2018 March/April Biomass Magazine

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March/April 2018

SEA OF OPPORTUNITY Hawaii’s Lofty Renewable Goals Drive Biomass Power Project PAGE 20

PLUS:

New York Pushes for Cleaner, Efficient Wood Heat PAGE 36

AND:

Maine MSW-to-Biogas Facility Construction Underway PAGE 28

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MARCH/APRIL 2018 | VOLUME 12 | ISSUE 2

06 EDITOR’S NOTE It All Adds Up By Anna Simet

07 EVENTS

COLUMNS 08 Wood Becomes High-Tech, Biomass Power Gains Steam By Bob Cleaves

09 Pellet Stoves and Solar Panels: the Perfect Match? By John Ackerly

56 Siting a New Facility: Costly Mistakes In order to achieve a successful project, developers must locate their projects in areas that assure a sustainable and affordable feedstock supply. By Stan Parton

60 From Plant to Port

Carefully planned logistics make for a safe and efficient transportation process for wood pellets manufactured at Drax’s U.S. manufacturing plants, for use at its U.K. power plant. By David Marks

62 MARKETPLACE

10 Tax Act May Spur More Biogas, RNG Project Investment By Doug Lamb and Durham McCormick

11 Long Road for Biofuels Industry

¦ADVERTISER INDEX

By Michael McAdams

12 Farm Bill Energy Title’s Record of Success By Lloyd Ritter

14 BUSINESS BRIEFS

FEATURES

20 Powering Paradise After a decade-long development process, 30-MW biomass power plant Honua Ola Bioenergy is nearing the finish line. By Ron Kotrba

28 From Concept to Construction Along with strategic partner Novozymes, Fiberight is developing a waste-to-energy biogas plant in Hampden, Maine, that will process waste from 115 communities. By Patrick C. Miller

36 Wood Heat State of Mind New York’s wood heating industry has been growing, but the residential market is in need of an overhaul with cleaner, more efficient appliances, and for commercial applications, a growth spurt. By Anna Simet

44 A Straighter, Shorter Pathway Approval time for cellulosic ethanol projects to earn D3 renewable fuel identification numbers under the Renewable Fuel Standard have hastened. By Susanne Retka Schill

CONTRIBUTIONS

48 Are Black Pellets Ready to Compete with White Pellets? A steam-exploded pellet technology analysis suggests most of the hurdles associated with commercial production and use have been overcome. By William Strauss

52 Organic Waste to Watts in Wine Country California’s San Luis Obispo County will soon be home to an innovative anaerobic digester that will convert organic waste into heat and power. By Jim McMahon

2018 International Biomass Conference & Expo 2018 Advanced Biofuels Conference 2018 European Biomass Conference AB Bruzaholms Bruk AFS Energy Systems AGCO Corporation Airoflex Equipment AMANDUS KAHL GmbH & Co. KG Andritz Feed & Biofuel A/S ASGCO Astec, Inc. Attis Innovations, LLC. Basic Machinery Co., Inc. Biomass Magazine Webinar Series Biomass Magazine's Top News BRUKS Rockwood CINTASA Americas CPM Global Biomass Group Evergreen Engineering FLSmidth GreCon, Inc. Hermann Sewerin GmbH Hurst Boiler & Welding Co. Inc. Idaho National Laboratry IEP Technologies Iowa Northern Railway Co. KEITH Manufacturing Company Kobelco Compressors America, Inc. McLanahan Corporation Pellet Fuels Institute Phelps Industries ProcessBarron Rotochopper Inc. Tramco, Inc. Uzelac Industries Varco Pruden Buildings Vecoplan LLC Vermeer Corporation Williams Crusher Wolf Material Handling Systems

42-43 16 23 41 50 2 47 15 54 18 64 3 32 38 59 26 31 55 33 17 51 27 25 46 34-35 40 30 39 22 13 53 14 19 58 57 49 61 4 7 24

ON THE COVER:

Construction is well underway at Honua Ola Bioenergy, a 30-MW biomass power plant in Hawaii that will use eucalyptus trees as fuel. PHOTO: HONUA OLA BIOENERGY

BIOMASSMAGAZINE.COM 5

¦EDITOR’S NOTE

It All Adds Up

EDITORIAL PRESIDENT & EDITOR IN CHIEF Tom Bryan tbryan@bbiinternational.com EDITOR Anna Simet asimet@bbiinternational.com

Every year, Biomass Magazine dedicates an issue to project development and plant construction. What I find most compelling when writing on this broad topic are all the moving parts that need to come together for a proposed plan to become a reality. It isn’t simply a matter of assembling a team, raising funds and building. There are many other obstacles to overcome, and they’re unique to ANNA SIMET EDITOR each project. asimet@bbiinternational.com Take Ron Kotrba’s page-20 Feature, “Powering Paradise,” as a prime example. It’s the first standalone, greenfield biomass power plant that I can recall being built in the U.S. in several years. When we launched our U.S. biomass power map over a decade ago, I remember making calls to the developers of this proposed project, which was fresh out of the gate at the time. And, as many projects like it do, it remained on our proposed list for a long time, while it navigated the white waters of project development. As we all know, many more projects sink than float, but this one did not, and its success could help pave the way to many more like it. Soon to come online, the facility will use fast-growing eucalyptus trees to generate 30 MW of power on the big island of Hawaii. While many large-scale projects fail before one comes along that will succeed, it isn’t much different from the smaller commercial space, which has a series of its own hurdles to overcome, the steepest of which are upfront capital costs and financing. In my page-36 story, “Wood Heat State of Mind,” I write about the attempted high-efficiency, low-emitting wood heat build-out underway in New York. In the article, I mention how much wood heat has grown in the state—by about 60 percent in less than a decade, but the problem is that many devices in use are inefficient and polluting. And, the use of modern wood heating in commercial and industrial applications hasn’t gained a ton of momentum. In an effort to change these things, NYSERDA’s Renewable Heat NY project is helping fund projects small and large—I detail one underway in Essex County’s Ray Brooks, that will utilize pellets in a three-boiler system to heat some government agency buildings. It is projects like this one that will demonstrate the benefits of modern wood heating for similar applications, and, with the help of stakeholders and wood head advocacy groups across the state, Renewable Heat NY will help them move forward. Other articles in this issue are about black pellet industry advances, tax code changes and the major influence feedstock supply has on a project’s success. If there’s takeaway from reading all of these stories, it’s that the people who work and believe in this industry are dedicated and determined. From every new home pellet boiler installation to every years’ long development process for a commercial bioenergy plant, they’re changing the energy landscape, one project at a time.

SENIOR EDITOR Ron Kotrba rkotrba@bbiinternational.com STAFF WRITER Patrick C. Miller pmiller@bbiinternational.com ONLINE NEWS EDITOR Erin Voegele evoegele@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 CEO Joe Bryan jbryan@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 CIRCULATION MANAGER Jessica Tiller jtiller@bbiinternational.com MARKETING & ADVERTISING MANAGER Marla DeFoe mdefoe@bbiinternational.com

EDITORIAL BOARD MEMBERS Stacy Cook, Koda Energy Justin Price, Evergreen Engineering Tim Portz, Pellet Fuels Institute Adam Sherman, Biomass Energy Resource Center Subscriptions Biomass Magazine is free of charge to everyone with the exception of a shipping and handling charge for anyone outside the United States. To subscribe, visit www.BiomassMagazine. com or you can send your mailing address and payment (checks made out to BBI International) to Biomass Magazine Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. You can also fax a subscription form to 701-746-5367. 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 701746-8385 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.

