2016 March Biomass Magazine

Page 1

March 2016

ROUNDING OUT Construction Nears Finish at Blue Sphere AD Plants Page 28

Plus: Ethanol Plant

RetroďŹ t Yields Renewable Chemicals Page 36

And:

School Adopts Unique Heat Contract Technique Page 22

www.biomassmagazine.com


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4 EDITOR’S NOTE Risk Abated

MARCH 2016 | VOLUME 10 | ISSUE 3

By Tim Portz

6 BUSINESS BRIEFS

POWER

38 MARKETPLACE

8 NEWS

9 COLUMN Senate Recognizes Biomass's Carbon Benefits By Bob Cleaves

10 FEATURE Building Big in British Columbia Veolia North America and Fengate Capital Management Ltd. are nearing completion of a pair of 40-MW biomass power plants. By Bruce Dorminey

22

PELLETS 14 NEWS

15 COLUMN Preventing Pellet Plant Failures By John Swaan

16 DEPARTMENT Pellet Capacity Shake Out The number of proposed and developing projects has dwindled considerably in the past year due to market challenges, as well as a lack of logistics and operational expertise. By Tim Portz

ON THE COVER:

28

Blue Sphere Corp. is nearing completion of its 5.2-MW, food waste-based anaerobic digestion project in Charlotte, North Carolina. Paralleling the plant's construction progress is a similar but smaller plant in Johnston, Rhode Island. PHOTO: AERO PHOTOS

ADVERTISER INDEX¦

THERMAL 20 NEWS

21 COLUMN Utilizing Urban Wood Waste By Meghan Martin

22 FEATURE The Ultimate Biomass Heating Package High Mowing School in Wilton, New Hampshire, has dropped fuel oil and is saving money through a full-service biomass heating package contract. By Ron Kotrba

18

2016 International Biomass Conference & Expo

17

2016 On-Site Energy Conference & Expo

12

AMANDUS KAHL GmbH & Co.

26 NEWS

Andritz Feed & Biofuel A/S

27 COLUMN Optimizing a Biogas Plant

6 14 2

ASGCO Astec, Inc.

39

D3 Max

25

ETA Florence Renewable Energies

7

Evergreen Engineering

13

Federation of New York Solid Waste Associations

34

Firefly AB

30

Hurst Boiler & Welding Co. Inc.

32

Iowa Economic Development Authority

8

KEITH Manufacturing Company

24

Northeast Biomass Heating Expo

40

PHG Energy

20

ProcessBarron

19

Siemens AG

5

Solid Waste Association of North America

26

Vecoplan LLC

33

Williams Crusher

31

Yargus Manufacturing, Inc.

BIOGAS

By Dominik Klaus

28 FEATURE Circling Opportunity After a milestone year, Blue Sphere Corp. continues to focus on the U.S. for new project development, and Europe for acquisitions. By Anna Simet

ADVANCED BIOFUELS & CHEMICALS 34 NEWS

35 COLUMN Supporting New Technology Well Worth the Effort By Matt Carr

36 DEPARTMENT From Ethanol to n-Butanol in the Land of 10,000 Lakes Green Biologics Inc. is transforming an ethanol facility into a green chemical manufacturing plant. By Katie Fletcher

MARCH 2016 | BIOMASS MAGAZINE 3


¦EDITOR’S NOTE

Risk Abated Officially, this issue of Biomass Magazine is dedicated to project development and plant construction, a theme we have returned to annually for many years. Unofficially, this issue outlines and celebrates project risk. New projects are the lifeblood of the biomass-to-energy industry, offering the single best opportunity to grow market share and TIM PORTZ VICE PRESIDENT OF CONTENT prove new technologies and business models & EXECUTIVE EDITOR tportz@bbiinternational.com in the field. They also bring with them risks of all kinds: market volatility risk, technology risk, feedstock risk and many others. To successfully develop a biomass project, usher it toward a groundbreaking and bring it online, these risks must be accounted for and mitigated to the greatest degree possible. Each project featured this month faced different risks, and the real takeaway from this issue are the inventive ways developers accounted for and protected themselves from them. While writing her page-36 story on the conversion of a Little Falls, Minnesota, corn ethanol plant to n-butanol production, Associate Editor Katie Fletcher learned that in addition to repurposing many of the working components of the facility, Green Biologics is taking great comfort in the familiarity that area corn producers already have with the plant. This relationship not only solidifies the feedstock picture once the plant is in production, but it has also generated project momentum, as many of these producers have come aboard as investors. Senior Editor Ron Kotrba’s page-22 feature, “The Ultimate Biomass Heating Package,” examines how new business models can be leveraged to mitigate risk—not so much for the developer, but for the customer. Biomass heating offered High Mowing School in Wilton, New Hampshire, an alternative to the fuel oil heat it was using, but the upfront capital costs were bottlenecking the project. School trustee Philip Brooks told Kotrba, “We felt that with global warming it was important for us to do that, but financially, it wasn’t possible.” Enter Xylogen, a joint venture between Froling Energy and Optimal Energy Solutions LLC, that, in return for a 20-year heat supply contract, financed and installed a new biomass boiler and district heat solution at the school. Risk is inherent in any energy project. Current market conditions certainly underscore that simple fact. This issue of Biomass Magazine asserts that this risk offers some real utility to the industry, and should be at least be accepted, if not embraced. Risk drives project developers to more carefully consider every aspect of a project, identify potential problems within it, and develop and deploy measures to protect against them whenever possible.

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

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

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

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

Subscriptions Biomass Magazine is free of charge to everyone with the exception of a shipping and handling charge of $49.95 for anyone outside the United States. To subscribe, visit www.BiomassMagazine.com or you can send your mailing address and payment (checks made out to BBI International) to Biomass Magazine Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. You can also fax a subscription form to 701-746-5367. Back Issues & Reprints Select back issues are available for $3.95 each, plus shipping. Article reprints are also available for a fee. For more information, contact us at 701-746-8385 or service@bbiinternational.com. Advertising Biomass Magazine provides a specific topic delivered to a highly targeted audience. We are committed to editorial excellence and high-quality print production. To find out more about Biomass Magazine advertising opportunities, please contact us at 701-746-8385 or service@bbiinternational.com. Letters to the Editor We welcome letters to the editor. Send to Biomass Magazine Letters to the Managing Editor, 308 2nd Ave. N., Suite 304, Grand Forks, ND 58203 or email to asimet@bbiinternational.com. Please include your name, address and phone number. Letters may be edited for clarity and/or space.

COPYRIGHT © 2016 by BBI International

Biomass Magazine: (USPS No. 5336) March 2016, Vol. 10, Issue 3. Biomass Magazine is published monthly by BBI International. Principal Office: 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. Periodicals Postage Paid at Grand Forks, North Dakota and additional mailing offices. POSTMASTER: Send address changes to Biomass Magazine/Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, North Dakota 58203. Please recycle this magazine and remove inserts or samples before recycling TM

4 BIOMASS MAGAZINE | MARCH 2016


INDUSTRY EVENTSÂŚ Global Pellet Market Outlook Summit APRIL 11, 2016

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

On-Site Energy Conference & Expo APRIL 11-13, 2016

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Charlotte Convention Center Charlotte, North Carolina Organized by BBI International and produced by On-Site Energy Management magazine, this event will bring together commercial, institutional and industrial energy professionals who are evaluating or already managing on-site power and thermal energy technologies. This three-day event will offer industry-leading content and networking opportunities for those engaged in on-site energy asset installation, operations and maintenance. 866-746-8385 | www.OnsiteEnergyExpo.com

International Biomass Conference & Expo APRIL 11-14, 2016

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

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

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

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MARCH 2016 | BIOMASS MAGAZINE 5 30


Business Briefs PEOPLE, PRODUCTS & PARTNERSHIPS

AEBIOM elects new leadership, board members The European Biomass Association (AEBIOM) has announced Gustav Melin will serve as president for an Melin additional term, while Didzis Palejs will serve as vicepresident. Petar Curic of the Croatian Chamber of Economy, Vanja Curin of BABH, Martin Lindell of Sveaskog, Annalisa Paniz of AIEL, Ilias Papageorgiadis of ARBIO, Pablo Rodero of AVEBIOM, Hannes Tuohiniitty of Bioenergia, and Matthew Willey of Drax have been elected to the board of AEBIOM. In addition, the association has welcomed Finland-based Fortum and Austria-based Wild & Partner as new members. Laurel BioCompsite earns USDA Certified Biobased Product Label Laurel BioComposite LLC has earned the USDA Certified Biobased Product Label for its Bio-Res PLA with 97 percent biobased content, Bio-Res PE with 62 percent biobased content, and Bio-Res powder with 100 percent biobased content. The company first introduced the biomaterial in 2011 as a cost-effective, green replacement with improved performance properties for traditional petroleum-based resins in a variety of plastics manufacturing processes. The addition of Bio-Res powder to the USDA BioPreferred program expands the company’s product line-up and range of uses. Senate confirms director of DOE Office of Science Cherry Murray was confirmed by the U.S. Senate in December as director of the U.S. Department of Energy’s Office of Science. Murray Murray will oversee research in the areas of advanced scientific computing, basic energy sciences, biological and environmental sciences, fusion energy sciences, high-energy physics, and nuclear physics. She will have responsibility not only for supporting scientific research, but also for the development, construction, and operation of unique, open-access scientific user facilities. The Office of Science manages 10 of the department’s 17 national laboratories. Murray previously served as the Benjamin Peirce professor of technology 6 BIOMASS MAGAZINE | MARCH 2016

and public policy and professor of physics at Harvard University. Global green bank network formed A group of six green banks and two nonprofit groups recently announced plans to establish a Green Bank Network to help increase and accelerate investment in renewable energy and energy efficiency around the world. Green banks are public entities created to partner with the private sector to increase investment in clean energy and bring clean energy financing into the mainstream. The founding partners of the Green Bank Network include the U.K. Green Investment Bank, the Connecticut Green Bank, N.Y. Green Bank, the Japan-based Green Fund, Malaysian Green Energy Corp., and Australiabased Clean Energy Finance Corp. The National Resources Defense Council and Coalition for Green Capital have been appointed to spearhead creation of the network. ClimateWorks Foundation has agreed to provide seed funding. The Organization for Economic Co-operation and Development will use its convening power to facilitate the sharing of experience between green banks and countries interested in creating them, building on the OECD-Bloomberg Philanthropies green banks policy guide released in December. ACORE announces president, CEO The American Council on Renewable Energy has selected Gregory Wetstone as president and CEO. Wetstone most recently oversaw government affairs as vice president for TerraGen Power LLC. He also previously served as senior director for government and public affairs at the American Wind Energy Association, as director of programs at the Natural Resources Defense Council, and as counsel to the House Energy and Commerce Committee. Wetsone played an important role in crafting the 1990 Clean Air Act Amendments. Amyris adds board member Amyris Inc. has appointed Margaret H. Georgiadis, president of Americas at Google Inc., as a member of its board of directors. Prior to her current role, Georgiadis held seniorlevel positions at Groupon, Discover Financial Services, and McKinsey and Co. She has extensive experience and capabilities in technology, marketing, consumer sales, and business strategy and development.


