CEO of Sustane Technologies, said that the proposed pellet plant will feature his company’s proprietary technology, which separates biogenic material—or biomass—from municipal solid waste streams. He describes the company’s process as third-generation recycling, noting the material is shredded and cooked using a continuous autoclave and then fed through a series of proprietary thermos-mechanical technologies to purify product streams, including a biomass stream and a plastic stream. While the biomass stream is processed into pellets, plastics included in the feedstock are converted to a liquid fuel via a pyrolysis process.

Pellet News »

US pellet exports reach new high

SAILING TOWARD SUCCESS: The first vessel to use Drax Biomass’s Baton Rouge port facilities departed the port in early April destined for the Port of Tyne in the U.K. PHOTO: DRAX BIOMASS

Drax ships pellets from Port of Baton Rouge In April, the first vessel sailed from Drax Biomass’s Baton Rouge port facilities in Louisiana destined for the U.K.based Port of Tyne. The MV TBC Princess was loaded with pellets from Drax Biomass’s southern pellet mills.

Drax Biomass spent approximately 15 months building the port facilities to handle and ship pellets from the company’s two 450,000-metric-ton-per-year plants; Amite BioEnergy in Gloster,

Mississippi, and Morehouse BioEnergy in Morehouse Parish, Louisiana, as well as pellets from third-party suppliers.

Peter Madden, president and CEO of Drax Biomass, said the two pellet plants and the port facilities are currently undergoing commissioning. The pellet plants are expected to reach nameplate capacity this year. Once the two pellet plants are operating at capacity, Madden estimates their combined pellet output will meet approximately 15 percent of the power generation needs at Drax’s U.K. power plant.

Wood Resources International LLC has reported exportation of wood pellets from North America to Europe and Asia reached an all-time high in 2014, increasing 22 percent when compared to 2013.

Shipments from the U.S. were up 40 percent, while Canadian exports were down 6 percent.

According to Wood Resources International, U.S. exports to Europe increased for the 12th consecutive quarter, reaching a new high of more than 1.1 million tons during the fourth quarter of last year. Volumes of pellets to Asia shipped by container from the U.S. West Coast, however, dropped as manufacturers concentrated on seasonal local demand.

During the fourth quarter, 73 percent of U.S. pellet exports were destined for the U.K., up from 55 percent in 2013 and 31 percent in 2012.

BIOMASS PROCESSING with BLISS. Bliss Industries, LLC is a leading manufacturer of wood and biomass pelleting equipment for residential, commercial and industrial pellet fuel.

Bliss also manufactures an extensive line of hammermills for biomass size reduction and processing.

Impacting Industries Worldwide.

Proudly Manufactured in the USA

Bliss Industries, LLC P.O. Box 910 • Ponca City, Oklahoma U.S.A. 74602 Phone (580) 765-7787 • Fax (580) 762-0111 Internet: http://www.bliss-industries.com E-mail: sales@bliss-industries.com JULY/AUGUST 2015 | PELLET MILL MAGAZINE 13

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Capital Actions for Pellet Fuel Several regulatory schemes in the U.S. should perk up pellet producers' ears. Hear from industry leaders why.

BY KATIE FLETCHER

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T

he uptick of pellet production has spurred discussion in the U.S. and abroad of the strategies needed to piece together a sustainable position for pellet fuel in both the power and thermal marketplaces. Industry leaders say U.S. producers may find an assortment of policy areas and regulatory schemes laden with positive potential for the pellet sector.

Some standouts include developments abroad, such as the U.K.’s Department of Energy and Climate Change Contract for Difference (CfD) subsidy program and the Sustainable Biomass Partnership, as well as developments on U.S. producers’ soil, such as the upcoming release of the U.S. EPA’s

Clean Power Plan, the development of its associated accounting framework for biogenic carbon emissions and the EPA’s new source performance standards (NSPS) for residential wood heaters. Others include the U.S. Energy Information Administration’s densified biomass fuel survey and a number of pieces of legislation circulating through Congress, namely the Biomass Thermal Utilization Act or BTU Act. Industry advocates promote these capital activities and others in an effort to make pellet fuel more mainstream.

Pellet Potential Awaits

The U.S. EPA’s final ruling for the Clean Power Plan under section 111(d) of the Clean

Air Act is scheduled for release in August.

The plan was first proposed in June 2014 to reduce carbon emissions by 30 percent based on 2005 levels from existing, new, modified and reconstructed power plants. The CPP will set forth a calculation of emission-rate targets and give direction for states to implement plans to meet those targets. “This is a key component of the plan because every state has different energy portfolios and energy needs,” says Cody Kamrowski, policy and governmental affairs fellow with the Biomass Thermal Energy Council.

States will need to entertain all of the options they can to comply, and using biomass for compliance has many advantages, says

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« PELLET POLICY

Mike Jostrom, director of renewable resources with Plum Creek Timber Co. Inc. “For example, the opportunity to cofire pellets with coal-fired power plants could provide them with a great, shortterm opportunity to meet their obligation with low capital costs and without sacrificing reliability,” Jostrom says. “It will be important for stakeholders to work with states on how this can be done, assuring sustainability without creating barriers.”

Seth Ginther, executive director of the U.S. Industrial Pellet Association, agrees that as the CPP moves forward, there could be opportunities for some U.S. utilities to cofire pellets in existing coal infrastructure, which “would help those utilities preserve investment in their supply chains as well as preserve jobs.”