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COPYRIGHT © 2018 by BBI International Biomass Magazine: (USPS No. 5336) March/April 2018, Vol. 12, Issue 2. Biomass Magazine is published bi-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.

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Wood Becomes High-Tech, Biomass Power Gains Steam BY BOB CLEAVES

These days, wood is making a comeback. It’s hard to find a hip new restaurant—especially one that subscribes to the farm-to-table trend—that doesn’t use wood furniture, flooring or signage. Lumber and housing markets are strong, and cross-laminated timber is making it possible to build 10-story tall buildings out of wood. Our nation has never before used as much cardboard packaging, and the volume will only grow as Amazon, Blue Apron and other tech companies deliver goods straight to the doors of consumers. And beyond that, scientists in Maine and elsewhere are hard at work trying to make glass, fuel and other materials out of wood fibers, in a cost-effective way. In this new wood economy, where does biomass power fit in? Do these new products represent competition for wood fibers? The answers are very straightforward. As the end user of the lowest-value wood fibers, biomass power is and will continue to be an essential part of the supply chain, as long as we are making products out of wood, and as long as we have forests to maintain. Occasionally, we hear from elected officials or biomass detractors who want to focus exclusively on promoting the new, fashionable uses for wood. You’ll hear no arguments from us on the need for research and development, or on “making wood cool again,” but declining to support biomass as a part of the forest economy is short-sighted.

8 BIOMASS MAGAZINE |MARCH/APRIL 2018

While the power market trends have been unfavorable for biomass in recent years, we are optimistic that this won’t hold true forever. Setting aside the instability of power prices over the long term, our grid is set for some major changes in the coming years. Few in the power sector have fully taken into account the massive new electricity demand that is going to occur as electric vehicles flood the market, and as tech companies unveil fleets of autonomous electric vehicles for delivery. The demand for clean, baseload power from nonfossil fuel sources is only going to increase. Biomass Power Association has some exciting policy initiatives planned for 2018 that we hope will increase the value of the power that biomass facilities supply to the grid. If your company isn’t yet involved with our association, we’d love to hear from you, and to tell you more about how joining BPA will benefit your organization. Contact me to learn more. Author: Bob Cleaves President, Biomass Power Association bob@usabiomass.org www.usabiomass.org

Pellet Stoves and Solar Panels: the Perfect Match? BY JOHN ACKERLY

Pellet stoves are one of the cheapest ways to reduce a home’s carbon footprint. A perfect complement to solar panels, they could be pitched as part of a package for homes. But states need to start promoting them, as they do solar panels. Solar panels are the way of the future for millions of U.S. homes. But they aren’t sized to carry the heating load of most houses in the country. A pellet stove can easily provide 50 to 90 percent of the heating needs for millions of American homes with an installed price of $3,000 to $5,000. All states that have solar incentive budgets should include incentives for pellet stoves. Many with the highest incentives for solar are ideal for pellet stoves. One of the best arguments to present to states is not just that pellets are an affordable way to reduce fossil fuel use, but that they can also reduce demand for polluting wood stoves. If states had more aggressively steered people to pellet stoves over the past several decades, fewer households would have installed old, second-hand wood stoves that are then removed through expensive stove change-out programs. When the Alliance for Green Heat pushed for a rebate program in Maryland that favors pellet stoves, we presented data showing the state was funneling tax dollars to the richest households for solar panels, while ignoring middle income households that were in the market for pellet stoves. It wasn’t a fair use of taxpayer dollars. A pellet stove can reduce as much fossil fuel as a typical array of solar panels for about a third of the price. I heated my 2,000-square-foot home in Maryland with wood stoves for years. Even with dry wood and a mostly attentive operator, I was frustrated that they periodically smoked too much, especially as I wanted to be a good neighborhood ambassador for the technology. This year, I switched to a pellet stove. Now, I push a button in the morning and the stove runs cleanly all day. Every other day I add another bag of pellets, and once a week, I empty a few cups of super fine ashes from the ash tray. When I’m away, my wife or son easily operates the stove. Wood stoves are great for less populated areas, and will always have a strong following, but pellet stoves deserve incentives, and can bring in millions of new, energy-conscious consumers. The solution is for states that are pushing renewable energy to be the matchmaker. When a home installs solar panels, encourage the homeowner to add a pellet stove at the same time. Combine the financing. The basic, underlying problem is that solar PV has skyhigh brand recognition, and powerful advocacy groups behind it. They need it, and deserve it. But we also deserve a place at this table. We will only get it if we demand it, and consistently make the case for pellet stoves.

A key element to incentive programs that always trips up stove industry associations is that states don’t like to give rebates to every model appliance. Incentives are for the cleanest and most efficient appliances, and until industry can embrace that, it will be harder to build cohesive and coherent campaigns to be part of state rebate programs. There are six barriers in our community, and some are partially self-imposed. All can be overcome through strategic partnerships and messaging. 1. By nature, the industry association representing pellet stoves is all-inclusive of all its members, and doesn’t push pellet stoves over wood stoves, or even over gas stoves. 2. The U.S. EPA regulates for air quality, and doesn’t publicly favor cleaner certified appliances over dirtier certified appliances. 3. The two pellet associations, BTEC and PFI, mainly represent fuel producers, not the stove manufacturers. They have broader goals, and typically don’t push one end use of pellets over another. 4. Some state and regional groups are mostly concerned about using pellets locally, which means focusing on residential, commercial and institutional bulk deliveries. Bagged pellets could come from Canada, or more distant states, and thus represent a threat to the local pellet industry. 5. Programs that push pellet stoves are mostly change outs that require a household to remove an old, uncertified wood stove. This limits the market far too much when states should offer incentives to any home to add a pellet stove. 6. The movement pushing for pellet heater incentives has focused on pellet boilers, resulting in a successful effort to get most northeastern states to subsidize boilers. These are vital programs that we support 100 percent, but they could also include stoves. These barriers are part of our landscape, but far from insurmountable. A first step would be to gather key stakeholders in our community, and target one or two states. We need good materials, and a concerted effort to meet with key players in a multiyear effort. Low oil prices and warm winters are among the biggest barriers to rapid growth of the pellet stove sector. State support only goes so far, but it brings other benefits with it. If pellet stoves are not more widely accepted as a key part of the renewable energy future in the next decade, they may be indefinitely relegated to the part of a bit player. There is not much time to lose. Author: John Ackerly President, Alliance for Green Heat jackerly@forgreenheat.org 301-204-9562

BIOMASSMAGAZINE.COM 9

Tax Act May Spur More Investment in RNG, Biogas Projects BY DOUG LAMB AND DURHAM MCCORMICK