BUSINESS BRIEFS¦

Medal of Technology and Innovation from President Barack Obama. Ho has focused her research on using recombinant DNA techniques to improve industrial microorganisms, particularly for production of renewable biofuels and bioproducts by using renewable cellulosic resources as the feedstocks. Her most noted work has been the development of recombinant Saccharomyces yeast that can effectively produce cellulosic ethanol from all types of cellulosic plant materials such as corn stalks, wheat straws, wood and grasses. The original Saccharomyces yeast used for producing ethanol from corn and other edible feedstocks cannot ferment cellulosic sugars to produce transportation fuel such as ethanol. She founded Green Tech America Inc. in 2006 AMPH secures funding Aggregated Micro Power Holdings plc at the Purdue Research Park to produce and recently confirmed that it has secured a second market the yeast and provide other services for round of funding for its biomass boiler port- cellulosic ethanol production. folio through Aggregated Micro Power Infrastructure Ltd., which has completed a capital Veolia acquires raise of £5.7million ($8.12 million), bringing Boomeco assets, business Veolia ES (UK) Ltd. has announced that the total invested by established institutions to it has completed the acquisition of the busi£12.4million. ness and assets of Boomeco Ltd., a waste wood processor and producer of refuse deDeinove awarded 6 patents Deinove has been granted six new pat- rived fuel (RDF). Based in Avonmouth, Brisents in the U.S. One, titled “Process for chro- tol, the Boomeco site processes a variety of mosomal engineering using a novel DNA grades of wood into wood chips to be used repair system,” Deinove’s founding patent, in combined-heat-and-power plants and prois already registered in Europe and describes duces RDF from residual household waste. the mechanism behind the biodiversity and resistance of Deinococcus bacteria, a major Velocys appoints CEO, discovery made by Miroslav Radman’s team nonexecutive director Velocys plc has announced the appointand which led to the launch of Deinove. The second, titled “Methods for isolating bacteria,” ment of David Pummell as CEO. With over protects a method for selecting and identifying 30 years of energy and oil industry experibacteria that has enabled the company to build ence, Pummell joins Velocys from ACAL a strain library with over 6,000 bacterial strains, Energy Ltd., a private equity-backed fuel cell all resistant to UV radiation. The company was technology company developing products for awarded four additional patents pertaining to the automotive and stationary power sectors, Deinococcus bacteria that are associated with where he was CEO. Velocys also announced producing biofuels as part of the Deinol pro- the appointment of Ross Allonby as a nongram. Deinove now holds a portfolio of 170 executive director. He has also been appointed as a member of the audit committee, remupatents internationally. neration committee and the nomination and governance committee. Allonby is a founder, Purdue researcher managing partner, CEO and chief informaNancy Ho recognized tion officer of First River Capital Partners Nancy Ho, founder LLP. He was formerly head of emerging marand president of Green kets credit trading at Bank of America Merrill Tech America Inc. and a reLynch. Prior to joining Merrill Lynch, he was a search professor emerita in director in the Capital Markets Group of StanPurdue University’s School dard Bank, London, and had previously been Ho of Chemical Engineering, a vice president at Goldman Sachs. has received the National Stora Enso opens Innovation Center Stora Enso recently inaugurated its Innovation Centre for biomaterials in Stockholm, Sweden. The center will host research, application, business development and strategic marketing. By creating renewable solutions and products from second-generation biomass, such as wood, in order to replace fossil-based products, the center is addressing societal problems such as climate change, increased urbanization, as well as water and land use issues. By the end of 2017, the center is expected to employ approximately 100 people. It covers 4,900 square meters, with a 1,600-square-meter, state-of-the-art laboratory.

MARCH 2016 | BIOMASS MAGAZINE 7


PowerNews Gross domestic jobs from RPS compliance Construction jobs

O&M jobs

Solar PV

135,600

1,200

Solar CSP

12,400

200

Wind

8,300

17,900

Biomass

8,300

3,300

Landfill gas

2,200

6,600

Geothermal

500

3,300

Hydropower

n/a

800

SOURCE: NATIONAL RENEWABLE ENERGY LABORATORY

Study quantifies value of RPS programs

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Researchers at the U.S. Department of Energy’s National Renewable Energy Laboratory and Lawrence Berkeley Laboratory have released a study estimating the value of emissions reductions associated with state renewable portfolio standard (RPS) policies operating in 2013. The report notes that RPSrelated renewable capacity additions over the 2013-’14 period averaged nearly 5,600 MW per year. Biomass accounted for an estimated 220 MW of that volume, with landfill gas accounting for approximately 85 MW.

Czech utility buys Lynemouth project In January, RWE Supply and Trading announced it has sold Lynemouth Power Ltd., the operator of the U.K.-based Lynemouth Power Station, to EP UK Investments Ltd., a subsidiary of Czech utility company Energetický a prumyslový holding. The coal-fired station has been working with contractors to design a technical solution for a full conversion to biomass. On Dec. 22, the facility announced it had burned its last coal. Once the conversion is complete, the Lynemouth facility will have the capacity to generate 420

8 BIOMASS MAGAZINE | MARCH 2016

Biomass projects were found to be responsible for approximately 8,300 construction jobs and 3,300 operations and maintenance jobs. Landfill gas projects were estimated to create 2,200 construction jobs and 6,600 operations and maintenance jobs. Overall, RPS policies were estimated to support 200,000 renewable energy-related jobs and resulted in $2.2 billion in benefits from reduced greenhouse gas emissions, along with $5.2 billion in benefits from reductions in other air pollution.

MW of electricity from wood pellets. The U.K. government intends to support the project in the form of a premium paid on top of the market price of the electricity generated, known as a Contract for Difference. The project will receive aid until 2027 and, according to U.K. estimates, will generate about 2.3 terawatt hours of low-carbon electricity per year. The plant is due to use approximately 1.5 million metric tons of wood pellets per year, mainly sourced from the U.S., Canada and Europe.


POWER¦

Senate Recognizes Biomass’s Carbon Benefits BY BOB CLEAVES

Some important and slightly unexpected developments occurred during the negotiations on the Senate Energy Bill. In the context of a lot of uncertainty around the role of biomass in the Clean Power Plan, the U.S. Senate used the Energy Bill to register resounding support for the carbon benefits of biomass. In a unanimous vote, the Senate agreed to an amendment to the 2016 Energy Policy Modernization Act, which recognizes the carbon neutrality of biomass when it comes from forested lands that haven’t been converted to another use. This is a remarkable bipartisan achievement, led by Maine Sens. Susan Collins and Angus King, along with Sen. Amy Klobuchar, D-Minnesota, and cosponsored by Sens. Al Franken, D-Minnesota, Kelly Ayotte, R-New Hampshire, Steve Daines, R-Montana; Mike Crapo, RIdaho; and James Risch, R-Idaho. During discussions that followed passage of the amendment, Sen. Ed Markey, D-Massachusetts, weighed in, submitting a statement for the record saying in part, “Biomass energy is already contributing to the U.S. energy mix in ways that help reduce carbon pollution that causes global warming.” This was largely a message of support for the industry, softening the senator’s previous positions on biomass. While he did not support the amendment, Sen. Markey positively cited biomass projects including plants in Gainesville, Florida, and Ft. Drum, New York, calling them “the type of project we need to encourage.” At press time, the Senate’s final Energy bill had not yet had its final vote, but was expected to pass. The Senate’s vote of confidence was much-needed and well-timed. The U.S. EPA announced in late January that it will hold its biomass workshop on April 7 in Washington, D.C. The workshop will explore how bio-

mass will fit into State Implementation Plans, and will take into account input from all types of stakeholders— industry, government and NGOs. The BPA, along with several other industry groups, is advocating for deference to current state policies. States already have in place sustainability standards, as well as procedures for tracking biomass feedstocks, and EPA does not need to create yet another standard for biomass facilities to meet. What we really need at this point is clarity; it’s been about five years since the EPA began its process to determine how to account for biomass emissions, and sometimes it seems that we haven’t gotten very far. In early February, the Business Council for Sustainable Energy released its annual report on sustainable energy in the U.S., highlighting how much policy can help—and hurt—a given industry. Since 2008, the wind industry has tripled in size, thanks in part to the doublesized production tax credit its producers are eligible for. Biomass, which is eligible for half the credit, has grown only 15 percent during that time. While significant growth would be welcome news for biomass, what we need now is solid help for existing facilities that are facing challenging market conditions. The bipartisan support we have built in the Senate, and in the U.S. House of Representatives with the Biomass Caucus, gives us hope that we can achieve this in the coming year. Author: Bob Cleaves President, Biomass Power Association bob@biomasspowerassociation.com www.biomasspowerassociation.com

MARCH 2016 | BIOMASS MAGAZINE 9


¦POWER

Building Big

in British Columbia Two firms with long histories of investment in alternative energy are partners in a Canadian biomass power venture. BY BRUCE DORMINEY