In November, EPA acting assistant administrator of the Office of Air and Radiation Janet McCabe prepared a memorandum with guidance on how to include biomass in state carbon-reduction plans proposed by the CPP and Prevention of Significant Deterioration Program. Issued the same day was a revised version of the Accounting Framework for Biogenic CO2 Emissions from Stationary Sources. This framework is the result of ongoing research by the Scientific Advisory Board, which was tasked by the EPA to determine the biogenic CO2 emission and climate-policy benefits of biomass. The framework has the potential to apply to any stationary sources combusting biomass, which could have implications for power plants, industrial facilities and the heating sector. “With their biogenic carbon framework, the EPA is trying to establish the scientific foundation that supports what they have known all along—that you don't really need to count the carbon dioxide emitted from biomass because it is not being removed from permanent geologic storage, like a fossil fuel is,” Jostrom says.

“This, of course, assumes that you are not depleting your biological carbon stocks, like forests, in the process. If the EPA gets it right and does not burden the process with too much complexity, it could provide some policy certainty that we haven't had for a long time.”

The SAB’s final advice to the EPA has no conclusive time line, and with a series of conference calls scheduled this summer, its findings will not be surmised by the CPP’s release. According to the Biomass Power Association, this could undermine the intentions of the EPA and the administration to ensure the role of biomass in reducing carbon emissions.

Even after the final framework’s release, it’s uncertain what policy weight it will carry. EPA may undertake some rulemaking efforts to include it in Clean Air Act regulations, but Emily McGlynn, manager for business development and policy for The Earth Partners, says it seems more likely that it will simply be used as an analytical tool that informs policy. “The decision around how to calculate net greenhouse gas emissions from biomass will be a major driver of how wood pellets are valued in the United States, as policies like the Clean Power Plan and other carbon-pricing schemes come online,” McGlynn says. “Being able to demonstrate lower net emissions should become a business strategy for anyone looking to gain more dollar value per ton of pellets.”

Wood Heater Happenings

16 PELLET MILL MAGAZINE | JULY/AUGUST 2015

EPA’s NSPS for residential wood heaters, governed under the Clean Air Act, was finalized in February, setting the first-ever

PELLET POLICY »

federal standards for outdoor and indoor wood-fired hydronic heaters, forced-air furnaces, pellet stoves and the previously unregulated single-burn-rate stove. “Beyond regulating the amount of particulates each model of stove or boiler can emit, it deals with a dizzying array of other issues, from what needs to be in owner’s manuals to how appliances are tested and what kind of fuel can be used in wood and pellet stoves,” says John Ackerly, president of the Alliance for Green Heat.

Jennifer Hedrick, PFI’s executive director, says that while the association agrees with the intent of the NSPS rule and shares EPA’s goals of reducing emissions, they disagree with several components of the rule as they relate to pellet-fuel requirements.

Though the EPA has attested they are not creating standards for pellet fuel, the PFI believes that is exactly what is occurring when the EPA outlines minimum requirements for pellet fuel in its NSPS. “We do not believe that the EPA has authority under the Clean Air Act, which governs the NSPS Rule, to set standards for pellet fuel.”

According to Ackerly, the regulation of the fuel—not the stoves—is one of the most controversial areas of the NSPS standards. “The NSPS says that pellet stoves must be tested with a pellet that is certified by either PFI, ENplus or CANplus,” Ackerly says. “Moreover, it says that pellets must be made of pure wood and cannot contain things such as construction and demolition debris, treated wood, plywood, plastic, manure, newspaper, cardboard, etc.”

Ackerly adds that by regulating pellet fuel, the EPA could take an enforcement action against pellet producers who use some of the banned ingredients. “A number of pellet producers use demolition debris and pallets, and these producers may see their business model upended,” he says.

Hedrick believes the minimum requirements for pellet fuel EPA is setting are problematic because several of the requirements are not in line with the best practices known to the industry. She gives several examples as the basis for this statement. For instance, in their ruling, EPA set a maximum pellet length of 1.5 inches with no regard for practical limitations. “We believe no more than 1 percent of pellet fuel should exceed 1.5 inches to ensure proper performance of the appliance, while also allowing for reasonable manufacturing limitations.”

In its minimum requirements, EPA specified that trace metals may not exceed 100 milligrams (mg) per kilogram (kg), but Hedrick says EPA does not define trace metals, nor state if it means that the combined total or individual amounts of these metals may not exceed the 100-mg-per-kg requirement. EPA’s 2 percent ash content limitation creates a third area of concern for PFI. “While the cap on ash will not cause concern for most if not all of the manufacturers of pellet fuel, it discourages innovation by pellet fuel and appliance manufacturers who could otherwise develop cleanburning appliances utilizing higher-ash pellet fuel,” Hedrick says.

PFI also believes EPA incorrectly classifies fines as inorganic rather than organic, and the agency does not provide an actual definition for fines. “This is significant as the PFI and ENplus standards have different definitions for what constitutes fines—PFI uses a one-eighth-inch-square-hole screen and ENplus uses a 3.15 mm-round-hole screen,” Hedrick says. “This is ultimately about a 30 percent difference in aperture size.”