The Renewable Fuel Standard is the primary federal policy that drives development of renewable natural gas (RNG) projects. Since the advent of the RFS’s modern cellulosic biofuel provisions in 2014, new investment in RNG projects has grown steadily. The number of online RNG projects has increased from approximately 45 in early 2015 to at least 65 by the end of 2017, with another 21 presently under construction, according to the Coalition for Renewable Natural Gas. The RNG industry made these gains despite the 2016 expiration of a host of temporary tax provisions designed to spur renewable energy development, including the Section 45 production tax credit for nonwind renewable energy technologies such as landfill gas projects, the second-generation biofuel credit, and the tax credit for alternative fuel vehicle refueling property. While the tax code is clearly not responsible for a bulk of the current boom in RNG, the recent tax reform signed into law at the end of 2017 may very well be an additional catalyst to help spur RNG investment to new heights. The Tax Cut and Jobs Act, H.R. 1, reduces corporate and individual tax rates. It provides noncorporate owners a new, 20 percent deduction for qualifying business income for pass-through entities. But it is the Tax Act’s less-known provisions that may make the difference for owners and developers of biogas and RNG projects. First, the recently enacted tax bill provides for 100 percent bonus depreciation. This new provision allows businesses to fully deduct the cost of new equipment or other depreciable property with recovery periods of 20 years or less. To qualify for 100 percent bonus depreciation, the qualified property must have been acquired after Sept. 27, 2017, and be placed in service before Dec. 31, 2022. After 2022, bonus depreciation is reduced by 20 percent each year, until fully phased out at the end of 2026. Additionally, 100 percent bonus depreciation can also be claimed on “used” property that is new to the taxpayer (and not acquired from a related entity), which will allow acquisitions of existing facilities to claim 100 percent bonus deprecation. Watch for RNG facilities changing owners in 2018 and beyond, as investors look to take advantage of the new rules. For biogas and RNG facility owners, 100 percent bonus depreciation means a new ability to receive major tax advantages when they purchase new or used equipment to upgrade their facility. New tax-favored investments in treating equipment, for instance, can be used to convert an on-site electric project to a RNG project selling gas into the transportation fuel market. Other tax-favored investments might include equipment that improves plant efficiency, or greater gas flow from well-field collection.

10 BIOMASS MAGAZINE |MARCH/APRIL 2018

Second, new net operating loss (NOL) provisions provide added value in future years. While NOLs can now only be used to offset up to 80 percent of taxable income, without any ability to carry back NOLs to prior tax years, unused NOLs can be carried forward indefinitely. This means losses incurred in the construction or retrofit of a RNG facility one year can provide tax benefits in future, more profitable years. Third, H.R. 1 gives and takes away as it eliminates several tax advantaged financing provisions. The canceled Clean Renewable Energy Bonds and Qualified Energy Conservation Bonds previously provided numerous options for financing landfill gas to electricity, biogas production and related projects. New opportunities arise, however, as the Tax Act also eliminates the corporate alternative minimum tax. This provides a significant marketability enhancement for private activity bonds, including solid waste disposal and sewage disposal bonds that are often used for biogas and RNG projects. The Tax Cuts and Jobs Act added a new financing feature named “Opportunity Zones.” Gains on investments in funds using the investments for certain purposes in these opportunity zones are eligible for deferral of gain recognition for up to nine years (and possibly longer in some cases, for certain long-term investments). The funds must be certified by the U.S. Treasury. The zones are required to be designated in each state by its governor, and are based off the low-income census tract data similar to that used for, among other things, new markets tax credits. These recent changes in tax law will have an impact for RNG project stakeholders. Developers and investors looking to acquire or upgrade RNG and biogas projects should find plenty to like in the Tax Act in 2018 and beyond. The Treasury will issue further guidance on these and other tax policy changes that were included in the Tax Cuts and Jobs Act. RNG stakeholders should stay abreast of this forthcoming guidance to ensure they are optimally positioned as the provisions from the tax reform bill take effect. This article was written with support by the Coalition for Renewable Natural Gas. The legal changes summarized are presented merely to alert the reader to the existence of such changes only, intentionally without citation. Significantly, the foregoing information does not constitute legal advice and any use of this information is subject in all respects to the advice of any user’s tax advisor. Contact: Marcus Gillette Director of Public Affairs, Coalition for Renewable Natural Gas 916-588-3033 Rngcoalition.com

Long Road for Biofuels Industry BY MICHAEL MCADAMS

This year is setting up to be a long year for the biofuels industry. First on the agenda is the fate of the biofuels tax extenders, including the biodiesel blenders, renewable diesel credit, second-generation and alternative fuels credits, which all expired at the end of 2016. These incentives were left in suspended animation in December as Congress passed a continuing resolution to keep the government funded through January, without addressing any of the numerous expired energy provisions. As I wrote this column, Congress delivered a retroactive extension for these extenders through 2017, but, again, left 2018 unaddressed. It appears that companies are considering options to attempt to extend the credit through 2018, though this will be an uphill battle, given both the cadre of Republican members who would rather see the credit lapse, and the White House’s stated opposition to including extenders in the budget deal. Moving on from tax, we’ve seen a flurry of recent press stories about the RFS’s role in bankrupting Philadelphia Energy Solutions. If you ask me, the headlines should read “Don’t let the facts get in the way of a great story.” However, members of Congress are now inquiring about the alleged situation, and, if it is true, what they should do about it. Indeed, the American Fuel & Petrochemical Manufacturers continue to lead the charge to repeal or gut the RFS, aiming to lower refiners’ compliance costs (see last year’s efforts on the NODA and point of obligation). Moreover, more than 20 small refiners have now asked for waivers to avoid complying with the RFS program. With small refiners comprising over 10 percent of the market alone, there is great concern about how many obligated parties the EPA could excuse from 2018 compliance obligations. I applaud Bob Dinneen and the Renewable Fuels Association for their memo directed at the administration calling for increased transparency and clarity on the criteria for granting these waivers. We also begin the year knowing that we will need to go through the RVO setting process for 2019. In last year’s RVO, I was particularly disappointed by the reduction in the cellulosic pool, both in the overall number, as well as the liquid fuels number. I hope we will make improve-

ments on both of these numbers in 2019. Furthermore, we will need to ensure the numbers accurately reflect the opportunity to grow both the biomass-based diesel and advanced pools. In the wake of the U.S. Department of Commerce’s decision to impose hefty duties on biodiesel imports from Argentina and Indonesia, we must be vigilant in watching as countries may seek to create reciprocal barriers to entry for U.S. exports, in efforts to protect their own markets. The ethanol industry exported over 1 billion gallons last year, and this could increase to nearly 1.5 billion gallons in 2018. As such, we must strike the right balance on global trade policy, maintaining our ability to play both at home and abroad. Finally, in the short-term, we can expect to see movement on Capitol Hill to reform the RFS. Efforts are already afoot to develop compromise RFS reform legislation. Although the 2018 congressional calendar makes for a short legislative year, I anticipate seeing several different bills dropped by the end of March. It is still too early to predict the contents of such proposals, though it is safe to say the price of the conventional D6 RIN is among the primary drivers in the debate. I also expect the nation’s largest environmental organizations to raise issues such as feedstock use and environmental performance. ABFA is actively engaged in these efforts, tracking the interests of the various stakeholders in play. I usually close these columns by touching on the U.S. EPA’s administrative agenda. Unfortunately, at this point, it is difficult to forecast what—if anything—the EPA is planning to take on this year. The industry did a great job uniting in 2017 to beat back proposals such as the NODA and shifting the point of obligation. Per usual, I urge all of you to stay engaged, and ready to make your views known if additional threats emerge. I’m sure this year will hold new surprises, so stay tuned. Author: Michael McAdams President, Advanced Biofuels Association michael.mcadams@hklaw.com www.advancedbiofuelsassociation.com