N

estled where the Nicola and Coldwater rivers join, Merritt, British Columbia, is the first major community along phase one of the Coquihalla Highway, which serves as a portal to all other major highways to the B.C. interior. Lying 450 miles southeast of Merritt is district municipality Fort St. James, which rests on the shore of Stuart Lake in the Omineca Country. Forestry is a leading economic contributor in each of these small communities, which are in the process of becoming homes to twin biomass power plants. Canadian investment fund Fengate Capital Management Ltd. and Veolia North America are in the latter stages of completing the two 40-MW power facilities, projects that could further interest in wood residues, roadside debris and sawmill waste as viable feedstocks. The pair of $235 million, biomass-fired electricity generation facilities will generate power for B.C. Hydro under 30-year power purchase agreements (PPA). The Fort St. James facility may become operational as soon as July, with the Merritt facility coming online by late this year. Upon completion, the two plants will be among the largest woody biomass energy plants in North America. Veolia will operate the facilities under a design, finance, build, operate and maintain contract, while also securing a steady supply of biomass for each of the plants, material that will be supplied by local partners. Each facility is expected to consume some 200,000 dry tons of biomass, mostly sawmill waste, and each generate more than 285,000 megawatt-hours to power more than 40,000 homes for a year. The projects were initiated after Veolia and Fengate won a public tender offer by B.C. Hydro for construction and operation of the two plants, along with a PPA. Debt financing

10 BIOMASS MAGAZINE | MARCH 2016

of $180 million for each facility was secured from five banks, with the partnership expected to generate some $800 million in revenue over a 30-year period. “These 40-MW plants will generate continuously, but that still makes up less than 1 percent of B.C. Hydro’s total power output on any given day,” says Fadi Oubari, vice president and head of development and western operations at Veolia Canada. Oubari says there are no differences between the two plants other than their wood yards, and they are the same for a reason: to optimize operation costs. At Fort St. James, which is roughly 75 percent complete, there are three biomass silos, whereas at Merritt, there is a fuel yard of biomass piles, says Brandon Tracey, Fengate Canada’s manager of power and utilities. Merritt is about 80 percent of the way done, he notes. At Merritt, construction around the boiler is moving along, Tracey says. The conveyors that will move the raw feedstock into the plant are about two-thirds of the way finished. The steam turbine building is constructed and the offices are up, he says, and a lot of the major equipment is on-site, but piping and electrical connections are yet to be made. As Oubari is only too aware, these are complex, time-consuming projects. “We have a lot of biomass projects in Europe and these are our first two in North America,” he says. Perhaps the biggest challenge and variable is in securing and managing the feedstock itself, from collection to getting it to the boiler.

to ensure that it is metal-free, as metals wreak havoc on the plant’s state-of-the-art Siemens boilers. The wood is then analyzed for moisture and goes into a sieve that captures chips that are too large to be processed in the boiler. These “overs” go into a bin and are later recrushed into smaller chips, according to Oubari. The right-sized material is conveyed into an FSE grate stoker boiler and burned to produce high-pressure steam that expands into a Siemens condensing steam turbine that generates up to 40 MW. A small amount of the generated power is used to meet the plant’s Forest to Fuel needs, but the lion’s share is sent to the B.C. Once raw material arrives by truck at the Hydro grid at substations only a few kilomefacility, Oubari says it is exposed to magnets ters from each plant.


Once the steam has expanded, it is sent through air-cooled condensers and re-liquefied, and then circulated back into the boiler. Oubari points out the closed-circuit nature of the process, in that it requires only a limited amount of water that is recirculated; there are no cooling towers and few chemicals involved. Fuel gases are treated in an electrostatic precipitator to remove fly ash as it goes through the plants’ fuel exhaust stacks, he adds. In all, the plants will directly or indirectly create some 160 new jobs over the course of the projects’ three decades of operation, during which power will be purchased by B.C. Hydro at a standard offer price of $109 per MWh. “Our job has been to make sure

this plant has enough biomass for the duration of this PPA and that we’re going to be able to generate power at the price B.C. Hydro is willing to pay,” said Oubari. For large biomass plants, it’s not so easy to find a 30-year resource, says Taraneh Sowlati, a professor and expert in woody biomass supply chain management at the University of British Columbia in Vancouver.

Gauging Supply

At least part of the impetus for B.C. Hydro’s tender offer was prompted by the government of British Columbia’s efforts to get rid of dead trees decimated by the mountain pine beetle, according to Oubari. Dead trees create a fire hazard that most foresters

GOING VERTICAL: The biomass boiler at Veolia and Fengate Capital Management’s Fort St. James plant is identical to the one being installed at its Merritt facility, both more than three-quarters complete. PHOTO: FENGATE CAPITAL MANAGEMENT LTD.

would like to see alleviated, and many believe it makes sense to remove and use the dead and dying wood. Lodgepole pine is most affected by the beetle, and if it’s not disposed of within a few years, it cannot even be used for pulp. And, as Sowlati points out, once a tree is dead, the beetles will move to another healthy tree and kill that one as well. Thus, if a plant relies on residues and chips from trees killed by the beetle, Sowlati says, the maximum MARCH 2016 | BIOMASS MAGAZINE 11


READY TO GO: The steam turbine chiller at Fort St. James has been put into place. PHOTO: FENGATE CAPITAL MANAGEMENT LTD.

feedstock it could supply may only be five or 10 years. So, while beetle kill is a good start for a large plant’s multidecade needed fuel supply, it hardly represents a resource panacea. But Oubari remains bullish on woody biomass, if only because of its renewable benefits. “We are using a fuel that has [heretofore] been burned as waste, and then we are displacing energy created by coal-fired plants,” he says. But that doesn’t mean that North America is ready to fund woody biomass power plants in the same way that it has solar and wind. Oubari points out that Europe is definitely ahead in woody biomass energy, especially in France and Scandinavia. “Europe has bought into the notion of going to greener fuels and is in the process of mixing wood with coal or replacing coal with wood entirely,” says Dan Parrent, regional biomass coordinator with the U.S. Forest Service in Anchorage, Alaska. “It’s not all economic in Europe, some of it is socially driven.” It’s a tougher sell in North America. For example, in Alaska, coal-burning plants are still economically viable in a way that woody biomass isn’t, says Parrent. And in coal-rich states

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like Wyoming, West Virginia and Pennsylvania, the same logic applies. Bankers see the fuel procurement as a big risk, Oubari contends. And he notes that it’s challenging to find a one-stop shop that can put the project together—manage fuel procurement, engineering, construction and operation. “We are this one-stop shop, and that’s why we have been successful in biomass,� he says. “Veolia has been successful because we can manage all the components of a project.� U.S. investors are wary of woody biomass projects that don’t involve an experienced operator. “Most of the time, these projects are promoted by someone who is generating the waste, but has no experience putting together a complex biomass project,� Oubari says. Parrent agrees, noting that large steam power plants are mostly fueled by natural gas or coal. “Right now, those fuels are very inexpensive relative to wood,� he says. Since Veolia and Fengate have a lockedin PPA, the partners say fluctuations in the

price of more conventional energy commodities, such as natural gas, oil and coal, will have little impact on their operating revenue. Even so, the economics of the larger energy markets can still have an impact on decisions to construct woody biomass plants. Sowlati says the economics of woody biomass electricity plants can vary greatly from region to region and each case, because woody biomass plants depend on a ready supply of woodchips and residues within an acceptable distance of the site itself. Parrent says for a 40-MW plant, suppliers will likely need to reach out beyond a 100mile radius to obtain the necessary woody biomass. “That’s a long way to ship wood; you can ship a lot more Btus shipping coal per unit of weight,� he says. Even so, there may be other ways to economize on operating costs as Veolia is demonstrating. For example, ashes created by the boilers can also generate marginal revenue via use in farming, silviculture and in the case of the lighter fly ash, as an additive in cement, says John Turner, Veolia’s vice presi-

dent of operations for British Columbia. Veolia is constructing three deepwater wells in the Fort St. James area, Turner adds, and water needed for the Merrick facility will come from the city of Merrick itself. Any wastewater that emerges from the facility will be clean, he says. Neither partner seems to be dissuaded from working with each other again, if a new woody biomass opportunity arises. Both Veolia and Fengate say that they would welcome the development of similar wood biomass energy projects. “Our relationship has been good, but projects like this are pretty unique,� Tracey says. Oubari adds that he and his partners are betting that a combination of the recent beetle kill and a healthy logging industry in north central British Columbia will keep these two new plants sufficiently fueled for the next three decades. Author: Bruce Dorminey Science Journalist/Author brucedorminey@gmail.com Twitter:@bdorminey

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MARCH 2016 | BIOMASS MAGAZINE 13


PelletNews Top 2014 pellet producers (million metric tons) U.S.

6.9

Germany

2.1

Canada

1.9

Sweden

1.6

Latvia

1.3

SOURCE: FOOD AND AGRICULTURAL ORGANIZATION OF THE UNITED NATIONS

FAO: Europe’s pellet use drives global production to new record The Food and Agricultural Organization of the United Nations recently published updated data on the global wood products industry that shows wood pellet production set a new record in 2014. According to the report, wood pellet production grew by approximately 17 percent in 2014, reaching 26 million metric tons, up from 23 million metric tons in 2013. The growth was driven primarily by increasing consumption in Europe. The U.S. was the top pellet producing nation in 2014, with 6.9 million metric tons. Germany, Canada, Sweden and Latvia rounded out the top five pellet production countries, with respec-

tive production levels of 2.1 million metric tons, 1.9 million metric tons, 1.6 million metric tons and 1.3 million metric tons. According to the report, the U.S. Canada and Latvia are also the largest pellet exporters, joined by the Russian Federation and Portugal. Together, these five countries exported 9 million metric tons, or 58 percent of global exports, in 2014. The largest pellet importers include the U.K., Denmark, Italy, Republic of Korea and Belgium. Together, these five countries imported 11 million metric tons of wood pellets, up 29 percent from 2013, and accounting for 79 percent of global imports.

