2021 Pellet Mill Magazine Issue 4 by BBI International

Issue 4, 2021

HEATING UP Global Pellet Demand, Spot Prices on the Rise Page 12

PLUS: Surveying Pellet

Producer Commodity Prices Page 16

Balancing Maintenance With Load Strategy Page 20

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Contents »

2 0 2 1 | V O L U M E 11 | I S S U E 4

DEPARTMENT 10 TECHNOLOGY

Thinking Inside the Box Prodesa’s mobile pellet plant technology is aimed at minimizing investment risk. By Anna Simet

FEATURES 12 OPERATIONS

Surveying Costs Pellet Mill Magazine shares the results of a producer survey evaluating inflation and increased commodity prices. By Anna Simet

04 EDITOR'S NOTE Commodities, Inflation and the Upcoming Heating Season By Anna Simet

05 EVENTS

COLUMNS

06 The Table is Set By Tim Portz

BUSINESS BRIEFS

Pellet Mill Magazine

Advertiser Index 2

2022 Int'l Biomass Conference & Expo

Biomass Magazine

Biomass Magazine's Webinar Series

CPM Global Biomass Group

CSE Bliss

Delta Energy Services, LLC

Industrial Bulk Lubricants (a Dansons company)

KEITH Manufacturing Company

Mid-South Engineering Company

Oxidizers, Inc.

PAL s.r.l.

Pellet Mill Magazine

U.S. Composting Council

16 MARKETS

Global Pellet Market Insight Hawkins Wright projects the global pellet supply chain will be tight through the duration of the upcoming heating season. By Anna Simet

CONTRIBUTIONS 20 MAINTENANCE & REPAIR

Consequences of Load Strategy Fatigue is a slow, often undetected damaging process of material under iterating mechanical loads, temperatures and other impacts. By Holger Streetz

22 TECHNOLOGY

Conveyors: Designing for the Future by Innovating the Present Bulk handling is evolving when it comes to safety, efficiency and automation. By Todd Swinderman

24 POLICY

A Rational, Pragmatic Off-ramp to Decarbonization Using sustainably sourced wood pellet fuel in place of coal is an essential part of the decarbonization transition. By William Strauss

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« Editor's Note

Commodities, Inflation and the Upcoming Heating Season

Anna Simet

EDITOR asimet@bbiinternational.com

As we close out November with producing the final Pellet Mill Magazine of 2021, I decided to look back to see what we were reporting in the same edition in 2020. One of the features reviewed the virtual Pellet Fuels Institute Annal Conference, which had quite a bit of focus on initial implications of the pandemic. One of the main challenges at the time was simply sustaining operations, and most pellet producers were able to do so with minimal interruptions, though staffing challenges have persisted. One year later and those same challenges remain, on top of inflation and ballooning commodity prices, as well as supply chain interruptions. As such, I decided to conduct a survey to gauge the degree to which producers were being affected, and provide some kind of basis for comparison. While I didn’t get quite as many respondents as I had hoped to, I think the sampling is a good representation of where things are at—10 different heating pellet producer companies responded to questions about the prices of commodities essential to their operations, including pallets, grease and fiber, as well as other issues that are presenting challenges for some. “Surveying Costs,” page 12, shares the results of the survey. A sincere thank you to those who took the time to answer these questions. While the aforementioned feature is focused on the domestic wood pellet industry, our page-16 feature, “Assessing the Global Supply Landscape,” pivots to global markets. In it, you’ll find commentary from two biomass consultants at Hawkins Wright who share insight about spot market prices and buying trends, soaring natural gas, carbon and power prices and implications on pellet consumers, as well as policy developments and other interesting market influences. Overall, it is expected to be a pretty tight market through the winter, especially so if the cold comes early or persists into spring. That said, as noted by Rachel Levinson, biomass research manager, lessons were learned during the last “shortage” that occurred a few years ago, so it is unlikely that utilities will find themselves in the same positions. Finally, we just sent the 2022 North American Pellet Producer Map to print. While there were considerably fewer projects under construction this year than last, it’s not surprising given the circumstances. It will certainly be interesting to see what happens a year from now. Our goal is to ensure that data on the map is as accurate as possible, so please reach out with any additions, modifications or other changes.

Subscriptions to Pellet Mill Magazine are free of charge—distributed 4 times/year—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 high-quality 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.

4 PELLET MILL MAGAZINE | ISSUE 4 2021

Industry Events » 2022 International Biomass Conference & Expo

March 14-16, 2022

The Prime F. Osborn III Convention Center, Jacksonville, FL

EDITORIAL

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

DESIGN

The 15th annual International Biomass Conference & Expo unites industry professionals from all sectors of the world’s interconnected biomass utilization industries—biobased power, thermal energy, fuels and chemicals. 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. This event provides the opportunity to meet face-to-face with industry experts who will offer new technology and solutions to making plants and facilities safely operate at peak capacity and optimum efficiency. (866) 746-8385 - www.BiomassConference.com

VICE PRESIDENT, PRODUCTION & DESIGN Jaci Satterlund jsatterlund@bbiinternational.com

Carbon Capture & Storage Summit

GRAPHIC DESIGNER Raquel Boushee rboushee@bbiinternational.com

Capturing and storing carbon dioxide in underground wells has the potential to become the most consequential technological deployment in the history of the broader biofuels industry. Deploying effective carbon capture and storage at biofuels plants will cement ethanol and biodiesel as the lowest carbon liquid fuels commercially available in the marketplace. The Carbon Capture & Storage Summit will offer attendees a comprehensive look at the economics of carbon capture and storage, the infrastructure required to make it possible and the financial and marketplace impacts to participating producers. 866.746.8385 | FuelEthanolWorkshop.com

PUBLISHING & SALES CEO Joe Bryan jbryan@bbiinternational.com

PRESIDENT Tom Bryan tbryan@bbiinternational.com VICE PRESIDENT, OPERATIONS/ MARKETING & SALES John Nelson jnelson@bbiinternational.com SENIOR ACCOUNT MANAGER/ BIOENERGY TEAM LEADER Chip Shereck cshereck@bbiinternational.com BUSINESS DEVELOPMENT DIRECTOR Andrea Anderson aanderson@bbiinternational.com SENIOR ACCOUNT MANAGER Marty Steen msteen@bbiinternational.com ACCOUNT MANAGER Bob Brown bbrown@bbiinternational.com CIRCULATION MANAGER Jessica Tiller jtiller@bbiinternational.com MARKETING & ADVERTISING MANAGER Marla DeFoe mdefoe@bbiinternational.com MARKETING & SOCIAL MEDIA COORDINATOR Dayna Bastian dbastian@bbiinternational.com