BIOMASSMAGAZINE.COM 11

Farm Bill Energy Title’s Record of Success BY FLOYD RITTER

A Congressional staffer in Washington, D.C., recently asked me to remind her what the Farm Bill Energy Title programs do. I often tell policymakers about the broad economic stimulus and impact these programs have at the national level. Perhaps I should also tell them about the positive outcomes these programs provide for individual citizens, businesses and rural communities in every state. Take the Biobased Markets Program as an example. The BioPreferred program sets purchasing requirements for federal agencies and contractors, and provides product manufacturers voluntary labeling and certification. The program now includes 97 federal purchasing categories, listing about 15,000 biobased products. Additionally, the USDA Certified Biobased label now appears on more than 3,000 products. More than 1.5 million American workers produce biobased products, generating over $127 billion in sales. Those impressive national statistics are made up of lots of individual success stories, including: • Cortec Corp. in Saint Paul, Minnesota, lists 34 biobased lubricant and corrosion protection products in the BioPreferred catalog. The biobased products show Cortec’s commitment to a sustainable environment. • Ambertech in Paris, Texas, produces certified, 99 percent-biobased, biodegradable lubricants that are used in automotive, industrial, marine, mining, aviation, energy, drilling, manufacturing, transportation, construction and agriculture industries. The Section 9003 program works with rural lenders to secure financing for companies to build biorefineries that produce renewable chemicals, biobased products and advanced biofuels. This program uniquely focuses on projects that combine first-of-a-kind technologies and agricultural raw materials. The program’s successes are real, and there are plenty of examples: • Fulcrum Sierra Biofuels is building a biorefinery in Storey County, Nevada, that will annually convert 147,000 tons of municipal solid waste into jet fuel. When USDA approved this facility for a loan guarantee, Cathay Pacific Airways negotiated a 10-year offtake agreement with Fulcrum. • Biosynthetic Technologies in California is working with a rural lender to finance construction of a commercial manufacturing plant that will produce 20 MMgy of biobased motor oils, industrial lubricants, and cosmetic ingredients. The Rural Energy for America Program provides grants and loan guarantees to the broadest spectrum of energy efficiency and renewable energy technologies, including infrastructure for wind, solar, geothermal, bioenergy, biogas and biofuels. More than 13,000 projects in all 50 states have received REAP awards since the 2008 Farm Bill, leveraging more than $3 billion in private investment. The program has a growing record of successes, such as: 12 BIOMASS MAGAZINE |MARCH/APRIL 2018

Reinford Farms in Mifflintown, Pennsylvania, used the REAP program to build a biodigester to process manure from 630 dairy cows, including cows from neighboring farms. The Reinfords save money by using the biodigester’s heat to pasteurize milk, dry feed corn and heat all of the farm’s buildings and hot water. They earn additional revenue by selling back biogas. • Since starting a REAP-funded energy audit program, the University of Georgia in Athens has helped over 1,000 poultry houses on 50 farms lower energy costs by identifying high-impact efficiency upgrades. The Biomass Crop Assistance Program provides matching payments to farmers who produce and deliver dedicated energy crops to next-generation biorefineries that generate heat, power, renewable chemicals, biobased products and advanced biofuels. BCAP has supported nearly 1,000 growers to establish dedicated, nonfood energy crops on nearly 49,000 acres. Importantly, BCAP also supports hazardous fuels removal from forests to reduce the threat of catastrophic wildfires. There are success stories from around the country: • Aloterra worked with farmers in Northeast Ohio and Northwest Pennsylvania to establish 5,000 acres of a perennial grass on idle cropland. Aloterra secured $20 million in private funds—$4 in private capital for every $1 in federal funds—to build two manufacturing facilities in Ashtabula County, Ohio, creating more than 60 full-time jobs in the region. • Mt. Taylor Manufacturing is a partner in forest restoration and hazardous fuels reduction in the Cibola National Forest in McKinley and Cibola counties in New Mexico. MTM employs 42 people, including local Navajo tribal members, and creates an additional 18 jobs for local logging companies. • Rather than grind up corn stover or plow it back into the field, Emmetsburg, Iowa, farmer Jay Gunderson bales and delivers it to the Project Liberty cellulosic ethanol plant. Without the BCAP program and contract from Poet-DSM, Gunderson says, the stover wouldn’t get harvested. The Farm Bill Energy Title programs represent onetenth of a percent of the overall bill’s cost. Yet, they have such a huge impact on rural economies—diversifying crops, sustaining and creating jobs, new industries and supporting new technologies. Whether measured in national impact or individual stories, the value of these lowcost programs is undeniable. Author: Lloyd Ritter Director, Ag Energy Coalition 202-215-5512 www.agenergycoalition.org

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Business Briefs PEOPLE, PRODUCTS & PARTNERSHIPS

Babcock & Wilcox names new CEO

Babcock & Wilcox Enterprises Inc. has appointed Leslie C. Kass CEO, successor to Jim Kass Ferland, and a member of the company’s board of directors. Kass has more than 20 years of engineering, operational and site-level leadership experience with a number of energy and power companies, along with a strong background and acumen in working with the financial community, shareholders and potential investors. She has held a number of roles of increasing responsibility since joining B&W in 2013, most recently leading B&W’s industrial segment. Before joining B&W, Kass held a number of engineering and project management-related positions

of increasing responsibility with Westinghouse, Entergy and Duke Energy.

Adams joins BTEC board

Maura Adams, program director for the Northern Forest Center, has been elected to the Biomass Thermal Adams Energy Council board of directors. Adams will join the group of thermal biomass industry partners, advocates and stakeholders in advancing the sustainable use of wood and agricultural biomass for clean, efficient heat and combined heat and power. The Northern Forest Center stated it is thrilled for Adams as she joins the board, and added that her experience, expertise and determination will serve BTEC and its members well.

Pinnacle Renewable Holdings completes IPO in Canada

On Feb. 6, Canadian pellet producer Pinnacle Renewable Holdings Inc. announced the successful closing of its initial public offering (IPO) and secondary offering of its common shares. The common shares began trading Feb. 6 on the Toronto Stock Exchange under the symbol “PL.” The company announced plans to file for an IPO in December. The offering included a treasury offering by Pinnacle and a secondary offering of common shares by certain existing shareholders at a price of $11.25 per common share. Pinnacle sold more than 6.22 million common shares for a total gross proceeds of approximately $70 million. The selling shareholders sold more than 7.11 million common shares for a gross total proceeds of approximately $80 million.

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Pinnacle currently operates six pellet facilities, located in the British Columbia cities of Armstrong, Williams Lake, Meadowbank/Hixon, Houston, Burns Lake, and Lavington. The company also has a port terminal and new production facilities under development in Entwistle, Alberta, and Smithers, British Columbia.

Duke Energy renews contract with biomass energy producer

Duke Energy has renewed a long-term power purchase agreement with a 50-MW biomass facility in North Carolina, continuing the company's pursuit to diversify its electricity mix with biomass and alternative energy. Craven County Wood Energy in New Bern is a 24/7 baseload plant that supplies enough power annually to satisfy the energy needs of more than 30,000 homes.

The facility uses mainly wood waste and poultry (turkey) waste to generate electricity. Throughout its 25 years of operation, the facility has been upgraded to use more poultry waste—going from 10 percent to 25 percent currently. It has plans to go as high as 30 percent. Duke Energy will buy 100 percent of the energy and associated renewable energy certificates from the facility.