European Commission investigates UK state aid for Drax conversion In January, the European Commission announced the opening of an in-depth investigation to assess whether the U.K.’s plans to support the conversion of part of the Drax coal power plant to operate on biomass are in line with European Union state aid rules. In a statement issued in response to the EC’s announcement regarding the opening of the investigation, Drax Group plc said the commission’s action is the next step in the process for obtaining state aid approval and is in 14 BIOMASS MAGAZINE | MARCH 2016

line with expectations. “Drax welcomes the opportunity to work with the U.K. government and the EC to complete the state aid clearance process,” the company said. A similar investigation was opened on the proposed biomass conversion of the coal-fired Lynemouth power plant last year. In early December, the European Commission announced that investigation found U.K. support for the Lynemouth conversion was in line with EU state aid rules.


PELLETS¦

Preventing Pellet Plant Failures BY JOHN SWAAN

The apparent simplicity of making wood pellets has and continues to cause many project developers to fail to incorporate the knowledge, skills and wisdom gained from experience into the plant designs and operations protocols. It is much more cost-effective to get it right the first time, rather than to retrofit, or worse, fail. Errors in feedstock procurement strategies, plant design, equipment choices, process flow, operations methods, and transportation strategies lead to outcomes that fail to meet the benchmarks set in the spreadsheets that justified the project’s development. Every step of a wood pellet manufacturing project, from feasibility analysis, fiber procurement, design and engineering, commissioning, full operations, to mill-to-user logistics, should benefit from the lessons learned by many years of seeing all the wrong ways of trying to make and market wood pellets. Wood pellet projects, whether for the heating markets or for producing industrial pellets, are far more complex than process schematics and rosy spreadsheets suggest. For example, if the procurement strategy is poorly crafted, the average delivered wood costs may exceed expectations and fiber quality may not match expectations. A few fiber-related guidelines will prevent problems with production volumes and project cash flows. Secure consistent volume for 24/7 operations, regardless of supplier interruptions, seasonal harvesting interruption, and weather or road conditions. Site the plant within a 50-mile radius of the majority of the fiber supply. Have knowledge of sustainability requirements and compliance costs, as the wood basket must be able to supply certified fiber at volumes and pricing as expected. Avoid fiber baskets that have competing pulp mills, board plants or other wood pellet plants that may demand the same wood. Strategize to have as consistent a species mix and quality as possible. The feedstock should be clean and free of dirt, stones or foreign debris, as low-quality feedstock deteriorates pellet quality and durability, and lower-quality feedstock and variable species mix also stresses the equipment and increases operating costs. We often say that the manufacturing process of wood pellets is 70 percent technical, and 30 percent art. Engineers may get the 70 percent right, but if the 30 percent art (experience, knowledge and skill, wisdom) is not acknowledged, the project could spend many years in its commissioning phase or be scuttled due to impatience on realizing the expected rate of return on the investment. We know from experience that in most cases, having the project design and process equipment selection reviewed by

an expert in pellet plant operations will result in a project that transitions from construction to full operation faster, and is much more likely to meet or exceed industry benchmarks. Relying on an engineering, procurement and construction company claiming to have the knowledge and experience to deliver an operating plant on time and on budget is a gamble. They may have several projects under their belt, but they typically do not have the benefit of operations experience. Project developers who tap into the wisdom of those who have seen it all, know all the wrong ways of doing things, and advise the engineering firm on design and equipment specifications are more likely to have far fewer headaches. Final informed decisions on selecting process equipment for the correct size and capacity for the desired performance should be the responsibility of the project developer under the guidance of a seasoned pellet making expert. All project developers have learned or will learn that building the wood pellet plant is the easy part. Commissioning a wood pellet plant and bringing it to its expected capacity and pellet quality is like the “valley of death” that many startups experience. Cash flows the wrong way while in the valley of death. Some never emerge, while others see the internal rate of return degrade as the investments needed to get it right mount. Getting it right early in the development cycle can shorten the commissioning phase and get the cash flowing in the right direction faster. A state-of-the-art plant built correctly only operates and performs as well as the people who operate it. A well-trained and disciplined operations team is essential. Training by seasoned operations experts, prior to startup and during commissioning, is critical. Even if all of the criteria for fiber supply and plant design are on the mark, the operation is much more likely to emerge from the valley of death sooner if the operators are not learning from their own mistakes, but benefiting from the wisdom of seasoned experts. All of the above aside, assuming there is a market for the pellets at prices that support a project, making wood pellets can produce decent margins. But just one large or a few small surprises can erase those margins. The best way to avoid surprises and losing money is to involve a seasoned expert as early in the project cycle as possible and to ask challenging questions that are informed by operational experience. Author: John Swaan Senior Associate, FutureMetrics Inc. www.futuremetrics.com 207-824-6702

MARCH 2016 | BIOMASS MAGAZINE 15


¦PELLETS DEPARTMENT

A LOGISTICAL CHALLENGE: A debarking machine is assembled at Drax’s Amite BioEnergy facility near Gloster, Mississippi. Production facilities under development with capacities similar to Amite’s (500,000 tons) are struggling to hold investor attention, as the challenges faced by plants of this scale to achieve nameplate capacity become more widely known. PHOTO: TIM PORTZ

Pellet Capacity Shake Out Challenging market conditions and the realities of bringing large production facilities to nameplate capacity are thinning a oncecrowded pellet project development herd. BY TIM PORTZ

A

t the beginning of 2015, Biomass Magazine was tracking 46 different pellet production projects in various stages of development, not already in active construction. Together, these 46 projects represented over 9 million tons of production capacity, and industry insiders began wondering and worrying about rampant overbuilding. For Mike Curci, North American capital sales manager at Andritz, this activity made for a busy year. “Last year alone we spoke with probably 35 to 40 different projects in the early 16 BIOMASS MAGAZINE | MARCH 2016

stages of development,” he says. “Possibly 85 percent of those received a budgetary quotation and further details from us.” Andritz, a leading manufacturer of pellet presses and other material handling equipment, supplies equipment recommendations and pricing as development teams work to understand the capital costs required to get a plant built and operating. As 2015 played out, however, the dollar strengthened, mild winters characterized most of the pellet-consuming world, and low-cost

producers gobbled up emerging demand in Asia. Simultaneously, stories about start-up challenges for similarly sized production facilities began to circulate. Investor confidence began to unravel. Throughout its 2015 plant data confirmation efforts, Biomass Magazine confirmed that development activities had ceased at 16 of the 46 pellet projects under development but not yet in construction. Together, these 16 projects represented over 5 million tons of annual production capacity. For the facilities Biomass


Magazine was able to reach, over half cited lost investors and lost funding as the primary reason development stopped. For Don Land, co-owner of Process and Storage Solutions, these findings are not surprising. “The thing is, when you’re looking at wood pellet plants, the big issue is the relatively small number of plants out there with large capacities (350,000 tons) that have had success,� he says. “There were different problems with projects that stopped, but for investment bankers and the companies out there putting money into the industry, the problem they’re having right now is seeing a lot of struggles, and plants that take two, three, or up to five years to get up to nameplate capacity.� From both Land’s and Curci’s perspectives, a handful of recurring themes are emerging from these halted projects. First among them is planned capacity. The average capacity of the 16 projects that Biomass Magazine learned are no longer under development was 325,000, and five of the projects were targeting annual production of over 500,000 tons. “Developers are landing on these planned capacities because they believe that production volumes at that level will be necessary to land an offtake agreement with a European utility,� Land says. The assertion makes sense. An offtake agreement with a utility with a sizeable balance sheet provides lenders and project investors with confidence, and pellet buyers have shown a preference for procuring pellets from large, multifacility producers.

The challenge, however, lies in the feedstock logistics required to consistently feed a facility with that kind of capacity. “If I build a plant right here where I’m standing, and I’m looking to produce 500,000 tons a year, I’m going to need 1 million to 1.2 million tons of green product per year,� Curci says. “In order to get that, based on where I am, I’m going to have a radius of 75 or 100 miles to procure all of that material, being mindful that I’m in Florida and everywhere I turn I’m looking at pine trees.� This challenge, Land observes, extends beyond projects being developed, and includes projects that have already been built. “There’s not a single new plant that I know of that has been able to reach their nameplate capacity within two years,� he says. “You just can’t open a facility, throw open the gate and expect that the amount of material you’ll need will just show up.� For Curci, plants planning on outputs of this scale will struggle with what he calls the “Three Ms� of pellet plant project development: money, material and market. “I’d say 50 percent of the phone calls I receive are from people who don’t have all Three Ms in place and well understood,� he says. The project development funnel within the pellet sector did not completely empty, but the projects that remain look different than those that struggled and ultimately failed to maintain momentum. According to Biomass Magazine plant data, 30 projects are still under development, representing over 4 million

tons of capacity. Just five of these 30 are being planned with capacities over 300,000, and the average capacity amongst the remaining projects is less than 150,000. “What we’ve seen work are those 180,000- to 200,000-ton facilities,� Curci says. “The logistics are far easier to manage, and the capital required is significantly less.� What remains to be seen is whether foreign pellet buyers will have any appetite to engage in offtake agreements with producers in this capacity class. According to both Land and Curci, the projects that stand the best chance of maintaining investor interest, successfully capitalizing and moving into construction are plants that recognize the impact of inbound and outbound logistics, and allow that to influence their development strategy. “I think you’re going to see the small- and medium-sized mills have more success,� Land says. “You’re going to see them on waterways and close to good rail infrastructure that connects them efficiently to a port. Finally, I think the projects that are ultimately successful will be staffed by people with a working knowledge of wood processing.� Author: Tim Portz Executive Editor, Biomass Magazine 701-738-4969 tportz@bbiinternational.com

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ThermalNews Central Boiler releases new line of hydronic heaters Central Boiler has released the Classic Edge 350, 550 and 750, its newest line of hydronic heaters. The three models were added to the list of Central Boiler hydronic heaters that meet the U.S. EPA’s new source performance standards, which became effective this year. The new patent-pending design employed by the Classic Edge models delivers better efficiency and more heat output than traditional wood heating. The heaters also feature urethane insulation, a high-efficiency, waterproof, airtight insulation that reduces heat loss. According to Central Boiler, preheated air is added around the base of

the fire and as the wood begins to gasify. The gases are added to the extremely hot oxygen from the patented air charge tube. Final combustion takes place as these gases move downward to the reaction chamber where extremely high temperatures aid in complete combustion. In addition, the furnace’s patent-pending vertical heat exchanger is designed to optimize the transfer of heat from the hot gases to the water, producing high thermal efficiency with low emissions per Btu of heat output.