JUNE 13, 2022

Minneapolis Convention Center | Minneapolis, MN

2022 Int’l Fuel Ethanol Workshop & Expo

JUNE 13-15, 2022

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

Biodiesel & Renewable Diesel Summit

JUNE 13-15, 2022

Minneapolis Convention Center | Minneapolis, MN The Biodiesel & Renewable Diesel Summit is a forum designed for biodiesel and renewable diesel producers to learn about cutting-edge process technologies, new techniques and equipment to optimize existing production, and efficiencies to save money while increasing throughput and fuel quality. Produced by Biodiesel Magazine, this world-class event features premium content from technology providers, equipment vendors, consultants, engineers and producers to advance discussion and foster an environment of collaboration and networking through engaging presentations, fruitful discussion and compelling exhibitions with one purpose: to further the biomass-based diesel sector beyond its current limitations. 866.746.8385 | BiodieselSummit.com

Please check our website for upcoming webinars www.biomassmagazine.com/pages/webinar

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

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The Table is Set BY TIM PORTZ

As this issue of Pellet Mill Magazine is delivered to pellet producers around the country, it will find them wrapping up their 2021 fiscal year, but squarely in the middle of the 2021-’22 heating season. One of the unique aspects of our industry is how prime selling season lands astride two calendar years, evenly split by New Year’s. The fourth quarter finds pellet-burning consumers finally heeding their thermostats and building their inventory for winter. In every year since at least 2016, the highest-grossing month for pellet sales has been either October or November. The first quarter of the fiscal year coincides neatly with the back half of the pellet-buying season, and in years with an early onset to winter, consumers with pellet appliances realize they’ll have to augment their inventories to make it through the season. Conversely, for years with relatively mild winters, pellet sales in January and February can really tail off. As a result, first quarter sales numbers can fluctuate wildly from year to year. A lackluster back half of the 2020-’21 home heating season resulted in the slowest start for wood pellet sales since 2016. In Q1 of 2021, wood pellet producers sold 373,916 tons of product, a significant departure from the 500,000-ton first quarters of both 2019 and 2020. With that kind of a start to the year, pellet producers could be forgiven for some pessimism. Why, then, are producers across the country generally bullish on what remains of 2021 and the 2021-’22 heating season? Participating in a market that is so impacted by variables beyond their control, pellet producers luxuriate in those variables that are available to them particularly when they are favorable. In October, the U.S. EIA projected American homeowners could expect significantly higher heating fuel prices. Natural gas heating was projected to rise 30%, with heating oil prices forecast to be as much as 50% higher. One of the hallmarks of wood pellet heating has always been the discount on overall heating costs it offers to consumers, but in the recent past, these savings were all but erased by historically low competing fuel prices. This year, with fossil fuel prices ramping back up to pre-pandemic levels, the economic argument for burning wood pellets has returned. The impact of higher fossil fuel prices has always

6 PELLET MILL MAGAZINE | ISSUE 4 2021

been difficult to measure, as the data on consumers who retain both fossil fuel and wood pellet appliances is vague at best. It makes sense that a consumer with both a heating oil appliance and a wood pellet appliance is more likely to choose the lower-cost option, but at what level of a discount? And how many consumers out there have maintained both appliances and regularly toggle back and forth based on fuel pricing? These are significant variables that are informed by anecdotal reports from retailers, at best. If wood pellet producers get the kind of winter that only heating professionals can cheer, then the industry is well positioned from an inventory perspective. Producers build inventory through spring, peaking in July. This summer found the sector with over 300,000 tons of product on the ground, the strongest inventory position since 2018. If competing fuel prices remain high and Old Man Winter hangs around until April, these inventories will be gobbled up. Admittedly, that is a big “if.” So far, winter has been slow to come. Heating degree days (HDD) across most of the pellet-burning parts of this country are lagging well behind historical averages. The Northeast, Mid-Atlantic, Great Lakes, Mountain West and Pacific Northwest are all at least double-digit percentages off their normal HDD pace, with some locales off historical averages by 50%. If this mild winter persists, the industry will likely exit the 2021-’22 heating season with carryover inventory. Still, the last time producers had over 300,000 tons of inventory in July (2018), the sector experienced a massive drawdown bottoming out, at just 47,000 tons in February. There were some nervous moments in the early spring of 2019, and it has taken until July of this summer to push inventory levels back over 300,000 tons. Three variables impact the strength of any home heating seasons, and two of three are already favorable for producers, inventory and competing fuel prices. The third, winter’s chill and it’s staying power, will determine whether this year’s home heating season will be a boom or a bust. Author: Tim Portz Executive Director, Pellet Fuels Institute tim@pelletheat.org www.pelletheat.org

Business Briefs

PEOPLE, PRODUCTS & PARTNERSHIPS

Japan proposes standards for nonindustrial wood pellets The government of Japan has proposed new Japanese agricultural standards (JAS) for wood pellet fuel used in nonindustrial applications, such as residential stoves and commercial boilers. The proposed JAS would apply only to nonindustrial use of wood pellets manufactured from “unutilized wood from forests, plantation, and others; byproducts and residues from the wood processing industry; and chemically untreated

reclaimed lumber.” A report filed with the USDA Foreign Agricultural Service’s Global Agricultural Information Network states that Japan’s Ministry of Agriculture, Forestry and Fisheries aims to classify wood pellets for nonindustrial uses into three grades based on technical specifications and origin of feedstock. The proposed standards are based on ISO 17255-2, which was published in 2014.

US wood pellet exports up in September The U.S. exported 690,515.4 metric tons of wood pellets in September, up from both 647,901.5 metric tons in August and 608,099.7 metric tons in September 2020, according to data released by the USDA Foreign Agricultural Service on Nov. 4. The U.S. exported wood pellets to more than a dozen countries in September. The U.K. was the top destination at 454,114.8 metric tons, followed by the Netherlands at 110,843.4 metric

tons and Denmark at 88,322.8 metric tons. The value of U.S. wood pellet exports reached $101.9 million in September, up from $90.43 million in August and $85.75 million in September 2020. Total U.S. wood pellet exports for the first nine months of this year reached 5.56 million metric tons at a value of $799.03 million, compared to 5.41 million metric tons exported during the same period of last year at a value of $734.09 million.

From size reduction to the perfect finished pellet, our CSE Bliss and Graf Equipment partnership has you covered. From single units to complete systems, our custom configured hammer mills, pelleting equipment and conveyance systems provide precision, energy efficiency uperior finished product. pro and a superior

info in fo@ @c cseb sse eb blliss.com | 580.749.4895 80 749 9 48 489 4895 95 9 5 | www.csebliss w .com 8 PELLET MILL MAGAZINE | ISSUE 4 2021

Enviva, GreenGasUSA announce 10-year RNG offtake agreement Enviva Partners LP and GreenGasUSA announced a 10-year RNG offtake agreement to decarbonize natural gas-related emissions in Enviva’s operations. The agreement is expected to eliminate more than 64,000 metric tons of carbon dioxide (CO2) equivalent from the atmosphere every year, which equates to 14,000 passenger cars being removed from the road. Enviva’s commitment underwrites a standalone GreenGasUSA project to install equipment that captures and treats methane current-

ly being released directly into the atmosphere at a food processing facility in rural South Carolina. As part of the agreement, in the third quarter of 2022, GreenGasUSA will transport the RNG to Enviva’s Hamlet plant to be utilized in its emissions control equipment in place of fossil natural gas. The methane captured and emissions eliminated are expected to offset approximately 75% of all Enviva’s direct emissions from its manufacturing operations, or Scope 1 emissions, on an annual basis for the duration of the 10-year agreement.