Enerkem raises largest financing round, adds new investors

Enerkem Inc., a waste-to-biofuels and chemicals producer, announced it has completed a C$280 million ($222.82 million) investment round—its largest to date. In addition to new investors BlackRock and Sinobioway, existing investors also participated in this financing.

Existing Enerkem investors include Rho Ventures, Braemar Energy Ventures, Waste Management of Canada, Investissement Québec, Fonds de solidarité FTQ, Cycle Capital, Fondaction, The Westly Group, and the National Bank of Canada. BlackRock is a global leading investment management corporation, managing close to $6 trillion in assets on behalf of investors worldwide. Sinobioway is a leading Chinese company engaged in the bioeconomy. This industrial group, affiliated with Peking University, primarily invests in bioenergy, bioenvironmental protection, biomedicine, bioagriculture, bioservice, biomanufacturing and biointelligence. National Bank Financial Inc. and Scotia Capital Inc. served as financial advisors to Enerkem.

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FutureMetrics, Prodesa form partnership

Pellet plant design/ builder Prodesa and pellet industry consultant FutureMetrics are Swaan teaming up under a new partnership agreement. Under the agreement, FutureMetrics operations expert, John Swaan, will lead a team that trains the operators of new Prodesa pellet plants throughout the startup and commissioning phases of the project. Prodesa’s world-class EPC offering, and track record of successful pellet mills designed and built in Europe, the U.S., and Asia, is well complimented by FutureMetrics’ operational expertise gained from Swaan’s decades of experience in producing wood pellets. That knowledge and wis-

dom will be applied to Prodesa’s state-ofthe-art new pellet plants to ensure that the operators have the shortest learning curve possible to reach safe and stable operations while producing high-quality wood pellets.

NHWEC report shows modern wood heat delivers significant savings

New data from New Hampshire Office of Strategic Initiatives Fuel Price Survey, dated Jan. 23, confirms wood pellets are 48 percent lower heat cost than No. 2 heating oil, and 121 percent lower heat cost than propane. This analysis considers energy content of fuel, moisture content of fuel, and average fuel utilization efficiency of modern boilers. An average homeowner using 800 gallons of heating oil per year can save $734 on their heating bill by switching to wood pellet

fuel. The same homeowner using 1,200 gallons of propane can save $2,398 by switching to wood pellets, according to Maura Adams, program director with the Northern Forest Center. The NH Public Utilities Commission currently offers rebates on fully automated residential wood pellet boilers of 40 percent of the installed cost, up to $10,000. In addition, the NH Wood Energy Council provides detailed information on equipment suppliers and installers to streamline the process.

Construction begins at largest US on-farm dairy RNG project

Renewable Dairy Fuels, a business unit of AMP Americas, announced that construction is underway on the country’s largest on-farm anaerobic digester-to-vehicle

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fuel operation. Located in Fair Oaks, Indiana, the dairy project will be the company’s second biogas facility producing renewable natural gas from dairy waste for transportation fuel. Amp Americas received the first dairy waste-to-vehicle fuel pathway certified by California's Air Resources Board (CARB) for its first RNG project at Fair Oaks Farms in northwest Indiana. The project was also awarded a Carbon Intensity score of -254.94 gCO2e/MJ, the lowest ever issued by CARB. The new facility will be 50 percent larger than RDF’s operation at Fair Oaks Farms, and will be operational this summer. The site is located in Jasper County, Indiana, just a few miles from Fair Oaks Farms. Every day, three digesters located at three dairy farms will convert 950 tons of dairy waste from 16,000 head of milking cows into

RNG, which will be injected into the NIPSCO pipeline.

BP Verenium Biofuels PHOTO: AARON EQUIPMENT

BP Verenium Biofuels plant up for sale

The BP Verenium Biofuels plant in Jennings, Louisiana, is being offered for sale. The 1.4-MMgy demonstration-scale

facility celebrated its grand opening in 2008, and was acquired by BP Biofuels North America in mid-2010. On Jan. 30, Aaron Equipment Co., in conjunction with Reich Brothers and Phoenix Equipment Corp., announced it had acquired the BP Verenium Biofuels plant, including more than 40 acres of real estate and equipment. The group said it plans to first offer the plant in its entirety and then piecemeal to the buying public. According to information released by Aaron Equipment, the liquidation sale began in January and will run through the end of the year. Among the equipment up for sale are 316 stainless steel fermenters, 316 stainless steel tanks, stainless steel reactors, shells, tubes, screw presses, decanter centrifuges and hydrolyzers, spiral and plant heat exchangers and an unused DAF system.

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Powering Paradise

A decade of project development for Honua Ola Bioenergy, formerly known as Hu Honua, on the big island of Hawaii nears completion. Once operational, the biomass power plant will push the state closer to its long-term goal of 100 percent renewable energy independence. BY RON KOTRBA

As construction on the 30-MW Hu Honua Bioenergy plant in Hawaii nears completion, the project has changed names to reflect a new phase in its existence. For nearly 10 years, Hu Honua, which translates as “to spring forth from the earth,” was appropriate, but Honua Ola, or “living earth,” better captures its 30-year commitment to produce sustainable power from eucalyptus trees. PHOTO: HONUA OLA BIOENERGY

BIOMASSMAGAZINE.COM 21

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orld-class beaches, waterfalls, palm trees and tropical canopies, luaus, vacation resorts and memories to last a lifetime—these clichéd images of Hawaii may arise when mainlanders envision trips to the paradise archipelago encircled by the vast Pacific Ocean, but exactly how to power this paradise of dreams is likely a thought little explored by most visitors. Hawaii’s economy is rather diverse, according to the Department of Business, Economic Development and Tourism, but as one might expect, the No. 1 industry in Hawaii is tourism. To keep the wheels of tourism turning, and to protect its natural beauty, Hawaii must reduce its dependence on imported oil. The state’s major utilities consist of Hawaiian Electric Company Inc. (HECO) and subsidiaries Maui Electric and Hawaii Electric Light (HELCO), which provide electricity to 95 percent of Hawaii’s people—every populated island except Kauai, says Peter Rosegg, Hawaiian Electric senior spokesman. “Hawaiian Electric has been a leader in renewable energy since the 1970s when we installed some

of the first modern wind turbines in demonstration projects funded by the federal government,” Rosegg tells Biomass Magazine. “And 10 years ago, the Hawaiian Electric Companies joined the state of Hawaii and the U.S. DOE in creating the Hawaii Clean Energy Initiative.” The partnership brings together business leaders, policymakers and residents committed to energy independence. According to HCEI, which is celebrating its 10th anniversary this year, Hawaii is the most fossil fuel-dependent state in the nation. Rosegg says when the initiative was launched, renewable energy used by Hawaiian Electric Companies’ customers was about 8 percent. “Today, it is 27 percent,” he says. “Our [Renewable Portfolio Standard] mandate for electricity is 30 percent by 2020, 40 percent by 2040, 70 percent by 2040 and 100 percent by 2045.” Rosegg says the utility has a Power Supply Improvement Plan that lays out a five-year action plan and long-term roadmap to reach this goal. The utility and state take an all-of-theabove approach to renewables, Rosegg says,