JULY/AUGUST 2015 | PELLET MILL MAGAZINE 17

« PELLET POLICY

Without some sort of assurance of a resolution to these concerns and others, PFI leadership determined a more formal challenge of the rule was necessary. PFI filed a petition for review with the District of Columbia Circuit Court on May 15. Hedrick clarifies that they do not oppose EPA’s inclusion of graded-fuel programs within the NSPS rule, but decided to take action because they object to the agency creating its own pellet fuel standards (e.g. minimum requirements for pellet fuel). “The leadership of PFI has given significant consideration to this course of action and believes it is the best path toward assurance that fuel manufacturers can continue their operations without unreasonable burden from EPA,” Hedrick says. “Concurrently, we will continue to work with EPA to attempt to address issues within the rule outside of the legal process.”

Congressional Callings

The BTU Act has been one of BTEC’s policy priorities for the past five years, packaging a 30 percent residential renewable energy tax credit with a 30 percent business investment tax credit (ITC) for commercial and industrial high-efficiency, biomassthermal technologies. “The BTU Act adds high-efficiency, biomass-thermal technologies to the list of renewable energy technologies that currently benefit from the investment tax credits under section 25D—residential—and section 48—commercial/industrial—of the tax code,” Kamrowski says. “These tax credits will establish parity with other renewable technologies that have enjoyed substantial tax credits over many years, thus reducing market distortion and, in effect, increasing the return on investment (ROI) and financial viability of biomass technology.”

Equivalent treatment in the tax code should have been added back in 2005 when the Energy Policy Act codified all other renewable energy tax credits into section 48, says Charlie Niebling, partner of Innovative Natural Resource Solutions LLC. These credits are up for reauthorization in December and expire at the end of 2016. “If they are renewed, and there is going to be tremendous pressure to renew them, this 114th Congress has to act,” Niebling says.

The tax credits have proven valuable in other renewable energy sectors in helping

consumers overcome high-investment costs, Niebling says. “It is creating a strong market pull, and if you have a strong market pull for pellets, manufacturers are going to step up to the plate and invest in capacity,” he says.

“That’s what’s going to drive growth.”

The BTU Act would have the strongest, direct economic effect on the biomassheating industry, according to BTEC. There are a few other pieces of legislation at different stages of consideration in the House of Representatives and Senate worth mentioning, however, including two others that could break open the market for biomass thermal technologies and fuels using the business ITC to incentivize thermal projects.

The Power Efficiency and Resiliency Act or POWER Act would provide a 30 percent business tax credit for qualifying waste-heatto-power (WHP) property and combinedheat-and-power (CHP) property and extend the credit through 2018. “However, the bill’s proposed cutoff of 20 percent electrical efficiency for qualifying projects is in our view too high, as many technologies, such as backpressure steam and organic Rankine cycle engines, can produce a combined—electrical plus thermal—efficiency of over 60 percent with an electrical efficiency of less than 20 percent,” Kamrowski says. “It does not make sense to disqualify these projects with a myopic overemphasis on electrical efficiency.”

The WHP bill addresses this problem and provides a 30 percent business tax credit for qualifying WHP property, Kamrowski adds. Another big bill on BTEC’s radar is Sen. Ron Wyden’s Bioenergy Act of 2015, which would provide grants and R&D funding for biomass thermal and biopower project development, fund feedstock processing and logistics research and require USDA and DOE to coordinate bioenergy activities.

Tracking Transparency

At the end of last year, the U.S. DOE announced plans to conduct regular surveys of U.S. pellet producers that will be published by the U.S. EIA. After collecting public comments from its first proposal, the DOE issued a request in June to the Office of Management and Budget for a three-year clearance of a new data-collection survey on densified biomass fuel on Form EIA63C, Densified Biomass Fuels Report. Data

18 PELLET MILL MAGAZINE | JULY/AUGUST 2015

collected on Form EIA-63C would be used to estimate densified biomass fuel consumption in the U.S., along with production, sales and inventory at state, regional and national levels.

“The information that the survey is going to be asking pellet manufacturers to provide will be extremely valuable to our industry going forward to help inform investment opportunities in new capacity, and also help inform policy makers,” Niebling says. “You can’t make a good public policy, as it relates to renewable energy, unless you’ve got the data to base it on, and our industry has suffered from a lack of good, real-time information about our size, capacity, production, inventory and the value of product produced every year.”

Data gathered via the form will be published on the EIA website and in various EIA publications, including the Monthly Energy Review. The survey goal is to collect a range of data from densified biomass manufacturers, including information on pellets, bricks, briquettes, etc. Producers with 10,000 tons or more of capacity will be targeted by the effort. Producers under the 10,000-tons-per-year cap only need to submit the form once annually. Approximately 200 densified-biomass producers are expected to respond to the initial survey, with 150 respondents expected to file regular reports. “I think if the pellet industry is to mature in this country and grow to a point where it becomes a true mainstream fuel option for residential, commercial and industrial feed, we have to be willing to provide shared information.”

Niebling says the fact that the EIA has determined that the domestic pellet industry is important enough to survey and publish data on is a good sign and something he hopes the industry will embrace. Ackerly agrees with Niebling, considering the survey an important recognition for the U.S. pellet industry, meaning that it is being taken more seriously as a mainstream fuel. “This will help show how much wood pellets are contributing to the renewable energy pie and give it credit for that contribution,” Ackerly says. “The survey will keep track of what percentage of pellets are being exported, what percent are PFI certified and where the fiber came from.”

The DOE’s second comment period on the proposed information collection closed July 6.