Louisiana governor visits Drax Power station Louisiana Gov. John Bel Edwards visited Drax Power Station, the U.K.’s largest renewable power generator, prior to attending the COP 26 climate summit that was held in Glasgow, Scotland, Oct. 23-Nov. 12. During his tour of the power station, Edwards learned more about Drax’s plans to deploy groundbreaking bioenergy with carbon capture and storage technology.

Drax’s operations in Louisiana and Mississippi indirectly support more than 1,200 jobs. Louisiana is home to Drax Biomass headquarters, located in Monroe, as well as the company’s LaSalle and Morehouse pellet plants. Drax also operates an export facility in the Port of Baton Rouge.

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« Technology

Housed in certified sea containers, the PelletBox can produce up to five tons of pellets per hour. PHOTO: PRODESA

Thinking Inside the Box Prodesa’s mobile pellet plant technology is aimed at minimizing investment risk.

BY ANNA SIMET

trategic location is a critical component for wood pellet operations, especially those with business models based solely or primarily on wood pellet production. The more accessible fiber, the better—more options, less risk. But what if that risk could be reduced even further via the ability to relocate if fiber streams dissipated? That’s precisely the idea behind PelletBox, Prodesa’s containerized pellet plant concept. Debuting in in 2019, the compact, modular pellet plant is being deployed in numerous U.S. locations, according to Mike Curci, Prodesa capital equipment sales manager. This includes Drax’s three 40,000-ton-per-year satellite plants under development in Arkansas, two of which have undergone assembly. 10 PELLET MILL MAGAZINE | ISSUE 4 2021

The journey from fabrication to arrival on-site demonstrates the mobile nature of the units, with the origin being the company’s headquarters in Zaragoza, Spain. “We manufacture them in our production facility there, using certified sea containers,” Curci says. “We then test run them, from running all the cabling to ensuring motors are running properly. Once that’s done, we spool wires back up, uncouple conveyors, replace panels removed as part of assembly, and then we truck them out to the port.” From there, they are loaded on to a boat and shipped to the customer. Meanwhile, that customer is laying out civil work—a 60-square-meter concrete platform is required. “Once delivered, we can stack up the complete units in a single day and assemble rather

Once PelletBox units have been fully tested and reassembled, they are loaded onto trucks and shipped to customers. PHOTO: PRODESA

quickly,” Curci says. “It drastically reduces the cost of a single pellet mill type of facility.” It also reduces the number of companies and contractors onsite. “We or the owner will hire a local millwright group, but they’re just reconnecting wires and conveyors,” Curci says. “From there, we really only need to determine how material will enter the system, and then what will be done with the pellets when they come out. We handle everything from the inlet to discharge, and can engineer a frontloading system or silo to handle the finished pellets at the site.” Compact Components A Pelletbox unit consists of five shipping containers—four 40-foot containers, and one 20-foot container for the electrical components. The five-ton-per-hour system is compatible with dry material including chips, sawdust and shavings and includes stages of grinding and pelletizing. Inside the containerized units, major components include a destoner, filtration system, hammer mill, pellet mill and feeding hopper, pellet screen, screw conveyor and cooling system. Electrical installed power is 745 kilowatts. Curci notes that Prodesa does have the ability to make some design changes—for example, a customer with material that doesn’t require grinding. ‘We can reduce or remove the hammermill portion,” he says. “So that would reduce cost. We have a couple different configurations in terms of layout and where we put the MCC (motor control center) building with platforms.” In the example of Drax, all three facilities will be the same, thus reducing engineering cost and simplifying manufacturing. “For groups that have multiple installations, we also have the commonality of spare parts—this reduces the amount of inventory that they or we keep on the shelf,” Curci says. He emphasizes that though the compact design is meant to be part of the allure, the systems are by no means limited to smallscale operations. “We have one commercial-scale plant with 18 in its facility. It’s the same machinery used in large-scale units—it’s not a small production. It’s an industrial-sized, 500-horsepower pel-

let mill that we’ve been able to containerize to reduce the cost of entry into the marketplace for those looking to get into the pellet industry.” Boxed Benefits Out of PelletBox’s intended benefits, Curci emphasizes the ease of transport. “They are very easy to move and install,” he says. “For example, if one is colocated with a sawmill but then later the sawmill shuts down, it can be picked up and relocated to take advantage of other residuals or fiber. It minimizes the risk, particularly in emerging markets in other countries. And even here in North America at sawmills and pallet recycling facilities—many are getting into the pellet space, if they are leasing the building and need to relocate, we can do that.” And for those new to the industry, Prodesa provides the education necessary to run these facilities. “We start at the theory of size reduction, and we walk through the startup operations, the maintenance troubleshooting, all the way through the entire process,” he says. “By time we’re done with the training program, they’re able to operate that facility and have knowledge for other facilities as well. We’re really trying to drive education, especially ensuring the safety aspect is hit on hard during training programs—not only with PelletBox, but other facilities, too. For these sawmills waiting to get into this, we want to provide them with a very safe and reliable operation. This system already has fire protection in it and is heavily engineered with safety in mind.” The COVID-19 epidemic has not had an impact on business, Curci adds. “There has been a lot of activity—especially flurry in the North American market. It’s very exciting.” Author: Anna Simet Editor, Pellet Mill Magazine asimet@bbiinternational.com 701-738-4961

WWW.BIOMASSMAGAZINE.COM/PELLET 11

« Operations

Surveying Costs Pellet Mill Magazine shares the results of a producer survey evaluating inflation and increased commodity prices in the wake of the pandemic. BY ANNA SIMET

Q1 During the past 18 months, how much of an increase in price of pallets have you seen?

Q2 In the past 18 months, how much have labor costs increased at your operation?

None

0-5% Less than 10%

10-20%

20-30%

5-10%

20-40%

30-40%

+20% More than 40%

ost consumers have been impacted in one way or another by surging commodity costs as a result of the pandemic. From the price of food, fertilizer, energy, lumber, wages and the extensive list goes on, it has been no different for pellet manufacturers. In October, Pellet Mill Magazine conducted a survey to gain some perspective on what kind of cost increases domestic producers have experienced over the past 18 months. Respondents included 10 production facilities representing different companies located across the U.S, in all regions. The results are as follows. Some questions have been condensed for easier reading.