22 BIOMASS MAGAZINE |MARCH/APRIL 2018

adding that Hawaii has multiple renewable resources that can be used to create electricity—wind, sun, geothermal, ocean, some runof-river hydro, and waste streams. “They all have values and uses,” he says. “After decades of reliance on fossil fuels and oil in particular, we want a portfolio of renewable resources.” Biomass technologies—including direct burn, waste to energy, and biofuels—have a healthy stake in that portfolio. “We have a strong biomass tradition that goes back to the days when sugar was king in Hawaii and biomass from dozens of sugar mills was used to create electricity,” Rosegg says. “Today, much of that sugar and pineapple land is fallow, and could be used for energy crops. We supported research into biofuel crops that could be grown locally, and we tested our baseload generators that use low-sulfur fuel oil to see how large a percentage of biofuel could be blended without losing heat rate and capacity. We support a plan, unfortunately rejected by regulators as too expensive at the time, for a project on Hawaii Island called ‘Aina Koa Pono,’ which proposed to grow fuel crops on fallow sugarcane

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land and create electricity by high-tech methods. We have cooperated with a number of other efforts to promote biofuel crops as part of agricultural diversification and greater food self-sufficiency.” On Oahu, the Hawaiian Electric Companies buy power from a waste-to-energy plant operated by Covanta for the city and county of Honolulu. They also own and operate the 110-MW Campbell Industrial Park generating station, which is powered by biodiesel. “And we operate an 8-MW emergency generation fuel facility owned by the state department of transportation airport division that is fired with biofuel,” Rosegg says, “and we are constructing and will operate the 50-MW Schofield Barracks generating station that will use a 50/50 blend of biodiesel and diesel.” He adds that most of the biodiesel to run these facilities comes from Pacific Biodiesel, a Hawaii-based biodiesel producer that uses locally grown crops and waste oil collected as feedstock, but the utility also has a supply agreement with Renewable Energy Group Inc., the largest North American biodiesel producer based in Iowa

with 11 active U.S. plants whose annual production capacity nears half-a-billion gallons. “The Hawaiian Electric Companies have to be at the center of any effort to reduce our dependence on imported oil, reduce our energy emissions and use the most renewable energy possible,” Rosegg says. “Hawaiian Electric Companies envision biomass and biofuel to be significant parts of our energy mix well into the future. Reaching our 100 percent renewable energy goal will require attracting companies to invest in renewable energy projects throughout the islands.” One such investment project is nearing completion after a decade of developmental struggles.

Living Earth

Construction continues at a fast clip in Pepeekeo on the big island of Hawaii for Honua Ola Bioenergy—formerly Hu Honua Bioenergy—a 30-MW biomass power plant project that has roved through a series of setbacks and achievements over the past 10 years. In 2010, the organization got its first air permit hearing on the docket. The air permit to retrofit an old

EUBCE 2018

sugar mill power plant, run on coal after sugar operations ceased, was granted the following year. That same year, Hu Honua was removed from a lawsuit in which the plaintiffs bought land near the site under the alleged promises or misrepresentations by the former plant owner and realtor that the facility would never operate again. Later that year, site work began, and in 2012, Hawaii Electric Light signed a power purchase agreement (PPA). On March 1, 2016, that PPA was canceled by the utility after $137 million was already spent completing roughly 50 percent of the construction and retrofitting work. Later that year, a lawsuit was filed by Hu Honua regarding the PPA termination. Then, in May 2017, Hu Honua and HELCO came to terms on a new PPA that was approved two months later by the Public Utilities Commission. As a result of this new agreement, construction restarted last summer and is in full swing. The owners expect operations to commence late this year. “As our project enters a new phase, we decided to bestow upon it a new name,” says Warren Lee, the new president of Honua

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Ola Bioenergy. Lee, a retired lieutenant colonel from the U.S. Army Reserve who served 26 years, began his career at Hawaiian Electric Company where he worked in engineering and production for two decades. He then took on an executive role with Hawaii Electric Light—the electric utility for the Island of Hawaii—and served as president of HELCO for 18 years. Next Lee joined the public sector, where he completed two four-year terms as Hawaii County director of public works. In late 2017, he joined the Hu Honua Bioenergy team as president. “Honua Ola means ‘living earth’ and represents the symbiotic cycle of what the earth gives us,� Lee tells Biomass Magazine. “The earth provides trees that Honua Ola will turn into energy to power our daily lives. As we replant the trees, we keep the cycle balanced. We give back what the living earth gives us, and in the process we also give back to our community with jobs and ancil-

Eucalyptus trees on the big island of Hawaii, which replaced sugarcane after the state’s sugar industry declined, will provide sustainable feedstock for the Honua Ola biomass power plant once construction is completed later this year. PHOTO: HONUA OLA BIOENERGY

lary opportunities.� Lee says Hu Honua, which means “to spring forth from the earth,� was a fitting name during project development of the biomass facility. “But as we look forward to 30 years of providing energy to Hawaii Island,� he says, “we have chosen a name that better represents the sustainability inherent in the Honua Ola method of producing power.� Five guiding principles motivate the Honua Ola team. “The current ownership assembled a team built around the guiding principles of the project,� Lee says. “One, ratepayers come first. Two, jobs, jobs, jobs, as we help create 190 permanent jobs on the island. Three, producing 100 percent renewable energy. Four, jumpstarting a forestry industry on Hawaii Island. And five, being a good neighbor and an integral part of our community.� Lee says through cycles of achievements and setbacks over the years, the vision of the project has not changed.

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“The ownership has changed for various reasons,� he says. After bouts of project turmoil, including cancelation of a previously approved contract with HELCO, a highly focused agenda emerged: To reestablish the PPA, get approval from the PUC, and complete construction of the plant by the end of 2018. “Two of those three things have been accomplished,� Lee says, “and we are well on our way to completing construction.� Previous setbacks in construction led to cancelation of the original PPA, and a subsequent lawsuit. “The lawsuit was a dispute over the way in which the original PPA was terminated,� Lee explains. “However, the establishment of a new PPA and the progress toward a fully functional plant has put that lawsuit to the side. We are very pleased to be working closely with the utility to bring renewable energy to Hawaii Island without having to handle our disputes in court.� For an independent power producer like Honua Ola, a PUC-approved PPA is mandatory. “Our plant is on an island,� Lee says. “There is only one electric utility on the island, so therefore, we have only one customer to whom we could sell the power we produce. Our PPA is our contract to sell electricity to HELCO. Given that the utility is regulated, the PUC approval is the state government’s approval that the contract is fair to both companies and—most importantly—to HELCO customers.� Since the PPA had previously been approved by the PUC, the commission determined the procedural schedule for the reapproval could be accomplished in an expedited manner, allowing both parties to come to a resolution with minimal time wasted. “It worked and was a superb example of efficient government processes,� Lee says. “We are now focused on building the plant that will generate up to 30 MW of electricity for HELCO customers. All other details between HELCO and Honua Ola have been worked out, and we’re working together to make this project a reality.� Honua Ola will provide base-loaded power on demand to the HELCO grid in return for a fixed capacity payment. Energy payments are based on dispatch, Lee says. The expedited procedural schedule will help Honua Ola complete construction, connect to the grid and begin operations by the end of this year, which is vital to qualify for the federal investment tax credit for renewable

energy—only intensifying the urgency to finish the project. “The tax credit is a federal incentive specific to biomass power plants,� Lee says. “Honua Ola will qualify for this incentive if the plant is complete and connected to the utility by end of 2018.�

Feedstock

East Hawaii Island, where the plant is located, was once a center for the sugar industry, with thousands of acres planted with sugarcane. “As the sugar industry went by the

wayside, the state, county and local landowners decided to replant some of this agricultural land with eucalyptus trees in the hopes of establishing a vibrant forestry industry for the island,� Lee says. “For two decades, many of these stands of trees have been untouched, despite being at maturity. As a species, eucalyptus is ideal for biomass feedstock—especially in Hawaii. In our climate, these trees grow straight and tall and reach harvestable size in approximately seven years. They are also an efficient choice for combustion at the plant.�

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As seen in this computer-generated rendering, the systems at work in the Honua Ola plant come together with elegant precision to generate 30 MW of sustainable base-load power to Hawaii’s grid. IMAGE: HONUA OLA BIOENERGY

Lee says depending on utility demand, Honua Ola will harvest approximately 2,000 acres a year and will work with its wood suppliers and forest managers to replant as many acres as it harvests. “We will be able to process whole trees or slash—the leftovers from other forestharvesting businesses,” he says. “We recognize that both options help to jumpstart the forestry industry on the island. Alone, Honua Ola expects to create 70 full-time jobs in forestry. Ideally, we’d like to see other new entrants into the forestry industry as well, creating more jobs and allowing our plant to symbiotically process the leftover materials and use it to generate power.”