A HOT NEW DESIGN: Central Boiler recently announced the release of Classic Edge 350, 550 and 750, its new line of outdoor wood furnaces. PHOTO: CENTRAL BOILER

Scottish government funds district heating project The Scottish government has announced it will aid in the funding of a £10.6 million ($15.2 million) district heating biomass project in Broomhill, Glasglow. The Cube Housing Association District Heating Project will provide heat and hot water

to 701 homes, and aims to reduce fuel poverty in the area. The project is being funded partly through Scottish Partnership for Regeneration in Urban Centers via a £5 million loan, with the remainder coming from British Gas, which is carrying

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out the building and installation work. The project will include three 500-kilowatt wood pellet boilers with thermal heat stores, 1.5 MW of condensing gas boilers to for backup, underground heat mains and a new distribution pipe network.

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THERMAL¦

Utilizing Urban Wood Waste BY MEGHAN MARTIN

Utility companies trim trees along the highway in order to avoid interaction with electrical wires, city governments cut down dangling branches in local parks to ensure safety of visitors, and when a big storm hits, felled limbs and debris are bundled and picked up by garbage companies. But where does this urban wood waste go? Most times, it is either openly burned or sent to the local landfill. As efforts to conserve and recycle natural resources increase, urban wood waste utilization projects are becoming more popular in cities across the U.S. These projects take urban wood waste from tree removals, untreated salvaged lumber and scrap wood from pallets or crates, nonmarketable limbs and stumps, dying trees and trees infected by invasive insect species in order to give the wood a second life and communities a new source of thermal energy. Urban wood can fuel entire cities, and provide a clean alternative to other types of heating fuels such as coal and heating oil. For example, St. Paul, Minnesota, has had great success in using urban wood to heat 80 percent of its commercial, residential, and industrial buildings in the downtown area. Heat is provided by District Energy, which operates a hot water district heating system. The primary source of hot water comes from a combined-heat-and-power plant (CHP) that is primarily fueled by urban wood residues. When Dutch elm disease started killing off St. Paul’s urban forests, the CHP plant proved an ideal opportunity for the city to reduce reliance on coal, while simultaneously reducing unhealthy particulate emissions and saving taxpayer dollars that would otherwise be spent on hauling the diseased trees to landfills. St. Paul is not the only example of using what would otherwise be considered wood waste as a productive source of energy and a savings of public funds. Colorado’s Boulder County is working on installing a biomass burner in its jail, in order to provide heat for more than 450 inmates. This facility is to be powered by wood thinnings from nearby forested land, not only reducing the jail’s carbon footprint, but also lowering the likelihood of forest fires or reducing the intensity of those that might occur. The reuse of waste wood is not simply limited to its use as a source of thermal energy. As communities look to better utilize resources that were once considered valueless, they are now transforming it into a host of products from mulch to furniture. For example, in 2014, members of Chicago Sculp-

ture International partnered with the Chicago Park District to transform sick and dying trees into public art. These trees can now be found in an array of parks in downtown Chicago; they vary from stumps embellished with mirrors and yarn to carved masterpieces that brighten the city’s public spaces. Similarly, the furniture industry is increasingly using recycled wood, in addition to lumber harvested from plantations. For example, Starbucks Coffee Co. is making its stores greener through recent renovations that include new tables and chairs built from recycled wood. Local furniture manufactures are starting to use urban wood from trimmings to create cabinet doors and shelving units. Thrifty individuals are even creating their own coffee tables and household décor from urban wood found around their towns. While urban wood utilization projects are effective in conserving natural resources, increasing the number of jobs in a community and displacing coal, certain roadblocks can be encountered. In the case of using urban wood for mulch, there are environmental concerns around the recycling of wood that has been treated with chemicals. These chemicals can leach into the soil; therefore, measures must be taken to ensure that the wood being used is free of harmful elements. Facilities that rely on urban wood waste for energy sometimes struggle to have enough wood to keep it running, but in cases like St. Paul, these facilities can use a backup source of timber such as material provided by state’s forestry industry. As the popularity of these types of projects increase, communities throughout America will continue to see nature-inspired art and a decreased dependence on coal and other nonrenewable sources of energy. The artistic and practical usage of urban wood waste is helping to engage creative, scientific, and environmentally focused minds in moving toward a path of sustainability in urban settings. Author: Meghan Martin Clean Energy Fellow, Biomass Thermal Energy Council 202-596-3974 www.biomassthermal.org

MARCH 2016 | BIOMASS MAGAZINE 21


¦THERMAL

THE ULTIMATE

BIO MA SS HE AT I N G PAC KAGE Via a contractual arrangement unique to biomass heat in the U.S., Wilton, New Hampshire-based High Mowing School replaced fuel oil with a biomass district heating system from Xylogen. BY RON KOTRBA

N

o one buys a furnace because it matches the décor of the room. Boilers and furnaces are purchased because conventional wisdom says they must be bought, fed and maintained to stay warm. Imagine purchasing just the heat that warms your home instead of the costly equipment, the volatilely priced fuel that feeds it, and all the maintenance headaches that come with operating the system. Further envision contracting for a turnkey heating package that, in addition to reliable warmth, provides no-hassle, maintenance-free operation, zero upfront capital expenditures, consistently reliable hot water, multifuel biomass and propane capabilities, and the ability to lower costs year-over-year as energy efficiencies rise and usage or prices drop. This is precisely what a Wilton, New Hampshire-based Waldorf private school bargained for in its new biomass district heating system provided by Xylogen, a joint venture between Froling Energy and Optimal Energy Solutions LLC. “Philosophically, the school makes an effort to treat the environment as kindly as possible,” says Philip Brooks, a trustee at High Mowing School. “We tend our own gardens, grow our own organic foods. We are green and always have been.” For years, the school had been providing heat and hot water to its 120 students with fuel oil boilers. “We wanted to get off oil,” Brooks says. “We felt that, with global warming, it was important for us to do that but, financially, it wasn’t possible because we didn’t have builders or contractors who were interested in financing a biomass system for us.” Then he met Mark Froling, president of Froling Energy, which started in 2008 as

22 BIOMASS MAGAZINE | MARCH 2016

a residential and commercial biomass boiler company that now predominantly installs wood pellet and chip boilers for the commercial sector. Froling says power purchase agreements (PPA) are common with solar customers, where the customer buys the energy but not the hard assets. “So my partner and I were thinking how to copy that,” Froling tells Biomass Magazine. With Optimal Energy Solutions’ principal Henry Spindler, Xylogen was formed in 2012 to provide solar-style PPAs to biomass thermal customers. “We are not selling heat per se, but a fullservice heating package contract,” Spindler says. “We don’t tell customers, ‘You’ve used this number of Btus and this is your bill.’ We have an annual fee and there are both fixed and adjustable elements based on how much fuel is used. If we or the customer find ways to save energy, then we all end up ahead— the customer saves and we save. One of the things we thought of quite a bit in setting up Xylogen is how to structure incentives so everyone is enticed to minimize the amount of heat used. That was very important to us. It is unique in any sort of arrangement, where both sides benefit from doing the right thing.” Essentially, the 20-year contract between Xylogen and HMS dictates that, as the customer’s energy requirements rise or fall, they don’t take a huge hit on the upside but they also share the benefits on the downside. “It’s a breakeven situation for us,” Brooks says. “We pay them a monthly bill equivalent to what we were paying for oil before.” The price paid by HMS over the contract period was lowered by the value of renewable energy

credits continuously generated by the new biomass system and a grant from the public utilities commission. HMS provided no upfront capital costs for the district heating system under contract with Xylogen, which used Froling Energy to build a new, $800,000 boiler house on campus and install a network of underground piping to, and flat plate heat exchangers in, 10 buildings onsite. Xylogen contracted with Spindler’s other company, DCM Logic, to provide automation and monitoring controls for the entire system. Feedstock silos were installed next to the boiler house and Froling Energy provides deliveries of dried wood chips to keep heat and hot water flowing throughout campus as needed. While contract details took about a year to iron out, the entire sales cycle—from beginning negotiations to operation—was roughly two years, Froling says. The system is currently in its second winter of operation. The boiler plant houses two side-byside TX-150 biomass boilers from Austriabased Fröling Heizkessel- und Behälterbau Ges.m.b.H. They can run on wood pellets


or chips and are plumbed in parallel to a 3,000-gallon buffer tank that’s always kept hot. “The boilers ramp up and down based on the buffer tank temperature,” Froling says. Two HTP500 propane boilers were also installed as backup or for peak-demand situations. “There’s a lot of security and redundancy built in because it’s a boarding school and the kids can’t be sent home,” Froling says. “We even have a standalone backup generator, so if the power goes out, we can still provide heat.” Individually, each building can bring power with a handheld or wheeled generator. “Our installation goes to a flat plate heat exchanger,” Froling says. “The heat is piped from the boiler house that’s connected to a heat exchanger, and the buildings each have their existing distribution system. Now, instead of a fossil fuel boiler, the buildings are pulling off of the demand side of the heat exchanger, so they’re holding all the heat they need,” he explains, adding that 13 oil boilers were removed during installation of the new district heating system. Nearly a half-mile of piping was installed four feet below the

ground to connect all the buildings. Froling says the boiler house has one central pumping system with double-pump redundancy to circulate hot water to each of the heat exchangers, including valves to regulate flow to each location based on demand. Spindler says DCM Logic’s controls are layered on top of the manufacturer’s controls to make the boilers perform much better. “The monitoring is unique in this industry,” he says. “Generally, the boilers are installed and if they don’t break or fault in some way, they are left to their own devices. With our consistent monitoring, we can find things that would improve their performance. So we’ve been working on that, bringing information to bear to improve the boiler performance. It’s quite a synthesized, orchestrated package.” Mike Wisnewski, head of maintenance at HMS, says the old oil boilers and hot water heaters were antiquated. “There was a lot of messing around with them, the relighting, replacing and ongoing inspections,” he says. “Now there’s a lot less headaches for me with the heat and hot water.” Wisnewski says the