10%

20%

30%

40%

50%

60%

tween 10 and 20%. Zero respondents saw an increase of less than 10%. For context, a 40,000-ton facility using approximately 2 million residential bags annually, at a cost of 22 cents per bag, equates to $440,000 in bag costs. A 20% price increase would result in an additional annual expenditure of $88,000 for bags alone.

QUESTION 2. During the past 18 months, how much have labor costs increased at your operation? As in nearly every industry, labor shortages have been a thorn in the side of many pellet manufacturers, though it appears to be a case-by-case basis. The majority of respondents—nearly 56%—said QUESTION 1. During the past 18 months, how much of an labor costs have risen 10 to 20%. However, 33% reported little or no increase in the price of packaging have you experienced? increase at 0 to 5%, and 11% said between 5 and 10%. As a follow Approximately 67% of respondents reported an increase of up question, respondents were asked whether they operate with the greater than 20%, with the remaining 33% indicating an uptick be- same, fewer or more employees as compared to prior to the pan12 PELLET MILL MAGAZINE | ISSUE 4 2021

Producer Price index by Industry: Wood Container and Pallet Manufacturing: Wood Pallets and Pallet Containers, Wood and Metal Combination

220

Index Dec 2003=100

210 200 190 180 170 160 150

Oct 2020

Nov 2020

Dec 2020

Jan 2021

Feb 2021

Mar 2021

Apr 2021

May 2021

Jun 2021

Jul 2021

Source: U.S. Bureau of Labor Statistics

demic. Respondents were split at just above 40% for both less and the same, with the remaining 11% reporting more. More employees may seem encouraging; however, one respondent’s remarks indicated lack of skill being the primary reason. “We actually have more employees, but less experience and less efficiency because of the ability to retain and hire experienced help,” they said. The majority of respondents who reported a smaller workforce—nearly 67%—said the inability to hire and retain employees was the reason, with higher labor costs coming in at about 17%. QUESTION 3. In the past 18 months, how much an increase in the price of pallets have you experienced? Respondents experienced a variety of percentage increases, with roughly 33% reporting an increase of greater than 40%. It was an even split for the remaining three price ranges, with about 22% of respondents choosing between 30 and 40%, 22% between 20 and 30%, as well as 22% for between 10 and 20%. A likely ripple effect of rocketing lumber prices, the price of wood pallets began a steady climb in January, according to U.S. Bureau of Labor Statistics data (Figure 1), reaching what appears to be a peak in July. Prices fell in August and September, with October data not yet available at press time. With lumber prices having come down this summer, it appears likely that pallet prices may also continue their descent. QUESTION 4. During the past 18 months, has the cost of fiber increased, decreased or remained stable? Well over half of respondents—nearly 56%—said fiber costs haven’t changed. Approximately 22% reported modest increases but subsequent stabilizing, and 11% reported decreases in fiber costs. The U.S. EIA Monthly Densified Biomass Fuel Report tracks fiber consumption and costs, with the July report (released in October) not suggesting any significant

Aug 2021

Sept 2021

fred.stlouisfed.org

Q2 (Follow up) As compared to prior to the pandemic, do you operate with: Less employees

The same number of...

More employees 0%

10%

20%

30%

40%

50%

60%

price variations. Residual categories, however, varied substantially from 2020 to 2021. For example, in July 2020, producers reported using approximately 432,000 tons of wood product manufacturing residue. In July 2021, that number sunk to about 90,500 tons. At the same time, the “other residuals” category jumped from 514,000 in 2020 to 703,500 in 2021, sawmill residue use increased from about 248,000 tons in 2020 to 457,000 tons in 2021, and roundwood rose from 172,000 tons to 198,000 tons. QUESTION 5. During past 18 months, how much have grease prices increased? Most respondents reported modest increases, with just under 78% reporting between 5 and 10%. The remaining 22% of respondents were an even split between 10 and 20% and greater than 25%. Many factors come into play with increased lubricant costs, and include rising base-oil and additive prices, the cost of packaging including WWW.BIOMASSMAGAZINE.COM/PELLET 13

« Operations

Q4 In the past 18 months, has the cost of fiber: Remained stable

pails, drums, pallets and freight. One grease/ lubricant manufacturer told Pellet Mill Magazine there was a price increase with almost every Increase a little step in the value chain of producing companies. “Lubricants are no exception, due to Increased considerably globally increased prices for fuel, chaos at harbors and resulting delays, as well as shortages of raw materials,” the company executive said. Gone up, but stabalized “We feel the pressure, especially with ingredients for our food grade lubricants and risen loDecreased gistic costs. However, we have kept our prices stable so far, and did not raise prices for most 0% 10% 20% 30% 40% 50% 60% 70% of our customers. When thinking a bit further back than 18 months, especially large lubricant A late October report, “Driver Short- 2020; a high average age of current drivcompanies benefitted from very low base oil age Update 2021,” conducted by the Amer- ers and retirements; federally mandated prices in 2019 and 2020.” ican Trucking Association, estimated that minimum age of 21 to drive commercially in 2021, the national truck driver shortage across state lines; barriers to entry such QUESTION 6. Has availability of will hit a history high of more than 80,000 as inability to meet hiring standards, and trucking affected your operation? Approximately 44% of respondents said drivers and could surpass 160,000 by 2030. more. The report notes that driver pay and trucking is, and continues to, affect their op- A multitude of factors are playing a role, according to the report, which include, but earnings have risen substantially, but some eration. Another 44% said it has not, and 11% are not limited to, the pandemic causing drivers choose to work less at the higher answered that it had at one point, but was no some drivers to leave the industry; truck pay rate, negating the impact of the inlonger. driver schools trained far fewer drivers in crease.

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Q5 During the past 18 months, how much of an increase in the price of grease have you seen? QUESTION 7. How often are you making price adjustments? None In the Wild West of commodity prices, product price adjustments are perhaps being made more frequently than ever for some op5-10% erations. While about 33% of respondents have continued to make annual adjustments, most respondents are evaluating and making changes every three to four months. While average per- 10-20% ton prices were about six dollars less in July 2021 than in July 2020—$162.50 compared to $168.75 (per U.S. EIA data), the difference from 20-25% January 2020 to January 2021 was more substantial at about $15 more per ton—from $173.27 to $188.60, respectively. Data beyond July 2021 +25% was not available at press time. Finally, one question surveyees were not asked but was addressed by one respondent, 0% 10% 20% 30% 40% 50% 60% 70% 80% was related to the challenges of insurance. They While pandemic has brought on a creasingly be seeking stable, cost-effective remarked, “All of our operational costs, other than fiber, are up significantly. Our plant insur- series of challenges, the industry could alternatives. ance premium went from $85,000 annually to be poised to have a strong season if the Author: Anna Simet over $350,000 ... only a handful of carriers are weather cooperates. With fossil heating fuEditor, Pellet Mill Magazine willing to even consider insuring wood products els projected to increase the cost of home asimet@bbiinternational.com ai161942375016_IMALPALGroup_PelletMill_2021_May-Jun.pdf 1 26/04/2021 09:55:55 exponentially, consumers may inheating manufacturers.” 701-738-4961

« Markets

Assessing the Global Supply Landscape Hawkins Wright weighs in on what might be in store for the broader wood pellet industry.