PELLET POLICY »

Push From Overseas

Europe’s climate policy is affecting all facets of pellet production. Reforestation and stewardship have grown as an industry focus, evidenced by the SBP. The partnership was formed in 2013 by major European power generators that use biomass, mostly wood pellets, and who saw a need in the marketplace for harmonized sustainability criteria for solid biomass. “They recognized that this was necessary to lower costs within the supply chain and ensure security of supply,” Ginther says. “The goal of the partnership is for their certificate to be accepted in all European markets. In order for wood pellets, or any renewable energy, to become a true energy commodity the market demands the consistency and uniformity that the SBP certificate can provide.”

The SBP fully recognizes the credibility of existing forest certification schemes like the Forest Stewardship Council and the Program for Endorsement of Forest Certification, and does not wish to compete with or replicate them. “As an industry, we have been advocating for a unified set of sustainability criteria for many years, and the SBP certificate could fill that gap for us,” Ginther says.

“Consistent sustainability requirements across several markets creates efficiencies within the supply chain and make wood pellets an easily

traded commodity. Overall, these efficiencies mean a lower cost for the end consumer.”

Ginther believes the crux of the pellet industry is that U.S. producers aim to provide a sustainable, low-carbon product at a low cost.

“With one comprehensive set of sustainability criteria to follow, rather than different regulations and reporting requirements from each individual buyer, they can deliver on this promise more efficiently.”

Ten applicants have been accepted by the SBP as certification bodies and are progressing toward achieving SBP-approved status. Before receiving this status, a certification body must demonstrate its competence to undertake an audit of a biomass producer against the SBP standards in a real-life situation. Under the SBP framework, the biomass producer, typically a pellet mill, is certified by the SBPapproved certification body.

Another European-based program with the potential to support U.S. pellet production is the U.K.’s CfD program, which provides government support to power generators for using renewable energy sources in place of coal. The program is designed to help renewables compete with the low cost of fossil fuels, and to protect consumers from bearing the burden of costs associated with newer energy technologies. According to Ginther, it is important to note that the CfD

is a private contract between the government and the generator over a fixed period, which makes it a preferred method of subsidy over Europe’s Renewables Obligation. “The CfD offers more certainty to generators and often leads to lower financing costs for converting projects,” he says.

Many U.K. power generators use this subsidy scheme to help finance conversions, which helps U.S. pellet producers compete with the low cost of coal and other fossil fuels in the energy marketplace. Although the CfD program affects the U.K. market directly, all member states have similar programs to assist with the costs of bringing renewable energy technologies to the grid, Ginther says.

Whether on native or foreign soil, there are opportunities on the horizon with the potential to bolster the U.S. pellet industry.

Only time can tell, but these capital activities look like promising drivers to sustainably bring pellet fuel from minority to mainstream.

Author: Katie Fletcher Associate Editor, Pellet Mill Magazine 701-738-4920 kfletcher@bbiinternational.com

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PREVENTATIVE MEASURES: Only three months into operations, Zilkha Biomass Energy’s new 275,000-ton pellet mill in Selma, Alabama, has to rely on preventative maintenance during outages. Once experience accumulates, the plant can leverage more predictive maintenance.

PHOTOS: ZILKHA BIOMASS ENERGY

22 PELLET MILL MAGAZINE | JULY/AUGUST 2015

MAINTENANCE »

Down 'n Out in Pelleting Mills

Planned weekly or monthly and annual outages are essential to running a high-performing, efficient pellet mill.

BY RON KOTRBA

T

he last thing a pellet mill needs is a big-ticket item such as a chip dryer or a drag chain to unexpectedly fail during the busy season, which can last from midsummer through early spring. Replacement parts may be backlogged and have to be shipped from overseas, meaning dollars are hemorrhaging from the plant in unfulfilled orders and idled capital equipment. “If we’re down for two days during the busy season, we’re losing hundreds of thousands of dollars,” says Mike Shearer, operations manager for Confluence Energy’s two Colorado-based pellet mills in Walden and Kremmling.

This is precisely why plants big and small plan a major outage at least once a year. It’s a time to take on those much-needed, larger repair items and maintenance practices that are so vital to getting the most bang for the operational buck at industrial pellet mills.

More routine maintenance procedures are performed during weekly, biweekly or monthly shutdowns as well. Whether it’s a weekly maintenance outage or an annual capital shutdown, the plant needs to be idled the same way. The major difference, however, is that a capital shutdown takes months of planning. Ultimately though, both short- and long-term outages help ensure equipment longevity, plant safety and production efficiency, keeping margins as robust as possible.

Every week, Confluence Energy’s Walden and Kremmling facilities schedule routine maintenance from Friday through Sunday evening, Shearer says. As the weekly shutdown approaches, Shearer says it takes about five to six hours to empty the raw material bins. An early morning start produces empty bins by early afternoon. Shutting down the plant takes only about two hours.

After all the product is dried, the operations team starts cooling down the burner and dryer systems, and once those have cooled, all the material from the hammer mills have been pelleted. The equipment is then locked out and the mechanic shift, consisting of four personnel, take over.

Charlie Daw, plant manager for Zilkha Biomass Energy’s 275,000-ton pellet mill in Selma, Alabama, says his plant conducts monthly outages for routine maintenance that last eight to 24 hours. “We’re trying to line it up where we don’t take the whole plant out, maybe we’ll just take one dryer out at a time for inspection,” he says.

Zilkha Biomass-Selma just began operations in April, so the team is still refining its maintenance schedule and procedures. For now, the entire plant goes down during its monthly maintenance and inspection outages.

“We don’t like to go down with anything left in any hoppers,” Daw says. “There’s moisture and safety concerns. If we’re doing hot work, we don’t want wood chips present.” Zilkha

JULY/AUGUST 2015 | PELLET MILL MAGAZINE 23

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Biomass, like Confluence Energy, shuts down the entire plant, starting in the front and working back to the pelletizers, before performing maintenance.