Process

Chipped or whole log eucalyptus feedstock will be delivered to Honua Ola. General Manager Kevin Owen says the logs will be staged in a storage yard until they are processed through the Morbark chipper that will produce 2”x2”x3/8” wood chips. “Both the processed and purchased chips will be conveyed to the chip storage building that houses about 5,600 tons of chips,” Owen tells Biomass Magazine. “From the chip storage building, the metered chips will be conveyed to the boiler building for the final step before combustion. With decades of experience in wood handling equipment, Process Barron has engineered and supplied a solid and reliable wood handling system.” A Babcock & Wilcox boiler at the facility was originally designed for sugarcane bagasse and then converted to coal years later. Owen says Honua Ola hired ESI Engineering to retrofit the boiler for use with 100 percent woody biomass that will fire up on biodiesel, and switch to 100 percent wood fuel. The boiler, rated at 300 kilopascals per hour and 1,250 pounds per square inch, will supply steam to the newly purchased turbine generator manufactured by Shin Nippon Machinery Co. Ltd. “The generators export power to the island’s grid and will supply up to 30 MW, 21.5 MW of which are committed, and a minimum of 10 MW during periods of low demand,” Owen says. “The exportation of power was designed by Power Engineers and ACSI to deliver 13.8 kilovolts (KV) of power via an underground duct

26 BIOMASS MAGAZINE |MARCH/APRIL 2018

CONSTRUCTION¦

bank to the step-up transformer, at which it is exported at 69 KV to the HELCO grid.” The emissions control system was also designed by ESI Engineering to provide the best available technology (BAT) and achieve the lowest emissions possible. Gas will flow from the boiler and through a dust collector, then an electrostatic precipitator supplied by PPC Industries, followed by a selective catalytic reduction system and finally a bag house before exiting the 140-foot stack, Owen says. These systems help minimize particulate matter, nitrogen oxide and carbon monoxide emissions. The effluent will be monitored through a Trace Environmental Systems continuous emissions monitoring system.

Finish Line in Sight

The primary challenges of this project are formidable, as Lee suggests, but given the hurdles already overcome throughout the past decade, they are by no means insurmountable. To put them succinctly, these challenges are completing construction on time and budget, and meeting the PPA requirements. Were it not for a close working relationship with the Hawaiian Electric Companies, federal incentives, and the oversight and support of the state and county of Hawaii, this project named after the living earth might have very well died on the vine. “Federal and state tax credits and other financial incentives obviously work for investors who wish to undertake a capital-intensive venture in renewable energy,” Lee says. “Additionally, the state of Hawaii has already taken a major step toward expediting these projects by setting strict renewable standards with a dedicated timeline. Elected officials, in particular, have played an outsized role expressing their constituents’ overwhelming desire to have a renewable source of energy to replace fossil fuel-burning plants.” This is, of course, in accordance with the state’s goal to be 100 percent renewable by 2045—“a goal that we are proud to help advance,” Lee adds. He also expresses gratitude for the labor unions. “They helped us build a capable workforce made up of local laborers and technical experts to build the plant.” The success of this project translates to increased base-loaded renewable energy to the HELCO grid, stable electricity pricing, economic growth for the forest industry and the community. “This project is important for Hawaii in many ways,” Lee says. “For sustainability, Honua Ola is providing 30 MW of 100 percent renewable energy to help the state meet its goals. For the local economy, the plant and the related activities will create 190 permanent jobs statewide. For the Hamakua Coast—where the plant is located—Honua Ola will jumpstart a long-stagnant forestry industry. For local utility customers, Honua Ola will lower electrical bills. And as a good neighbor, Honua Ola will play a strong social responsibility role for our community and neighbors.” Author: Ron Kotrba Senior Editor, Biomass Magazine 218-745-8347 rkotrba@bbiinternational.com

BIOMASSMAGAZINE.COM 27

¦PROJECT DEVELOPMENT

FROM CONCEPT to Construction Fiberight’s new Maine waste-to-energy plant has persevered development challenges, and will soon turn the waste of over 100 communities into biogas and compost. BY PATRICK C. MILLER

Infrastructure work on Fiberight's waste-to-energy plant at Hampden, Maine, began in 2016. Construction on the main building started in August 2017. PHOTO: FIBERIGHT

L

ater this year, a new waste-to-energy plant built by Fiberight LLC in Hampden, Maine, will begin processing trash from 115 communities in the state, marking a milestone in the conversion of municipal solid waste (MSW) into a renewable biofuel source. If all goes as planned, Fiberight’s new facility will be

completed in May and optimized by year’s end, converting more than 180,000 tons of MSW into biogas and other new products. The company expects just 20 percent of the waste to go to landfills, saving the communities involved more than $2 million a year. The participating Maine municipalities are part of a

28 BIOMASS MAGAZINE |MARCH/APRIL 2018

nonprofit joint venture group known as the Municipal Review Committee (MRC). Formed in 1991, the organization’s goal is to ensure long-term, affordable and environmentally sound waste disposal service for its members. In February 2015, the MRC board of directors approved an agreement with Fiberight to plan for the develop-

ment of a new waste-to-energy facility near Hampden. “Getting a project across from the conceptual stage to actually financing to construction is a huge effort,” says Michael Burns, who heads Novozymes’ biorefining business development for the Americas. “It’s obviously a very important step for the industry.”

PROJECT DEVELOPMENT¦

Construction on Fiberight's Hampden facility was delayed by harsh winter weather in the Northeast. However, the company expects the building to be completed in March and equipment installation to start in April. PHOTO: FIBERIGHT

Novozymes’ Biotech Platform

Burns works out of Novozymes corporate U.S. headquarters in Franklinton, North Carolina. He specializes in the use of a biotechnology platform that breaks down pulp through hydrolysis—a process that will be used in Fiberight’s new plant. “We have technologies that can help in other parts of the facility,” he adds. “We also have a second-generation yeast technology that can help turn the broken-down

biomass—after it’s been hydrolyzed—into refined products.” Novozymes has been a strategic partner with Fiberight—headquartered in Bethesda, Maryland—since 2009. Burns has been working with company CEO Craig Stuart-Paul and Steve Davey, its chief operating officer, on the Maine project for more than two years. He commends Fiberight’s team with getting the plant to the construction stage and for planning the operations

beyond. “All plants are unique in their own way,” Burns notes. “One thing that stands out about this plant—from our perspective—is that it is a new feedstock in a new region, meaning it’s for solid waste. That’s exciting to the space. It obviously gives a broader outlook to our technology platform. They have some unique challenges, but nothing that others haven’t also faced.” Stuart-Paul emphasizes that most of his team’s experience is in the waste indusBIOMASSMAGAZINE.COM 29

¦PROJECT DEVELOPMENT

try. “We’re much more a waste company than we are a biomass company,” he says. “With biomass, you’re contracting with farmers or contracting with entities. With waste, you have a whole series of permitting and contract requirements that are very specific to waste. So the pathway to biomass—MSW or waste solutions—are very much a niche with a very discreet and distinct set of requirements.”