BY ANNA SIMET

he long 2020-’21 heating season, higher energy prices, pandemic implications and policy will all play a role in what is expected to be a tight biomass market for the duration of the impending winter. That’s according to global consulting firm Hawkins Wright, which in mid-October conducted a webinar to discuss biomass market trends and implications, and what might be in store for industry stakeholders. To begin, Rachael Levinson, Hawkins Wright Biomass Research Manager, discussed spot market prices and the company’s monthly report on developments in the wood chip and pellet markets. Spot Prices The Forest Energy Monitor publishes a range of biomass prices on a monthly basis, including estimates of industrial European spot pellet prices. Numbers are based on information provided from a range of contacts, brokers, trades, utilities and producers, Levinson says. “We don’t just plug numbers into a spreadsheet. The industrial wood pellet market is still relatively illiquid compared to other commodities, so we find it’s important that we use our own years of experience, and those of our contacts to establish what’s really happening in the market, and ensure that price represents the spot market at that time.” Heating pellet prices are based on data from local trade associations and a range of wood fiber prices from a number of the company’s sources. “It has been being quite an interesting year, we’ve seen a huge shift in the market

from the oversupply we saw in 2020 to right now, a period of tightening in Europe’s spot market, which has rapidly raised prices,” she says. “One of the major reasons for that shift in the market was that the 2020’21 winter was a lot longer than in previous years—the low temperatures lasted later into spring than usual, and that helped extend the operating period for some of the industrial heating plants.” In addition, this past spring saw a surge in European power prices, and some utilities are positioned to benefit. For example, Orsted A/S based in Denmark. “Orsted operates several combined-heat-and-power (CHP) plants and sells heat to local district heating networks, and the power they produce is almost a byproduct of the heat sales,” Levinson explains. In spring 2021, we saw these increased power prices in Europe, and some of the more efficient CHP plants could profit primarily on power sales rather than heat sales. That further extended their operating period, and of course, increased their pellet demand.” The unexpected flurry of spring spot activity cleared out much the pellet stocks that resulted from the oversupply of 2020, and it continued during the summer months when activity normally dies down. There are two reasons for that, Levinson says. “That activity prompted a lot of other European utilities to think ahead to this coming winter, expecting demand to pick up quite a bit, so some started preparing early to ensure they were well covered going into this winter ... those high power prices in Europe, in combination with the bullish sentiment in

16 PELLET MILL MAGAZINE | ISSUE 4 2021

the wider energy complex—higher carbon prices and higher coal and gas prices—really increased profitability for many of the power-producing wood pellet users in Europe. Demand for pellets was strong throughout the summer, as they were operating as much as they could outside of any planned maintenance.” As winter approaches, demand is expected to pick up considerably, with many plants returning to service in the next several weeks. Levinson again referenced Orsted, which has already brought its Avedore unit back online from its usual summer maintenance, with the second unit expected to return to service in November. “Also, Drax has had an extended, planned outage at one of its units since August, and that will be back online in November.”

MGT Power, the new U.K. power plant that industry has been waiting to commence operations for a couple of years, is expected to begin operations in the next month or two. “Of course, wood pellet consumption will [initially] be low, but we do expect it to ramp up over the winter period, and that will help lift demand significantly,” Levinson says. As for the supply side of the market, there have not been too many hindrances, she says, other than some wild fires in British Columbia during the summer, and a hurricane in the U.S. South, both of which delayed some shipments but did not have a material effect on the spot market. The most concerning issue at present is the spot market and very low stocks going into the winter, Levinson reiterates. “The last time the spot market in Europe was really tested like this

was the 2018-’19 winter, but the situation now is fairly different, so I’m not sure we can draw too many conclusions from what happened then—this time around we don’t have the supply issues that we did ahead of that winter,” she says. “Also slightly different is the high-paying capabilities of some European utilities right now, meaning the price that utilities can pay for the wood pellets and still be profitable. Because power and carbon prices are very high at the moment, that means paying capabilities are at levels that we’ve never seen before, so it will certainly be an interesting winter.” Moving onto the European residential market, the tightening in the industrial market is being mirrored in the residential market. Levinson said just this year has seen huge boiler sales in countries including France,

Austria and Germany, a trend that will inevitably increase wood pellet demand this winter. “In addition, high fossil fuel prices will lift demand in some countries—for example, in Italy, a lot of the users there have wood pellet stoves as well as a gas or oil heating system,” she says. “If fossil prices are high, those homeowners are more likely to rely more on their pellet stoves for heat than in years during which gas and oil were relatively low-priced. We do have very low stocks for this time of year going into this winter, so if it comes early or is particularly cold or long, that could come as quite a shock to the market.” Meanwhile across the world, Asian spot prices have shown quite a bit of recovery this year, Levinson says. “The Asian market had a few more supply issues than we’ve experienced in the European market—for example, in Vietnam, the lockdown impacted furniture production, which is a major source of fiber for pellet producers there, and high freight prices and container shortages have added to producers’ problems.” In the past couple of months, there have been more tenders from state-owned power generation companies (GENCOs), including tenders seeking 315,000 metric tons of domestic and imported pellets for delivery by the end of the year, a tight deadline that Levinson says will really test the market. “This winter is certainly going to be interesting—it’s something to keep an eye on,” she says. Following Levinson, Fiona Matthews, Hawkins Wright associate director of bioenergy, discussed trends in the wider global energy markets that have implications on the biomass market, beginning with the natural gas market. Other Market Trends, Influences “Recently in the U.K., gas price surges and supply issues have been in headlines—in September, the tightness in the global gas market led to a rise by 29% month on month, to around 56 euros per megawatt-hour,” Matthew says. “Drivers are pretty complex, with a key one

WWW.BIOMASSMAGAZINE.COM/PELLET 17

« Markets

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being the postcovid rebound, with stronger economic activity driving higher gas demand. European consumption is the highest it has been in five Levinson years, but demand is also very high in Asia.” The European market has struggled to compete with Asia for LNG cargoes, Matthews continues. “Politics is a factor—it’s clear that Russia has been exerting its power, and Putin has been toying with flows of gas into European gas market. Russia is also rebuilding its own inventories ahead of the upcoming winter season. Low inventories and high prices of LNG have limited the volumes that can been injected into storage. The consequence for the biomass market is the resulting surge of power prices that follow, from the gas price rise. Higher power prices have significantly improved the profitability of biomass power plants.” Matthews also pointed out the attention higher gas prices have brought to decarbonization and the need to rely on other technologies beyond natural gas to provide grid stability and grid balancing services. “Recent events have very much helped the case of large-scale bioenergy carbon capture and storage projects (BECCS), such as the one being developed by Drax.” Drax Power Station, located in North Yorkshire, uses wood pellets for fuel in four of its six units. A pilot BECCS project began operations at the site in 2019, with a second demonstration unit installed in 2020. Fiber costs have major influence on pellet producer profitability, Matthew says, and there are a range of issues that may have an impact. As mentioned by Levinson, in August, the Forest Energy Monitor evaluated COVID-19 lockdowns in Vietnam and its implications on furniture production. “Waste is the main source of raw material for pellet producers in Vietnam, which can have a huge impact on the pellet market in Asia,” she says. “Chip availability in Latvia is important to chip-fired boilers in the Baltics