At Indeck Ladysmith LLC’s 90,000ton pellet mill in Ladysmith, Wisconsin, the safety, quality and logistics manager Darren Winchester says his team plans for a six- to eight-hour maintenance day once a week, but this may be biweekly during the busy season.

He says while the plant is not manufacturing pellets during the outage, they can often package product while production is down for maintenance.

Shearer says routine weekly maintenance procedures range from changing gearbox oil and worn-out belts to replacing 2- or 3-horsepower motors. “If we think it’s going to fail, we replace it before it does,” he says.

“We keep track of hours, so anything we see coming up, we take care of.” Confluence Energy initially didn’t track logged equipment hours precisely, Shearer says, making predictive maintenance nearly impossible. The team now keeps a solid list of critical wear items. “That way, you know what’s coming at you,” he says.

Preventative vs Predictive

The longer a facility accumulates a history of operations with accurate, dependable tracking of hours, the more it can rely on predictive versus preventative maintenance.

Ray Budisavljevic took over as vice president of operations at Confluence Energy about six months ago. He says, once he came on board, he assigned unit numbers to all the equipment to track hours, and he developed a work-order system for maintenance, repair and replacement. “That’s all new here, we’re starting from scratch,” he says. “It’s important to know the life cycle of your parts.” For instance, Budisavljevic says the fan went out on the baghouse at one of Confluence Energy’s mills. “We knew we bought it two years ago and installed it two months after that, so we got 22 months out of the fan,” he says. “The manufacturer said that was about right, so we plugged that information into our system and scheduled it for replacement 20 months later.”

Confluence Energy utilizes software called Maintenance Pro to keep track of equipment hours and repairs. “The program issues work orders and scheduled maintenance 24 PELLET MILL MAGAZINE | JULY/AUGUST 2015

orders, and also keeps financial records of what each piece costs us to maintain so we can make the right call as to when the equipment has reached its lifespan, before dumping more money into it,” Shearer says.

There are several different philosophies on maintenance, and Budisavljevic says which one is followed depends on how much control is desired. “To me, preventative maintenance has always been oil changes, getting your greasing done and ongoing maintenance to get the expected life out of a part or machine,” he says. “Predictive maintenance is life cycle, being ready to replace the part before it goes out on you. A lot of places run to failure, and they have the part waiting and deal with the unintended consequences. Others don’t run to failure, so they’ll run it to 95 percent and replace it regardless if it’s needed because they don’t want unexpected downtime.”

Knowing equipment costs per hour is essential. Does it cost more to schedule replacement of a worn or near-end-of-life part before it fails, or is it more expensive to squeeze every ounce of life out of a part and change it out when it does finally go?

When considering operation of high-energyconsuming equipment such as dryers, for instance, replacing degraded items before they fail is a major cost-saver. Thompson Dryers says when seals and airlock blades are worn or ducting is damaged, air leaks into the drying system. Increased air flow into the system will increase the energy used to evaporate a pound of water. Regular maintenance of these components prevents air leaks, which can cost hundreds of thousands of dollars a year in most operations. The company says a reliable drying system will operate 8,400 hours per year or more, but proper maintenance is critical. The dryer drum, trunnion wheels, conveyors and motors need to be properly aligned; bearings and the drum’s tracks must be properly lubricated; worn parts must be replaced; the drum tracks, trunnion wheels and seal rings should be resurfaced regularly to ensure proper sealing and reduce stress loading and shock vibration.

Confluence Energy’s new tracking system is paying off with maintenance on its Bliss-brand pellet mills. “We know now that the center shafts go out at about 10,000 hours,” Shearer says. “We replaced all of them in the mills at the Kremmling facility. In

MAINTENANCE »

EXPECT THE UNEXPECTED: Zilkha Biomass-Selma Plant Manager Charlie Daw says his team routinely finds unexpected wear items during maintenance outages, but his operations team conducts inspections before outages to identify key indicators.

PHOTOS: ZILKHA BIOMASS ENERGY

Walden, we have four pellet mills and we’ve already replaced two of the center shafts, and we have two left to do in the next three months.” He says shaft replacement is about a three-day project, so it’s one of the larger repairs performed during its weekly outages from Friday through Sunday.

Winchester says predictive and preventive maintenances tie in with each other. The whole purpose of the weekly shutdowns at Indeck Ladysmith is preventative maintenance: checking belts; greasing; inspecting the drying systems; identifying wear, performance or durability issues with the conveyor chain, auger or auger trough; and checking the wipers on the airlock system. Through such measures, the team develops a history and is better able to predict when, for example, to change the airlock wipers over or flip them—whether that’s every six months or six weeks. “So that to me is when we talk about predicting it,” he says. “Through our regular preventative practices, we know that every three months we need to change out the bucket elevator

belt. We schedule it in addition to keeping an eye on it.”

With only three months of operational history at Zilkha Biomass-Selma, Daw says his team relies mostly on preventative maintenance at this point. “That’s what the OEMs recommend—every seven or 30 days, changing oil, lube, doing what they recommend,” he says. “We’re hoping to quickly get into predictive maintenance as we continue to learn the equipment and how to operate it. Preventative is time-based, and predictive is more condition-based. As we learn what ‘good’ looks like, we’ll move more to predictive maintenance.” Daw says he intends to leverage infrared cameras more to gauge, for example, bearing temperature. “If we see that one day it’s at 100 degrees, and the next it’s at 101, and then goes to 105, that’s a step change, a predictive indicator that it’s going to fail,” he says. “Now we’re doing more preventative maintenance based on OEM recommendations, but we’re hoping to move toward predictive.”