INTEGRATED DESIGN: Under High Mowing School’s 20-year contract with Xylogen, Froling Energy built a boiler house on campus as part of the new district heating system that includes two biomass boilers and two backup propane boilers inside. The building design was such that it blended in with the rest of the buildings on campus. PHOTO: HIGH MOWING SCHOOL

automation and remote access make identifying potential issues much simpler. “I can call them up if there’s an issue and say, ‘Hey, I got a problem in the main building,’ and if it’s our issue they tell us, and if it’s theirs, they can fix it.” The boilers initially ran on pellets but Froling says their higher cost has put pressure on him to provide greater savings, which is why Froling Energy began manufacturing what the company calls precision dry chips (PDC). “We did not develop it, we copied the European standard,” he says. In Froling Energy’s wood yard the company replicated the European process to screen, rechip and dry local hardwood chips to be uniform in moisture content (25 percent) and size, which is equivalent to a matchbook. “We try to be MARCH 2016 | BIOMASS MAGAZINE 23


PHOTO: HIGH MOWING SCHOOL

Call (978) 669-5019

HMS GRADUATE: Mark Froling, pictured here with the unaffiliated Fröling Heizkessel- und Behälterbau Ges.m.b.H. biomass boilers from Austria, is a graduate from High Mowing School, which made the project of installing a new biomass district heating system particularly rewarding.

quite precise, it’s much easier for the boiler to work,” Froling says. “And we can provide them at a much more reasonable cost, which is a big advantage to our customers.” The chips are dry enough to be blown into vertical silos rather than dumped into underground bunker storage. “It’s all very different than delivering green chips,” he says. “It’s much cheaper. It increases the cost of fuel a bit compared to a green chip but it decreases the capital costs of storage.” He says an underground bunker costs $250,000 to install whereas Froling installed $35,000 worth of vertical silos at HMS. “It’s a big savings on the cap-ex side, and a big breakthrough in terms of logistics,” Froling says. “All our customers are staying above ground and receive delivery of dry chips with a blower truck.” During the height of winter, HMS receives about two deliveries of PDCs a week. PDCs cost about half as much per ton as wood pellets, Froling says, though he adds they’re not quite as efficient because of the moisture content. He says his normal delivered cost of wood pellets to customers are $17.20 per MMBtu vs. $9.50 per MMBtu for PDCs. A customer like HMS can save up to $12,000 a year by switching from pellets to PDCs, he says.

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THERMALÂŚ Both parties benefit from this contract arrangement for a total biomass heating package. For the school, the contract removes the financial and operational risks and burdens. Xylogen finances, installs, operates and maintains the boilers, including ash removal, and HMS can concentrate on what it’s good at—teaching kids. Conversely, Froling Energy ensures long-term customer demand for its PDCs while Xylogen and DCM Logic provide what they do best—service, monitoring, controls, maintenance and optimization of its system. Spindler says one benefit to Xylogen is they know who is maintaining and working on the units. “There aren’t other parties coming and going, so it’s cleaner that way,â€? he says. Also, over time, operations become optimized, so targeted adjustments can be made to save energy. “So there’s the possibility for improvement over the term,â€? Spindler adds. “This system has a lot of mechanical, moving parts, and operating and maintaining it is a much bigger hurdle than people realize,â€? Froling says. “Especially in an institution like this, our format is particularly beneficial. Schools like this have long-term visions, they want this technology, but their budgets don’t allow them to bring in the right people to in-

stall and operate these kinds of boiler plants. With Xylogen, we bridge that gap.� All told, Froling says HMS is saving about $400,000 over the life of the 20-year contract compared to what the costs would have been to maintain its previous network of oil boilers, including replacement costs of units that would have reached end-of-life, the $10,000 in annual maintenance costs, and the price of fuel oil. “It’s a modest savings, but that goes long way on a campus like this,� Froling says. This contractual arrangement is unique for biomass heat in the U.S., but not necessarily so for Europe. “I don’t know why it’s unique here,� says Froling. “It’s common in Europe. The mentality here is that people don’t like long-term contracts, so it’s harder to sell long-term commitments even though we’re bringing in the cash and financing, and taking all the risk on the customer’s part. They have to have a real long-term vision. Businesses are interested in quarter-to-quarter decisions.� Spindler says people are just used to buying and owning their own equipment. “It’s a shift to think about doing it the other way, even though people don’t know how to tend their equipment, whether it’s oil or biomass.

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I don’t know why it’s so hard to move to this setup, it’s something we encounter with other customers and it’s not always clear why they wouldn’t. If they’re capable of operating the system at a high level and can provide the capital, then they’re better off buying and owning it because there’s no one else to pay. But if high performance is key, the customer may not be able to provide that for themselves. And that’s where we come in.� Froling is an HMS graduate himself, so being able to provide his alma mater with a new biomass district heating system was particularly rewarding. “It was very cool,� he says. “You always want to do something that’s beneficial to your school, and I’m happy with what we’ve accomplished there. It is an interesting project. It was our second Xylogen project, but a first of its kind to combine so many buildings and work out the details of such a large district heating plant.� Author: Ron Kotrba Senior Editor, Biomass Magazine 218-745-8347 rkotrba@bbiinternational.com

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BiogasNews BioHiTech tests AD process in New Jersey

BioHiTech America, a subsidiary of BioHiTech Global Inc., has partnered with Natural Systems Utilities, Ridgewood Green RME and the village of Ridgewood, New Jersey, to test a process that will allow its EcoSafe Digester to provide feedstock for bioenergy production. BioHiTech’s Eco-Safe Digester utilizes an aerobic digestion (AD) process to convert food waste to grey water, also referred to as effluent. Typically this effluent is discharged DJH LVODQG & into the sewage system. The new process being tested in New Jersey will tank the unit’s effluent, allowing for

U.S. EPA’s Food Recovery Hierarchy

transportation to an AD plant where biogas can be captured and used to create renewable energy. According to BioHiTech, the Eco-Safe Digester performs the hydrolysis stage of AD at the point of origin. Because the aerobic digestion process begins with the breakdown of solid organics to a liquid slurry, the effluent is able to be easily pumped and transported, arriving at the AD facility in a predigested condition allowing for efficient feedstock transfer and eliminating the need for costly processing at the AD facility.

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Source reduction Reduce the volume of surplus food generated Feed hungry people Donate extra food to food banks, soup kitchens and shelters Feed animals Divert food scraps to animal feed Industrial uses Provide waste oils for rending and fuel conversion and food scraps for digestion to recover energy Composting Create nutrient-rich solid amendment Landfill/ incineration Last resort to disposal

Construction starts on Pennsylvania AD project Lancaster Area Sewer Authority and Buchart Horn, an engineering and architectural firm, recently broke ground on a $26.8 million biosolids upgrade and improvement project in Lancaster, Pennsylvania. The upgrade and expansion will include the addition of anaerobic digesters and a biosolids dryer. The anaerobic digesters will help to stabilize biosolids while producing methane gas. The biogas produced will be used to heat the digesters and the biosolids dryer. According to Buchart Horn, the project will result in Class A biosolids meeting the U.S. EPA’s highest standard. The upgrades aim to reduce the environmental footprint of the existing facility. “We carefully planned, studied and evaluated biosolids processing alternatives,” said Barry Smith, board chairman of LASA. “In the end, we are confident our final selection of anaerobic digestion coupled with heat drying with biogas will provide a sound return on the authority’s investment dollars and will result in a financially sustainable and environmentally friendly method of handling and distributing our biosolids product— making what was in the past a nuisance into a resource to be recovered and reused.”


BIOGASÂŚ

Optimizing a Biogas Plant BY DOMINIK KLAUS

Operating a biogas plant is a big commitment, but the work comes with a sizeable reward. Unlike other renewable energy sources, biogas is largely independent of external influences such as wind or sunlight. As a stable form of renewable energy, the demand for biogas is continually on the rise. Canadian programs like Ontario’s feed-in-tariff are continually developed to encourage the use and production of renewable energy sources in each province. The use of renewable raw materials to produce energy sources provides a unique opportunity for farms across Canada, but how can an operator tell whether it is getting all that it can from its plant?

What’s in Your Gas?

In order for a biogas plant to be considered ecological, economical, and safe to operate, it is crucial to know the exact composition and levels of the biogas produced. The analysis of biogas can be carried out with either mobile multigas detectors or a stationary measuring device. Detection technology must be capable of discovering various gases with different properties. This feature of detection devices is particularly important to the safety of the plant and to the production efficiencies within your system. Without such technology, operating a plant can be fatal. For this reason, a comprehensive operating system is necessary in every plant. The advantage of mobile gas detectors lies in the ability to measure the composition and ranges of the biogas at various points throughout the plant. This technology is predominantly useful for ensuring consistency throughout the plant. In most cases, it is possible to store the measurements internally on the device before transferring to a computer for analysis. Stationary devices are user-friendly and low-maintenance, but can limit the amount of locations for composition testing. Anaerobic digestion, the process in which mediums like manure are converted into gas, produces a variety of byproducts, including gases such as methane, carbon dioxide, nitrogen, and hydrogen. These gases can be odorless, which disguises dangerous properties during production. Even in small concentrations, the dangers range from irritation of the eyes, to nausea, to potential fatality through asphyxiation. Gas detection equipment is designed specifically to protect you, as well as the environment, from harmful emissions.