18 PELLET MILL MAGAZINE | ISSUE 4 2021

and pellet producers in the region, and in 2020, we experienced a period oversupply of chips in the Baltics region and across Europe. This was largely due to the Matthews excess of bark beetle-damaged wood in the markets. In 2021, we started to see a slight tightening of this market, which is starting to shift for a number of reasons.” One of those reasons is harvesting rates in the Baltics, mostly drive by highvalue saw log demand. “Any sort of dip in demand for saw log shave has an impact on harvesting rates in the region,” she says. “The longer, colder, wetter conditions that we experienced this past winter was actually detrimental to the bark beetle and reduced the number of reproductive life cycles, so we’re seeing that infestation levels are not as high, and less damaged wood is in the market.” Another point Matthews makes is the reduced supply of wood chips from Belarus to Latvia, the result of some regulation changes. “Latvia introduced radiation testing for wood products and Belarus introduced an export tax on wood products, and both reduced the flow of chips from Belarus to Latvia,” she says. “The political situation in Belarus and the introduction of EU sanctions has persuaded many chip buyers in Europe to look elsewhere, scared off a bit from buying from Belarus, which has had an impact on that flow.” As the European economy begins to recover from the pandemic, there is more demand for chips from competing industries such as panel board manufacturers, which has an impact on energy chip buyers. Finally, Moving on, Matthews discussed the interplay between biomass energy fiber supply and other forest product industries, such as sustainable aviation fuel (SAF). “The U.S. has proposed an SAF target of 3 billion gallons by 2030, and currently produces around 45 million gallons,” she says. “This is a significant uplift in pro-

SOURCE: HAWKINS WRIGHT

duction ... it is much more costly to produce than fossil jet fuel, and so the federal government has said it will provide funding to meet targets, and has introduced a new tax credit for SAF.” While most SAF is produced using waste and vegetable oils, animal fats, and more recently, MSW, other feedstocks will be neededPellet_Mill_Issue_3_2021.pdf if industry is going1 to scale12:55:33 up toPM 7/7/2021 displace a noteworthy percentage of fossil

1 million tons of chips and roundwood, and has a goal to come online in 2025. Other companies operating in this field, including Lanzajet and Nova Pangaea in the U.K., both of which plan to produce SAF from waste wood.” The EU has proposed an SAF mandate of 2% aviation fuel in 2025, increasing to 5% in 2030, 32% in 2040 and 63% in 2025 with additional subtargets in other categories, Matthews adds. “Based on forecasted demand of the mandate, it would mean 1 million (metric) tons of SAF in 2005, 3.5 million in 2030 and 30 million in 2050. This potential scale makes it so interesting as a competijet fuel, according to Matthews. “As a result, tor for some feedstocks of biomass.” there is growing interest in producing SAF from woody biomass, and this is the angle relevant to wider biomass industry—the Author: Anna Simet Editor, Pellet Mill Magazine prospect of having to compete with another asimet@bbiinternational.com user of some types of wood feedstocks in 701-738-4961 certain regions,” she says. “There are few projects of interest, including Velocys’s SAF biorefinery in Mississippi, not too far from Drax’s pellet mill, which would require about

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Fragments of failure at a major pellet plant breakdown. PHOTO: JÖRG LANGENHUYSEN

Consequences of Load Strategy

Fatigue is a slow, often undetected damaging process of material under iterating mechanical loads, temperatures and other impacts.

utages happen frequently in wood pelleting, and the reasons are manifold. Depending on the production strategy, pellet producers can increase the production rate—even above nameplate capacity of the pellet mill—or prolong maintenance intervals with a low wear strategy. Some Canadian pellet mill plants operate their 3.5-ton-per-hour pellet mills at a production rate of approximately 5 tons per hour. The result is a production volume matching the nameplate capacity of the pellet plant, but also planned, biweekly, 12-hour downtimes for maintenance, as well as a shell service life of sometimes only a few hundred operating hours. Another extreme is a Swiss wood pellet plant with bearings service life of 10,000 operating hours and close to zero

BY HOLGER STREETZ unplanned downtimes. The shell service life is approximately 1,000 operating hours. Many factors influence the production rate and service life of equipment, beginning with the initial raw material. Clean, homogenous softwood fiber is the ideal raw material for a long shell service life and high production rates. The load on the rollers is low and the throughput high, due to the soft fiber. Depending on the sourcing area, however, a mix with hardwood, recovered industrial wood or storm debris changes the raw material mix. Besides the tree species, bark and dirt have a huge effect. In the growth phase of a tree, the bark absorbs particles from the ground, such as stones, sand and soil. In some cases, the forests are contaminated with metal scrap that ends up in the woody biomass. Bike parts,

brass, cans and drums are some common contaminants. The first step in wood preparation for pellet production is often the wet hammermill, followed by the dryer. Worn hammers and sifters, weak magnets and an uneven material distribution in the dryer cause uneven prepared material for the dry hammermill and the mixer. With new approaches to drying, such as steam explosion, costs decrease significantly, while the quality of the material mix improves. The efficiency of pelletization is highly dependent on the preceding steps. A pellet mill’s spare part service life, production rate and power consumption are influenced by the material mix and preparation. The downstream processes in wood pelleting are affected by pellet quality. Density, moisture, length and bonding

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

20 PELLET MILL MAGAZINE | ISSUE 4 2021

Maintenance & Repair »