JULY/AUGUST 2015 | PELLET MILL MAGAZINE 25

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Monthly, Zilkha Biomass-Selma performs some corrective repairs and inspections.

“There’s concerns about fouling in the dryer—the induced draft fan—so we open it and make sure we don’t have material fouling the blades,” Daw says. “Another example is, on our hammer mills we inspect for tolerance and the hammer internals to make sure we don’t have a large wear pattern, and that they’re wearing evenly, so we inspect that regularly to make sure we don’t need to make repairs or replace parts.” He says operator inspections are also conducted before outages to identify key indicators for what has to be done once the plant is down.

Daw says unexpected finds during maintenance outages have come to be expected. “It’s newer equipment, we don’t have a history with it yet, so we’re always encountering issues that are not expected,” he says. “A bearing was supposed to wear out in six months, but it wore out in three. It’s mostly minor things, but sometimes it can be major.”

One example Daw gives is the headaches caused by the drag chain. “Once we opened

the conveyor, there was quite a bit of wear, more than what we anticipated,” he says. “It was mainly due to the design of the drag chain—it’s a high-incline drag chain, about to the point where physics says this is impossible.

We ended up having to rebuild the chain and replace it, and we’re working with a vendor now to figure out a better situation. That was one of the ones where we said, ‘Wow, this is more than we planned for.’ We planned for a 24-hour shutdown, but it went 36 hours. We replaced an entire section of the chain.”

Annual Outages

The biggest differences between routine weekly or monthly and annual shutdowns, beyond sheer duration, are the comprehensive planning involved, and size and cost of projects undertaken. Annual outages are also the times many pellet mills plan capital improvement projects. Winchester calls these outages capital shutdowns, and he was in the midst of one at press time. Indeck Ladysmith’s once-a-year outage typically lasts one week, but depending on the scope of work it could go shorter or

longer. “If the airlock needs replacement, or the housing is getting worn through, it might take a couple-three days to replace, so the magnitude of what we’re doing during our capital shutdowns ties into what we’re doing weekly.” For instance, a drag chain might need replacement with a cost of $12,000. The lead time for delivery after ordering may be months, and the mill might need a crane onsite to move it into position. Therefore, planning for an annual outage starts three to four months in advance.

A capital shutdown could involve a facility expansion, but Winchester says much of what occurs is efficiency improvements to reduce down time. “There are a lot of ways to incrementally improve production efficiency, without adding a mill,” he says.

Daw says Zilkha Biomass-Selma is planning for a four-day outage late this fall in November or December. “As soon as we see critical issues, we start planning and get it on our monthly or bimonthly maintenance schedule,” he says. “And we’re planning jobs now for November/December. As soon

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as we find out, we start planning. Parts are a long lead time, many are coming from foreign companies. Most of our products are made in Europe so we have to rely on EU markets.

That adds four weeks because of shipping and customs, so the planning starts quickly and depends on the length of the job.”

Some key items for inspection during the upcoming annual outage at Selma include the plant’s environmental equipment—wet electrostatic precipitators, scrubbers, the regenerative thermal oxidizer—along with the compressed air and steam systems.

At Confluence Energy’s facilities, Shearer says they’re down for major repairs three to four weeks a year in the spring during the off-season.

“We replace wear items like rolls and dies, and change the teeth in our Laidig raw material handling system,” he says. “We start planning three to four months in advance. It’s also the time when we do capital improvements. Last year, one capital improvement we performed at the Kremmling facility was putting in a new MEC Co. dryer. It was a half-a-million-dollar project that took four months to plan. We

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Production Efficiency

Consider it ironic, but plants have to go down to be effective when they’re up. The most important qualifier to this is being in control of when the plant is down—avoiding having to shut down versus planning a shutdown.

“Efficiency ties into downtime, so reducing downtime directly impacts production efficiency,” Winchester says. Other process efficiency improvements come through debottlenecking and finding opportunities to improve throughput, he adds. “Maybe it’s a limitation of your conveyor—it can only move so much material—or your product recipe and raw material species and your respective dies, or critical elements like moisture content, knowing what it is and controlling that. You need process measurement devices like moisture meters that are reliable and accurate, so you can dial it in and minimize variation and, importantly, stay on target. That has a

Author: Ron Kotrba Senior Editor, Pellet Mill Magazine 218-745-8347 rkotrba@bbiinternational.com

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huge impact in how efficient your process is.”

Winchester says he can’t emphasize enough how vital planned downtime is to business. “It’s true that when you’re sitting idle, you’re not making money. You’re losing money,” he says. “But, it’s critical for the plant to perform. Fundamentally, equipment runs out. It’s a critical element of business that’s not to be overlooked. There’s a lot of work staying on top of that.”

Planned outages are extremely important to production efficiency, Daw says. “Mainly because in startup, we don’t know what we don’t know yet. In order for our production efficiency to stay high, we need planned shutdowns to repair properly and quickly.

Those outages are very critical to our production.”

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MR. ROBOTO: Building pallets of bagged pellets, once the responsibility of a small team of laborers, is now often handled by robots, which can build a perfectly stacked pallet in under three minutes.