Leaks in a system mean two things: First, not all biogas is being converted successfully, and second, environmentally harmful emissions have the potential to make the plant hazardous. Running a system below optimal capacity simply means less energy to produce, and therefore, less to use or sell. Plants need to be inspected in all areas, including pipes, flanges, transitions and seals. Portable leak detection devices are beneficial to minimizing emissions of climate-impacting greenhouse gases, as well as ensuring the plant is containing the maximum amount of gas. These portable devices are easy to use, and highly effective in optimizing the efficiency of your plant.

Pay Attention to Self-Protection

One thing that is often underestimated in biogas plants is self-protection. Biogas can have dramatic consequences to operators and workers if not handled properly. Safety devices are available, both for personal protection and other securityrelated functions such as free-measuring shafts. These devices can be calibrated to detect specific concentrations of gas at only a few parts-per-million, which are undetectable without specialized equipment. Gases such as methane, the most common gas produced in biogas plants, can be odorless, and thus extremely hazardous to the human body, containing explosive and asphyxiating properties. Having equipment on hand to detect such gases is essential to the safety of the plant, and most importantly, the workers.

Technology Supports You

Biogas testing technology is available to help operators achieve the highest possible plant efficiency, while contributing to the reduction of emissions that can be harmful to the environment. Devices designed for leak detection, quality inspection and self-protection are continuously being developed in order to benefit any size of plant. Expanding the presence of this technology will continue to increase the demand for renewable energy in Canada, and the reward for the people who produce it. Can you be sure you are getting the most out of your biogas plant? Author: Dominik Klaus Product Manager, Hermann Sewerin GmbH 49-5241-934-237 dominik.klaus@sewerin.com

Check for Leaks, Regularly

To further enhance efficiency of the systems and to reduce emissions of harmful greenhouse gases, it is imperative to check the entire plant regularly for leaks and structural defects.

MARCH 2016 | BIOMASS MAGAZINE 27


Circling Opportunity Blue Sphere Corp.’s two-prong business development strategy in the global waste-to-energy industry is proving to be fruitful. BY ANNA SIMET

28 BIOMASS MAGAZINE | MARCH 2016


BIOGAS¦

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NEARING THE FINISH LINE: Pictured is Blue Sphere’s Charlotte, Virginia, 5.2-MW anaerobic digestion facility, as of Jan. 21. The facility is nearly complete and is slated to be operational by early March. PHOTO: AERO PHOTOS

n a recent letter to Blue Sphere Corp. shareholders, CEO Shlomi Palas describes 2015 as a standout year for the five-year-old company. The declaration is tough to argue: Blue Sphere’s first two stateside anaerobic digestion (AD) projects have reached final stages of construction, and a recent acquisition in Italy adds four more existing AD plants to the company’s portfolio; all are operating under long-term power purchase agreements. Palas reflects on the journey he’s been on since 2007––the path, of which, has changed course several times––to where he is today. “At that time [2007], I was focused on China and working in biodiesel, I helped build an algae farm with a large utility company,” he says. A few years later, he founded Blue Sphere. “We didn’t start with waste to energy, but rather, a project that was supposed to reduce emissions,” he says. “We changed direction when the carbon credit industry in Europe did; we looked for other opportunities. After researching the WTE market, we saw that it was very well-developed in Europe, but in the U.S., it had just started moving forward.” Blue Sphere’s business development strategy is two-fold—new development (build-own-operate) in the U.S., and acquisition in Europe, with a focus on Italy. “In Europe, there are thousands of biogas facilities,” Palas says. “The market is good for acquisition and not development. America is good for development, but not acquisition.” Italy is home to about 1,200 biogas facilities, thus the appeal. “Down the road, our goal is to acquire a few dozen of them,” Palas says. “There are other markets in Europe in which we are active, such as Holland, but we have about 20 projects in the pipeline in Italy, and our goal is to acquire an additional seven this year.” He adds that while Germany, the birthplace of anaerobic digestion, boasts roughly 7,000 biogas plants, it is “a huge market, but an exhausted market. There are not many new developments over there, and we’ve identified a unique business opportunity in Italy, so that’s where we’re focused.” As for new-build projects, Blue Sphere has narrowed its efforts in the U.S. to the Northeast, where opportunities are unfolding largely in part to the region’s support of

zero waste initiatives. “I can’t say too much at this point, as big utilities don’t like when we name names,” Palas says, when asked to elaborate on Blue Sphere’s next U.S. projects. “But, I can tell you that our focus is more in New England, for the simple reason that it’s very supportive of the wasteto-energy industry—by regulation, by waste bans—the area is very advanced in comparison to others. I’m not saying we won’t do business in California, which is also advanced in its waste-to-energy initiatives, the South or other regions. If an opportunity arises, we’ll look at it. But for now, this is where we will initiate business.” And Blue Sphere is soon to prove out that business concept, as its pair of flagship AD projects, developed in partnership with an affiliate of York Capital Management, are nearly complete and will be operating by spring.

From Dirt to Digestion

A visit to Blue Sphere’s website provides each plant’s construction story via photos that have been posted over the past several months. The latest update provided in December shows a nearly complete Charlotte, Virginia, facility. “The receiving building is there, the gensets, digester, waste treatment is done…we were actually supposed to finish everything at the end of December, but the weather was so bad,” Palas says. “We didn’t have a choice, we had to hold back a little.” Now, the estimated finish date is the end of February or beginning of March, just in time for the facility to open its doors and serve as a tour site at the International Biomass Conference & Expo. “I just visited the site and nearly drowned in mud and snow, but we’re in good shape,” Palas says with a chuckle. “We’re in the last mile of construction, it looks beautiful.” In Johnston, Rhode Island, the plant is at nearly the same stage as Charlotte, the only significant difference being its size. “Charlotte is 5.2 MW, and Johnston is 3.2 MW, both are based on food waste. A 5.2MW plant is huge, we’re talking 424 tons of food waste per day…I believe the largest AD project in the world is 7 MW. Most in the world are less than 1 MW, close to half a MW, maybe 90 percent.” MARCH 2016 | BIOMASS MAGAZINE 29


HAPPY CAMPER: A worker stops work to pose for a photo outside of Blue Sphere’s Johnston, Rhode Island, 3.2-MW anaerobic digestion facility, where construction is keeping pace with the company’s Charlotte facility.

SPACE FOR WASTE: A view is shown from inside of one of the Johnston plant’s digestion tanks.

PHOTO: CREATIVECHICA PHOTOGRAPHY

PHOTO: CREATIVECHICA PHOTOGRAPHY

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30 BIOMASS MAGAZINE | MARCH 2016

Power from Charlotte and Johnston will be sold to Duke Energy and National Grid, respectively, via 15-year power purchase agreements. Building an AD plant and being able to easily replicate the same design elsewhere is a significant advantage, according to Palas. “The beauty of this business is that it’s almost like cut and paste,� he says, emphasizing that Blue Sphere does not own the technology being deployed at its plants, and doesn’t plan to at any point. “That’s part of our strategy—we want to be able to select the best technology available for each solution, whether it’s AD, woody biomass, incineration. For each project we face, we’ll choose the technology that will solve that specific problem.� The technology provider and engineering, procurement and construction contractor of Blue Sphere’s Charlotte and Johnston facilities is Italian company Austep S.p.A. “We let them take the reins,� Palas says. “The way we operate is that we’re not constructing the facilities, we hire others to do it. We’re more on the management and supervision level.� What drew Blue Sphere to the sites of the Johnston and Charlotte plants? A few main components are must-haves when it comes to AD project development, according to Palas, the first being a nearby interconnection. “A few hundred feet maximum—we won’t go a mile or a mile and a half. It needs to be near the substation,� he says. “The distance to the grid—it needs to be close.� The site must also be near a major highway, “or a railroad,� Palas offers. “It can’t be near any neighborhoods or houses; you don’t want 40 to 50 trucks of waste


LOOKING BACK: In this photo taken just nine months ago, rebar installation of one of the two digesters in Charlotte was complete. The next step was pouring of the first half of the digester concrete. PHOTO: BLUE SPHERE

going through a neighborhood. It should be in an industrial zone. There are more, but those are the major criteria when we come in to evaluate a potential site.” Additional components important to new projects in today’s development climate, Palas says, are incentives and tax credits, and that’s particularly to an industry that’s relatively young in the U.S., as AD is both state and federal, as well as low-interest loans, renewable portfolio standards and renewable energy certificates and other benefits offered to project developers. Without hesitation, Palas credits the strength of his team of 12 as the key to having accomplished such a great deal in one year. “It’s very strong, and we have the expertise we need—financial people, technical people, and business development, all of the skills you need to develop a successful project, that’s our main advantage. Some companies are very strong in technology, but weak in finance or business development.” Palas says he sees Blue Sphere growing personnel-wise, perhaps doubling or slightly more. And as far as adding facilities to its portfolio goes, 2016 is shaping up to be another productive year. “We have a lot of projects in the pipeline in the U.S. and Italy, and a few megaprojects in Asia—it’s going to be an interesting year,” he adds. “We’ve proven our concept under project development, now we need to prove to the market that it’s not luck—we know how to do it again.” Author: Anna Simet Managing Editor, Biomass Magazine 701-738-4961 asimet@bbiinternational.com

MARCH 2016 | BIOMASS MAGAZINE 31


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AdvancedBiofuelsNews US Navy launches Great Green Fleet On Jan. 20, Secretary of the Navy Ray Mabus and Secretary of Agriculture Tom Vilsack kicked off the U.S. Navy’s Great Green Fleet with the deployment of the USS John C. Stennis Carrier Strike Group during a ceremony at Naval Air Station North Island. The initiative was created to highlight how the Navy and Marine Corps are using energy efficiency and alternative energy to increase combat capability and operational flexibility. The blend fueling the JCS CSG’s surface ships contains alternative fuel made from waste beef fat provided by farmers and ranchers in the Midwest. In his prepared remarks, Mabus mentioned other notable enGOING GREEN: The Arleigh Burke-class guided-missile destroyer USS deavors like Theodore Roosevelt’s Great White Fleet and President William P. Lawrence departed its homeport in San Diego as part of the Kennedy’s mission to the moon. “We have never been a nation to Great Green Fleet initiative. shy away from such bold ambition, and with that thought in mind, PHOTO: U.S. NAVY PHOTO BY MASS COMMUNICATION SPECIALIST 2ND CLASS WILL GASKILL in 2009, I set some aggressive energy goals for the Department of the Navy,” Mabus said. “So, today’s remarks are about more than At the close of the ceremony, the Arleigh Burke-class guided just the Great Green Fleet; they are about the journey we have trav- missile destroyer USS Stockdale (DDG 106) departed the pier at its eled these past seven years and, more importantly, the exciting di- San Diego homeport, becoming the first U.S. Navy ship running on rection we are headed.” an alternative fuel blend as part of its regular operations.