A breakdown due to fatigue—the pellet mill door turned upside down as a result of a broken flange and die. PHOTO: JÖRG LANGENHUYSEN

influence fines in the bagging process or bulk handling. There are ways to improve overall performance with the help of third parties. An original equipment manufacturer (OEM) independent pellet plant audit overcomes blindness to operational flaws and can assist with new ideas, innovation and to provide plant management with some food for thought. A Door Upside Down Sometimes, even the best advice is wasted, as breakdowns are not always related to

raw material, production rate, maintenance and operations. The wood pellet industry is used to all kinds of breakdowns—roller bearings break due to shocks, dirt, wear or lack of lubrication; main bearings corrode or absorb too many shocks and break; roller shells wear off and crack due to the material mix and load. Additionally, shells cause trouble when the measurements are offspec. Even dies break from time to time, often causing longer outages. All these are glitches, as mending is often brief. But nowadays, disrupted supply chains affect delivery times, and thus, downtimes. Some breakdowns are less frequent, but they cause much bigger damages. One example is a major breakdown that occurred at an Austrian wood pellet plant—the flange broke due to fatigue. As a result, the die was unguided and also broke. With the broken flange and die, the pellet mill door turned upside down. The mixer, lifting equipment, door and door clamp were also damaged beyond repair due to the movement of the door. The motor went into overload and shut off. The shear pins were also intact, as the broken flange was rotating freely. Luckily, there was no one injured. The pellet mill had just underwent service shortly before the malfunction. This underlines the lack of traceability of material fatigue. The wood pellet producer is facing a damage of approximately 68,000

euros (nearly $70,000) in parts, plus installation. The company decided to replace the pellet mill. Main Bearing Breakdown Main bearings rarely break. When they do, it is often due to corrosion, massive shocks or dirt particle entry. There has been a case of main bearing failures due to interrupted production in a U.S.-based wood pellet plant. The available raw material was not sufficient for the continuous operation of all pellet mills. As a result, a different pellet mill was shut off every two weeks. Condensed water entered the main bearing and caused corrosion, finally leading to a bearing failure with all pellet mills. Coming back to the initial operation decision, a plant manager can either decide to increase production rate and accept a higher degree of wear on the equipment, or go easy on the equipment and improve maintenance. A high load strategy requires more frequent planned maintenance days, whereas a low load strategy requires good planning, special care and experienced workforce. Neither of the strategies will prevent fatigue, and nor is one strategy more likely to cause major malfunctions when willingly chosen and consequences accepted. Author: Holger Streetz COO and Board Member, Bathan AG h.streetz@bathan.ch

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« Technology

Bulk material unloading from a transfer chute onto a fast-moving belt can shift the flow of material in the chute, resulting in off-center loading. PHOTO: MARTIN ENGINEERING

Conveyor Technology: Designing for the Future by Innovating the Present Bulk handling is evolving when it comes to safety, efficiency and automation.

BY TODD SWINDERMAN

igher production demands across all bulk handling segments require increased efficiency at the lowest cost of operation, in the safest and most effective manner possible. As conveyor systems become wider, faster and longer, more energy output and more controlled throughput will be needed. Add an increasingly stringent regulatory environment, and cost-conscious plant managers must closely review which new equipment and design options align with their long-term goals for the best return on investment. Safety at Higher Belt Speeds Safety is likely to become a new source of cost reduction. The percentage of pro-

cessing facilities with a robust safety culture are likely to increase over the next 30 years to the point where it is the norm, not the exception. In most cases, with only a marginal adjustment to the belt speed, operators quickly discover unanticipated problems in existing equipment and workplace safety. These problems are commonly indicated by the larger volume of spillage, increased dust emissions, belt misalignment and more frequent equipment wear and failures. Higher volumes of cargo on the belt can produce more spillage and fugitive material around the system, which can pose a tripping hazard. According to the U.S. Occupational Safety and Health Administration, slips, trips and falls account for 15% of all workplace deaths and 25% of all workplace

injury claims. Moreover, higher belt speeds make pinch and sheer points in the conveyor more deadly, as reaction times are drastically reduced when a worker gets clothing, a tool or a limb caught from incidental contact. The faster the belt, the quicker the belt wanders and the harder it is for a belt tracker to compensate, leading to spillage along the entire belt path. Caused by uncentered cargo, seized idlers or other reasons, the belt can rapidly come in contact with the mainframe, shredding the edge and potentially causing a friction fire. Beyond workplace safety consequences, the belt can convey a fire throughout the facility at extremely high speed. Another workplace hazard—one that is becoming progressively more regulated—is dust emissions. An increase in the volume of cargo means greater weight at higher belt speeds, causing more vibration on the system and leading to reduced air quality from dust. In addition, cleaning blade efficiency declines as volumes rise, causing more fugitive emissions during the belt’s return. Abrasive particulates can foul rolling components and cause them to seize, raising the possibility of a friction fire and increasing maintenance costs and downtime. Further, lower air quality can result in fines and forced stoppages by inspectors. Modern Chute Design Wider and faster conveyors are being deployed to drive down the per-ton cost of conveyed material. Traditional troughed designs will likely remain a standard, but the push toward wider and higher-speed belts will require substantial development in more reliable components, such as idlers, impact beds and chutes. A major issue with most standard chute designs is that they are not engineered to manage escalating production demands. Bulk material unloading from a transfer chute onto a fastmoving belt can shift the flow of material in the chute, resulting in off-center loading, increasing fugitive material spillage and emitting dust well after leaving the settling zone. The result of off-center loading is mistracking and spillage around the system and walkways. Newer transfer chute designs aid in centering material onto the belt in a well-sealed environment that maximizes throughput, limits spillage, reduces fugitive dust and minimizes

22 PELLET MILL MAGAZINE | ISSUE 4 2021

common workplace injury hazards. Rather than material falling with high impact directly onto the belt, the cargo’s descent is controlled to promote belt health and extend the life of the impact bed and idlers by limiting the force of the cargo at the loading zone. Reduced turbulence is easier on the wear liner and skirting, and lowers the chance of fugitive material being caught between the skirt and belt, which can cause friction damage and belt fraying. Longer and taller than previous designs, modular stilling zones allow cargo time to settle, providing more space and time for air to slow down, so dust settles more completely. Modular designs easily accommodate future capacity modifications. An external wear liner can be changed from outside of the chute, rather than requiring dangerous chute entry as in previous designs. Chute covers with internal dust curtains control airflow down the length of the chute, allowing dust to agglomerate on the curtains and eventually fall back onto the belt in larger clumps. And dual skirt sealing systems have a primary and secondary sealing strip in a two-sided elastomer strip that helps prevent spillage and dust from escaping from the sides of the chute.

ing carryback. For the heaviest applications, one primary cleaner design features a matrix of tungsten carbide scrapers installed diagonally to form a 3-dimensional curve around the head pulley. Field service has determined that it typically delivers up to four times the service life of urethane primary cleaners, without ever needing retensioning. Taking belt cleaner technology into the future, an automated system increases blade life and belt health by removing blade contact with the belt any time the conveyor is running empty. Additionally, it reduces labor for the constant monitoring and tensioning of blades to ensure peak performance. Connected to a compressed air system, pneumatic tensioners are equipped with sensors that detect when the belt no longer has cargo and automatically backs the blade away, minimizing unnecessary wear to both the belt and cleaner. The result is consistently correct blade tension, reliable cleaning performance and longer blade life, all managed without operator intervention.