PHOTO: TIM PORTZ, BBI INTERNATIONAL

Packaged Efficiency Once a highly manual process, bagging and stacking finished product has greatly improved with automation.

BY TIM PORTZ

28 PELLET MILL MAGAZINE | JULY/AUGUST 2015

OPERATIONS »

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50,000-ton-per-year pellet plant operating five days a week for 10 hours per day will produce 200 tons of wood pellets each day. While instances of bulk pellet delivery are on the rise, the overwhelming majority of pellets produced by manufacturers serving the domestic residential market are placed in 40-pound bags, stacked on pallets and covered to keep the sun and rain off them. At a 200-ton-per-day clip, pellet manufacturers have to efficiently fill more than 10,000 bags, stack them on 200 pallets comprised of 50 bags per pallet, wrap them and move them into a waiting storage area. Once a daunting task that introduced a very real bottleneck and operational challenge for pellet manufacturers, advances and investments in packaging automation have largely driven out the vast majority of human labor the task once required.

Practical Evolution

Ray McCleod, plant manager at Olympus Pellets in Shelton, Washington, worked his way through college in the early ‘90s bagging pellets and building pallets. “I went from what you’d probably call the dinosaur age to what it is now,” McCleod says.

Starting his career in the pellet industry by packaging pellets at night, McCleod knows firsthand the physical toll that kind of work takes on a person. “I’d bag and stack a whole ton by hand, run around the pallet with a stretch wrapper, then jump on a forklift and take it outside,” he recalls. Still, the throughput McCleod and his fellow coworkers were able to achieve with that entirely manual packaging solution would not be able to keep pace with current production standards. “We had at times six people in the packaging department, seven if you count the forklift driver packaging the tons,” he says. “We were only getting 100 tons per day, maybe a bit more on a very good day.”

At that rate, manual packaging would cut current throughput by nearly 50 percent.

Fortunately for McCleod and the industry,

a robust and well-established packaging industry began to knock on pellet plants’ doors and one machine after another drove in vital operational efficiency.

While options abound for pellet producers, an automated packaging solution needs to accurately fill bags with 40 pounds of finished product, deliver them to a palletbuilding robot that will construct a perfectly built pallet of 50 finished bags, and finally protect the entire pallet from the elements with shrink wrap or a plastic hood. All of this needs to happen without fail at nearly a 20-ton-per-hour clip.

Jeff Conrad, eastern regional sales manager for Hamer, works with pellet manufacturers on a weekly basis, and still finds operations that are not yet fully operational. “I go to facilities and see folks putting a bag up underneath a scale and triggering a switch that releases pellets into the bag. Then that person feeds that bag into a hot-air sealer. We have people who are doing that and then sending those bags to a pallet-building robot. If they aren’t doing that, then someone is hand building those pallets, and there are all sorts of those kinds of operations still out there,” Conrad says.

The challenge, Conrad points out, is finding consistent, quality labor. “Good workers are hard to come by,” he says.

“People don’t want to work as hard today as they did generations before. Employers are having a hard time finding workers.

The kind of worker they are finding won’t stay there very long, so they have to retrain people, and there is constant worry over a work-comp injury—someone twisting their back wrong.”

This manual approach can be expected to yield six to 10 bags per minute. “That’s with the supervisor watching,” Conrad says.

An automated solution, like Hamer’s 2090 bagging machine, can be expected to form, fill and seal 15 to 20 bags per minute. “You set the machine to the pace you want and it will do that all day long,” he says. “It doesn’t take breaks. It doesn’t come in late.”

Conrad reports that upon seeing an

automated form, fill and seal machine run, they almost always believe the machine will be far more expensive than it actually is.

“The perceived value on these solutions is sky high,” he says. While producers could opt for automated bagging alone, they seldom do. A complete solution will include a hopper or a surge bin that receives finished pellets from the chiller; a scale that delivers exactly 40 pounds of pellets into the bagging machine; the form, fill and seal machine; a pallet-building robot; and finally a stretch wrapper or hooder.

An entire packaging solution can represent a half-million-dollar investment for producers. Conrad notes that producers continue to show strong interest in automated solutions because they enjoy a return on their investment so rapidly, usually between 30 to 36 months. As if to underscore the obvious value a packaging solution adds to pellet operations, Conrad adds, “We’re taking people who have never bagged a single bag of pellets before and selling them a fully automated system from day one.”

Keep It Simple

Jeremy Collins, a sales professional from Rethceif Packaging—another OEM serving pellet producers interested in packaging automation—stresses the importance of operational simplicity when considering an automation investment. “The value proposition that we have for producers in an automated system is simplicity,” he says.

“We don’t have a lot of moving parts in a vertical form, fill and seal―fewer moving parts, less maintenance, more uptime.”

Collins identifies the pellet industry as a “targeted market,” but by no means does it represent the bulk of Rethceif ’s annual business. “The vast majority of what we do is compression for the wood shavings industry,” reports Collins. That said, many of Rethceif ’s wood shavings customers also produce pellets so the segment was a good fit for their business, and Collins notes that activity in the sector is on an uptick. “There is definitely an increase for us in capital up-

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« OPERATIONS

ALL-IN-ONE: The flagship of Hamer’s offering, the Model 2090, is deployed in a horizontal format, and pellet producers can expect the machine to produce 15 to 20 bags of product per minute.

PHOTO: HAMER INC.

grades and capital improvements for the wood pellet industry this year,” he says. “It has been soft in the last couple of years, but the last two winters being hard winters have increased their confidence in the market and they are making investments to increase their efficiencies.”