Tesoro plans to process biocrude at its refineries

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34 BIOMASS MAGAZINE | MARCH 2016

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Tesoro Corp. has announced plans to foster the development of biocrude made from renewable biomass. To support the development of biocrude, the company is working collaboratively with Fulcrum Bioenergy Inc., Virent Inc. and Ensyn Corp. Fulcrum plans to supply biocrude produced from municipal solid waste to Tesoro Refining & Marketing Co. LLC to process as a feedstock at its Martinez, California, refinery. An estimated 800 barrels of biocrude per day will be produced at Fulcrum’s Sierra BioFuels Plant in Reno, Nevada, which is expected to be operational in early 2018. Ensyn is also expected to provide feedstock for Tosoros’s refineries. According to Tosoro, Ensyn has applied for a pathway with the California Air Resources Board to coprocess its biocrude, produced from tree residue—called renewable fuel oil—in TRMC’s California refineries. In February, Ensyn announced it had been granted approval for its pathway by CARB. In addition, Tosoro is working with Virent to establish a strategic relationship to support scale-up and commercialization of the company’s BioForming technology which produces low-carbon biofuel and chemicals.


ADVANCED BIOFUELS AND CHEMICALS¦

Supporting New Technology Worth the Effort

BY MATT CARR

As the campaign season heats up, one trend we are all familiar with is the criticisms leveled against federal support for new technologies, advanced biofuels and large-scale demonstrations of new processes. Oddly enough, this leads many critics who are normally business-friendly to mock companies for innovation. How many times have we read capitalist and business-friendly politicians or publications criticize companies for leveraging technology, intellectual property and nimbleness to create new markets for their technology? Most recently, I have heard these complaints about companies that started out developing one product, but when market forces changed, they shifted gears to find better markets. The truth is that these types of course corrections happen every day of every year. Smart investors look for companies with nimble technologies, smart management and talented teams to be able to surmount obstacles and succeed. What makes some of them targets for criticism is that they received government funds to create, wait for it…biofuels. And now that they have shifted gears to find better near-term opportunities, the argument is made that all previous investment and support must have been wasted. Now, it’s true that many biotech companies, originally founded to create low-carbon alternatives to fossil fuels, have had a challenging time developing these fuels at a price competitive with fossil oil. As such, these companies have adapted to changing market conditions and changed their business model to create other products, oftentimes with higher value, to enable the company to drive revenue, hire and retain employees, pay taxes and continue to grow the business. Companies looking to create fuels from algae, for example, are finding they are uniquely suited to make these kind of adjustments. Technology advances that more efficiently cultivate and process algae can be applied to fuel products, but they also leverage algae as a platform to make products for markets that no investor would want them to pass up:

Human health and nutrition: Algae can more efficiently produce protein, Omega-3s and other nutritional ingredients than any other crop. Algae can even be used to cheaply make drugs for cancer, malaria and other ailments. Animal and fish nutrition: Algae can help us remove the “middle fish” in aquaculture operations, sparing overtaxed fisheries. Farming algae in the desert as an animal feed can free up agricultural lands for other uses, bypassing the food versus fuel debate. Soil health and productivity: Algae-based fertilizers are proven to improve crop yields, adjust soil nitrogen balances and even turn fields into carbon sinks, reducing costs for farmers and decreasing environmental impacts. Many of these products would not see the light of day had it not been for technology developers working in algae-based fuels. We should not be asking whether federal support for new technologies is worth the effort if the results don’t immediately match our preconceived notions.The real question we ought to be asking is: What types of technologies do we want—and need—to ensure longterm economic growth, energy security and food supplies and environmental benefits? The answer lies not in continued subsidization for yesterday’s technology, but tomorrow’s. Advances in biotechnology are opening up unprecedented opportunities to create new products that compete on price, quality and performance. If anything, the cost curve for these technologies continues to bend down, whereas we know the cost curve for extracting fossil oil only goes up. On behalf of the hundreds of companies developing algae technology for a range of solutions, from feed to food to fuel, we welcome the discussion about the proper role for taxpayer support and federal policy. Author: Matt Carr Executive Director, Algae Biomass Organization mcarr@algaebiomass.org 877-531-5512

MARCH 2016 | BIOMASS MAGAZINE 35


¦ADVANCED BIOFUELS AND CHEMICALS DEPARTMENT

READYING FOR RETROFIT: Since September, Weitz construction crew has been working on preparing the prior Central MN Ethanol Co-op plant to move from ethanol to renewable n-butanol production. PHOTO: CENTRAL MN RENEWABLES

Ethanol to n-Butanol in the Land of 10,000 Lakes Construction retrofitting a Minnesota ethanol plant to produce renewable chemicals is well-underway. BY KATIE FLETCHER

B

ushels of corn have served as feedstock for Central MN Ethanol Coop LLC’s dry mill plant since 2002, but those days are soon coming to an end. Toward the end of March, ethanol production will cease at the 21-MMgy plant. Corn will still find its way to the Little Falls, Minnesota, site, but rather than ethanol and dried distillers grains production, the corn’s sugar will make biobased solvents n-butanol and acetone. U.K.-based Green Biologics Ltd., an industrial biotechnology and renewable chemicals company, acquired the

36 BIOMASS MAGAZINE | MARCH 2016

ethanol plant in December 2014, renaming it Central MN Renewables LLC. “The Little Falls location was selected for its ideal location relative to our feedstock, which is corn,” says David Anderson, global vice president of marketing with GBL. “This will be the first renewable n-butanol plant in the U.S., and we do have plans to build at future locations.” Although this will be the company’s first commercial plant in the U.S., GBL has a one-thirtieth-scale demonstration plant in Emmetsburg, Iowa, and a pilot plant in Ga-

hanna, Ohio, near Columbus. “When proving out technology, you start with bench lab, then you step it up multiple sizes to a pilot plant, then to a demonstration plant and then you reach commercial capability,” says Dana Persson, GBL president of North America, during an interview from the construction site. “I am sure the next plant will be even larger than this one.” Anderson says GBL is already in the process of identifying a second plant in the U.S., but the current focus is on starting up this first plant. Following the site acquisi-


ADVANCED BIOFUELS AND CHEMICALS¦

KEY TO SUCCESS: The distillation and fire pump building are part of Green Biologics Ltd.’s campus where it will deploy its advanced fermentation process. The green chemicals the company will produce possess a competitive advantage to petroleum-derived equivalents, as they are 100 percent renewable and have a reduced carbon footprint. PHOTO: CENTRAL MN RENEWABLES

tion, the company completed permitting in late August and groundbreaking shortly thereafter, enabling the project to remain on track to become operational during the third quarter this year. Despite conditions that often accompany a Minnesota winter, construction crew members are busy onsite, evidenced by the all-too familiar sound of construction vehicles using their backup beepers, audible even beyond Persson’s office window. As part of the retrofit, he says, the plant requires some additional equipment and building infrastructure, including slightly different distillation equipment than what is currently installed at the facility. Even so, the key components of the equipment and existing infrastructure fit in “pretty well,” Persson explains, with the new manufacturing process being readied for deployment. “This plant made sense for Green Biologics because you have existing grain handling and storage facilities, fermentation assets, water treatment capabilities, and the supply chain is already in place,” he says. “If they were going to start from a Greenfield operation, they’d have a much larger investment than what they will have with this plant.”

Persson adds that the feedstock supply will be “no different than what we do today” and come from area corn suppliers. “Prior to being purchased by GBL, the ethanol plant was a cooperative, so many of those corn suppliers were shareholders who have a long history with the plant,” he says. “Some of those same farmer shareholders and others invested in the new plant as well.” Area growers and the state have demonstrated support of the CMR project, Persson says, including the Minnesota Department of Employment and Economic Development and the Minnesota Department of Agriculture, which awarded the project $500,000 in state Next-Gen funding last year. Besides utilizing the current feedstock supply chain, all of the ethanol plant’s existing infrastructure will be leveraged, Anderson says, with the addition of the company’s advanced fermentation process (AFP) that can convert a wide range of feedstocks into green chemicals such as n-butanol, acetone and, through chemical synthesis, derivatives of butanol and acetone. The platform combines the AFP with proprietary Clostridium microbial biocatalysts and synthetic

chemistry. Anderson says the company’s key markets for its products include paints and coatings, adhesives, inks, personal care, cosmetics and fragrances. GBL is currently seeking customers for its commercial facility. “We are actively negotiating supply agreements with numerous partners,” Anderson says. In November, shortly after breaking ground on the ethanol plant retrofit, GBL received approval for membership to the American Chemistry Council. “This raises our credibility as a true specialty chemicals company,” Anderson says. The facility currently endures its growing pains as it’s readied for retrofit. “The focus of my office right now is making sure this plant is ready on time and on budget, and people are brought on and trained properly so that we are ready to produce renewable chemicals,” Persson says. Author: Katie Fletcher Associate Editor, Biomass Magazine 701-738-4920 kfletcher@bbiinternational.com

MARCH 2016 | BIOMASS MAGAZINE 37


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