Bulk Handling, Safety and Automation in the Future Automation is the way of the future, but as experienced maintenance personnel retire, younger workers entering the market will face unique challenges, with safety and maintenance skills becoming more sophisticated and essential. While still requiring basic mechanical knowledge, new maintenance personnel will also need more advanced technical understanding. This division of work requirements will make it difficult to find people with multiple skill sets, driving operators to outsource some specialized services and making maintenance contracts more common. Ultimately, conveyor monitoring tied to safety and predictive maintenance will become increasingly reliable and widespread, allowing conveyors to autonomously operate and predict maintenance needs. Author: Todd Swinderman CEO Emeritus, Martin Engineering info@martin-eng.com www.martin-eng.com

Rethinking Belt Cleaning Faster belt speeds can also cause higher operating temperatures and increased degradation of cleaner blades. Larger volumes of cargo approaching at a high velocity hit primary blades with greater force, causing some designs to wear quickly, leading to more carryback and increased spillage and dust. In attempt to compensate for lower equipment life, manufacturers may reduce the cost of belt cleaners, but this is an unsustainable solution that doesn’t eliminate the additional downtime associated with cleaner servicing and regular blade changes. As some blade manufacturers struggle to keep up with changing production demands, industry leaders in conveyor solutions have reinvented the cleaner industry by offering heavy-duty, engineered polyurethane blades made to order and cut on-site to ensure the freshest and longest-lasting product. Using a twist, spring or pneumatic tensioner, the primary cleaners are forgiving to the belt and splice but are still highly effective for dislodgWWW.BIOMASSMAGAZINE.COM/PELLET 23

« Policy

A Rational, Pragmatic Off-Ramp to Decarbonization Using sustainably sourced wood pellet fuel in place of coal is an essential part of the low-carbon energy transition.

ood pellet fuel produced from perpetually renewing sources is, and will be in the future, an essential component in the transition to a decarbonized future. This article primarily focuses on the power generation sector, but the role of pellet fuel in the heating markets should not be ignored. As Figure 1 shows, the heating pellet markets were larger than the industrial pellet markets until 2018. The use of pellet fuel for heating will continue to grow in many jurisdictions as coal, heating oil and eventually natural gas become disallowed carbon-emitting energy sources. But the wood pellet industry has sustainability boundaries that cannot be crossed. If it is to be recognized as a renewable energy source, it has to renew. Decarbonizing the Power Sector A pragmatic policy for lowering the CO2 intensity of the power generation sector with a transition to renewable energy must be tempered with the need to maintain reliability and stability in the delivery of electricity. Moving to increased renewable generation is more complicated than simply building lots of wind turbines and solar farms. But that is often the offered solution, with a reference to solving the intermittency and variability of wind and solar with battery or hydrogen storage. The future for power generation relying heavily on electricity generated from wind turbines and solar farms is a worthy goal that should define the destination. But deploying more wind turbines and solar farms will require massive energy storage at a scale that is orders of magnitude from where we are today. Grid-level energy storage sufficient to support the reliable supply of electricity in a decarbonized power sector without on-demand, so-called thermal generation is at least decades away. The transition to that goal will

BY WILLIAM STRAUSS

Figure 1

take a long time and require continued improvements in storage technology and density, and massive investments in capacity. A cornerstone strategy for maintaining grid reliability and on-demand, load-following, frequency-stabilizing generation during this long transition from where we are today to a generation portfolio that may not be dependent on the combustion of fuel is to do what is already being done in many nations. And that is using sustainably produced wood pellet fuel produced from renewing working forests to replace coal in utility power boilers. Figure 2 shows a recent week’s generation mix in the United Kingdom. Note that the power produced in four 650-MW units at the Drax power station and the 420-MW Lynemouth station, which were converted to use 100% pellet fuel, satisfied nearly 9% of the total U.K. demand. Where the arrow is pointing, solar was not generating (nighttime) and there was very little wind. During that period, the Drax and Lynemouth stations produced nearly 14% of all the electricity used in the U.K., with carbon emissions nearly 90% lower than

what would have been produced from coal. Using solid pellet fuel made from sustainable sources of woody biomass is not a novel idea. In 2021, about 23 million metric tons of industrial pellet fuel will be used as a highly carbon-beneficial substitute for coal in power generation. The strategy is proven as effective and economical in several nations. It is deployable now in existing coal-fueled power stations. There is no need to invest in new generation infrastructure, new interconnection infrastructure, or wait for continued improvements in energy storage capacity, efficiency and density. To be carbon beneficial, sustainability must be the foundation of the industrial pellet fuel sector. When it comes to management of the sources of woody biomass, there are sustainability boundaries that cannot be crossed. The foundational and absolutely necessary condition is that the net stock of carbon held in the forest landscape cannot be depleted by the harvesting rate exceeding the growth rate, by deforestation or improper land use change.

24 PELLET MILL MAGAZINE | ISSUE 4 2021

Figure2

“Working forests” is a term for those that are managed and grown to produce the raw materials for many industries. The primary industries are lumber and other building materials, furniture, flooring, paper, packaging and tissue. The production of these commodities and the management of the working forests for optimal productivity produces byproducts that are used in pellet manufacturing. Proving that the feedstock sources are sustainable, and thus, that the net carbon stocks in the forests are not being depleted, is the foundation of policy and rules in nations that use pellet fuel in place of coal for power generation, and is a simple but necessary condition. The Role of Policy Policy can protect the forest resources and their carbon stocks, supporting the energy transition to a decarbonized future. Strategies dependent on a constant supply of pellet fuel cannot be allowed to result in the depletion of forests. But neither can misinformation be allowed to bias policymaking. The harvest of a single mature or highgraded stand within a large, managed forest may allow for an emotionally compelling and narrowly focused photo implying that the forest is being wantonly destroyed. But that viewpoint is not supported by basic business sense. And it is not supported by the well-established and well-respected rigorous independent auditing that is necessary if the industrial wood pellet producers want to sell their 23 million metric tons of pellet fuel in 2021 into their markets. And it is also not supported by data showing that managed work-

ing forests have increasing stocks of sequestered carbon. If the goal of policy is to transition to a future in which CO2 emissions are eliminated, then a key near- and medium-term component in that strategic, offramp plan should

be to support the replacement of coal with highly carbon-beneficial pellet fuel. The strategy is elevated by carbon capture and storage combined with bioenergy (BECCS) from pellet fuel, which opens a pathway to significant negative CO2 emissions while simultaneously generating the baseload or load-following power needed to compensate for the intermittency and variability of wind and solar power. BECCS also gives long and valuable life to coal power stations if they are converted to use pellet fuel, and subtracts CO2 from the atmosphere. The only pathway to negative carbon emissions while producing electricity at utility scale is by replacing coal with pellet fuel and deploying BECCS. A rational, pragmatic and environmentally responsible strategy should ensure that the final regulations are supportive of the essential role that sustainably produced industrial wood pellets play on the off-ramp to a decarbonized future.

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

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International Biomass Conference & Expo Erin P.B. a Z sada

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26 PELLET MILL MAGAZINE | ISSUE 4 2021

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2021 Pellet Mill Magazine Issue 4

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