While producers are drawn to the immediate reduction in personnel introduced by automation, the financial benefit isn’t limited to labor savings. “The other savings customers see moving from a manual solution to an automated solution is film cost, the cost per bag,” Collins says. “It’s less expensive to buy single-wound sheeting and form the bag on the machine than it is to buy premade bags. Typically, what we hear from film suppliers is the savings is 10 percent when moving towards an automated system.” At roughly 20 cents per bag, producers producing and bagging 50,000 tons per year are likely spending nearly $500,000 on bag stock, so a 10-percent savings in that expense is significant.

While the throughput of a Rethceif 5010 is certainly impressive―bagging at rates of 20 bags per minute when operating with dual scales―Collins urges producers to maximize the efficiency gain by also deploying pallet-building robots. “Actually, manual bagging can be very fast, but finished bag handling is where the bottleneck comes into play,” he says.

A well-formed pallet of wood pellets includes 50, 40-pound bags of pellets, arranged neatly to create a uniform stack of bags that doesn’t lean or bulge. Rethceif deploys Kawaski pallet-building robots, and with their automated solutions, the robots are programmed to match the speeds of the automatic bagging line. A dual-scale bagging line will deliver 20 bags to the palletbuilding robot per minute, allowing the robot to build a full pallet, 1 ton of pellets, in under three minutes. The biggest challenge for producers at that point is managing their inventory and storage capacity.

Final Step

Once built, a pallet of bagged pellets must be protected from the elements as finished product is often stored outside for months at a time before being delivered to pellet retailers. In the industry’s early days, finished pallets were manually wrapped in multiple layers of stretch-wrap. Eventually, producers began to opt for automation in stretch wrapping. “We used to wrap everything by hand,” McCleod laughingly says.

“We finally got a stretch wrapper. I was so proud of myself to push my boss to get that thing.”

Automated stretch wrappers can still be found across the industry, but the trend is to move towards a stretch-hood, pallet-wrapping solution—one of the fastest growing

30 PELLET MILL MAGAZINE | JULY/AUGUST 2015

RETHCEIF’S WORKHORSE: The VFF-5010 is a vertical free-flow bagger that offers producers the kind of throughput they are looking for in a small footprint. With one scale, the system is capable of 12 bags per minute. With two scales, it can do 18 to 20 bags per minute.

PHOTO: RETHCEIF PACKAGING

« OPERATIONS

applications in the automatic-packaging space. “There’s a lot of customers who have this item on their wish list, “Conrad says.

He adds that about a third of the systems he quotes now include a stretch hooder. A stretch hood is made from a continuous roll of material. The machine stretches the material over a finished pallet, releasing it to create a water-tight barrier that greatly contributes to the integrity of the pallet.

Wayne Cornella, plant manager at Lignetics of Idaho, recently supervised the installation of a hooder at their production facility in Sandpoint. “There was a lot of different reasons we moved to the hooder including stretch-film pricing and labor,” he says. “One of the big issues we had here is putting on the plastic covers that we had, and we’d actually have to go and tie the covers on to the pallet. That was pretty labor intensive.”

Before installing the hooder, workers at

Lignetics would stretch wrap the pallet and then tie a final cover over the wrapped pallet. Invariably, some covers would be blown off by the wind and time would have to be spent re-covering pallets. “Once the hoods are stretched over the pallet, the wind can’t blow it off,” Cornella says. “With the covers, the wind would blow them off and then, of course, you’d get sun damage. There were just lots of reasons for us to switch to it.”

Olympus Pellets has also installed a stretch hooder. “My forklift driver rarely ever gets off his forklift now that we have the hooder,” McCleod says. “Once the ton comes out the door, he picks it up and puts it away. Before, our forklift drivers had to cover the ton, staple the cover onto the ton, put a piece of plywood on the top—if they were going to stack it—and then go take it out. Now, they just have to put a piece of plywood on it every once in a while.”

The durability and efficiency enhance-

ments of a stretch hooder are immediately apparent, and producer inquiries are coming in at an increasing rate. This isn’t a surprise for Conrad. “Certainly, the pallets are going to be more water tight,” he says. “You are definitely going to get a water-tight situation. With wood pellets, you don’t want moisture, but it is a more expensive solution. Instead of $100,000 for a stretch wrapping solution, you might be looking at $220,000.”

Return on Investment

While automation can and does get deployed in an à la carte manner, a fully automated, end-to-end solution is more common. Depending upon the various options, including the decision to opt for a stretch hooder versus a stretch wrapping solution, producers can expect to see prices ranging from $450,000 to $500,000. A fully automated packaging line, however, has an immediate impact on plant staffing and labor expenses. “When I used to run a plant in Coeur d’Alene, we had 14 people working six days a week, and those 14 people did not include secretaries,” McCleod says.

“Now, I’ve got 10 people working five days a week and those 10 include absolutely everyone.”

Additionally, McCleod points to the relatively light footprint his operation currently sits inside. “Our building is 200 feet long and we’ve got everything we need in this building except for the burner, the dryer and the hammer mills and stuff,” he says.

“Everything we need to make the pellets is inside including the pellet mills, the cooler, the bagger, the robot and the hooder. It’s all right in front of us and you can see it running. You just stand there and watch it run.”

Author: Tim Portz Executive Editor, Pellet Mill Magazine 701-738-4969 tportz@bbiinternational.com

32 PELLET MILL MAGAZINE | JULY/AUGUST 2015

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