Incineration Alternative

Researchers work in a lab at the Novozymes North American headquarters in Frankinton, North Carolina. PHOTO: NOVOZYMES

30 BIOMASS MAGAZINE |MARCH/APRIL 2018

Construction on Fiberight’s $70 million, 144,000-squarefoot plant started last summer. For 115 MRC members, it will replace a waste incinerator in Orrington, Maine, built in 1988 and operated by the Penobscot Energy Recovery Co. Under a

PROJECT DEVELOPMENT¦

30-year contract, it served 187 Maine communities in eastern, northern, central and mid-coast Maine, generating electricity from MSW. “The incinerator was coming to an end of its useful life,” Davey says. “More importantly, PERC had a power purchase agreement which was expiring. At that point, without the subsidy, the cost for disposal was expected to go way up.” Knowing its contract with PERC expired in 2018, MRC began looking for other options, including continuing with PERC. In 2013, MRC announced its intention to work with Fiberight, after it responded to the committee’s request for expression of interest. Fiberight’s proposal—which uses the company’s proprietary bio-

technology—was peer-reviewed by the University of Maine Engineering Department. A report issued by the department’s evaluation team in early 2015 concluded: “Fiberight’s processing technology is sound and capable of converting the insoluble portion of MSW organics to a simple sugar solution.” The university also noted that at Fiberight’s pilot plant in Lawrenceville, Virginia—in operation since 2012— the company had “successfully used sugar solutions from both the insoluble and soluble portion of MSW to produce biogas through anaerobic digestion.” Fiberight relies on a targeted fuel extraction process, which the company says cost-effectively and efficiently

‘ The more we repurpose and reuse, the more profitable the plant is because we avoid disposal costs and better serve the communities.’ –Steve Davey, Fiberight Chief Operating Officer

converts MSW into cellulosic biofuel. The system separates, cleans and processes organic and hydrocarbon fractions of the waste stream. The recyclable fraction is sold as feedstock to end markets to make new products. The organic fraction is converted into renewable fuels. “The way I describe it is homogony from entropy,” Stuart-Paul says. “You have a very highly entropic mix and it changes on a minute-to-minute basis. What we do is create a

series of clean, homogenous outputs that are then ideal for a further process. Our output treatment is most of what we do because there’s no way you can take just mixed organics and hope to make something of value from them. By the time we’re done with the cellulosic feedstock, it is a very good feedstock—very clean and ideal for enzymatic hydrolysis. “The intent at the end of the day is that it will find its way into the pipeline to be used as

ÂŚPROJECT DEVELOPMENT

CNG (compressed natural gas) for transportation so we can realize the RIN (renewable identification number),� he continues. “We want to make sure it’s clean enough. We’re going to be starting off by using biogas for plant energy, build on that with our own transportation fleet and then we’ll send it to a broader market.�

Fiberight’s Sales Pitch

After MRC’s board of directors approved a development agreement with Fiberight in February 2015, the next challenge was getting enough communities to commit to waste disposal contracts to use the Fiberight plant. As Stuart-Paul explains, the company had to prove to the communities and other stakeholders that it could process their MSW. “The waste is a lot more than just biomass, of course,� he says. “It’s the plastics, metals and other such things. You can’t just say, ‘Sorry, we can’t take it today.’ What are

the people with the waste going to do with it? With traditional biomass, if you can’t sell it, you Stuart-Paul just plow it back into the ground. Trash is different.� Stuart-Paul says this is why Fiberight spent years developing a process and combining systems that helped convince MRC and potential investors that its technology wasn’t only viable, but also reliable. “It gets to the point where the people with the waste trust that—under all circumstances—you can deal with it,� he explains. “In addition to the technical part, we have backups after backup that, if something happens, there is always a pathway to dispose of the waste. We have the obligation and the technical expertise to process the feedstock.�

!

Fiberight’s approach appealed to many of the decisionmakers of MRC’s member communities. “There was a process where communities made a decision about where to take their waste,� Davey says. “Some opted to stay with the incumbent (PERC). Some opted— probably for geographical reasons—to follow a third option. Most of the communities opted to go with MRC's recommendation, which was the Fiberight plan.� As Davey explains, MRC delivered the preponderance of contractive waste Fiberight needed to make the project investable. He says the company then secured additional commercial waste contracts for some of the products it recovers and sells—takeoff agreements that made the project even more attractive to investors. Fiberight announced in early January that it had received financing—$45 million

of which came from a tax-exempt bond issue from the Finance Authority of Maine and $25 million from private equity.

A Proven System

Stuart-Paul says the front end of the facility—the waste processing plant—is proven throughout Europe in mechanical-biological treatment plants using anaerobic digestion to produce energy from waste. “Our additional part, the pulping, is well proven for waste in Europe and in China,� he says. “What we’ve done is create a clean biomass using proven technology. Working with Novozymes, we take the clean biomass, dehydrolyze it and create sugars. We’ve worked with Novozymes for seven years on optimizing hydrolysis.� Burns believes Fiberight understands the risks and has mitigated them where possible, while lowering costs where needed. “The important thing is that they’re building a robust

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platform,” he says. “As they get more operating hours and more understanding of the process, they’ll be able to drive the cost down further, and work with our team to help provide value on the biotechnology side.” In July 2016, the Maine Department of Environmental Protection issued the permits necessary to construct the Fiberight plant. However, PERC and other groups filed an appeal with the Maine Superior Court. “It was seven months of legal wrangling,” Davey recalls. “It really did create a delay, because if you’re thinking about making an investment in a project, you can’t unless there are clear permits available. It put our financing on hold, which made things a little uncomfortable for the communities that had decided to back the project.” Despite this, construction on a road and other infrastructure needed for the project began in fall 2016. In March 2017, a Maine appeals court upheld

DEP’s decision to issue the permits—a major boost to obtaining project financing. “The biggest lesson we learned was the timing of it all,” StuartPaul says. “It all came together pretty much at the right time. The trick was to get the financing community engaged at the same time we were developing the project. Diligence from the investors is an expensive thing. They’ll do it and they’ll take the risk—provided they’re confident you can get to a financial closing. You have to satisfy them that you’re well down the pathway to having the permits approved and the contracts in place.”

Construction gets Underway

Construction began in August last year, although the official groundbreaking for the plant was in October. Building construction has been slowed by a harsh winter in Maine, but Stuart-Paul expects it to be complete by March—weather

Hampden, Maine permitting. “The equipment starts rolling in in April,” he says. “We should be commissioning it in the summertime— certainly the front end. Then all the systems should be in place, optimized and at full capacity by the end of the year. This is actively in construction. We’re

not thinking about it. We’re doing it.” When the Fiberight plant is completed and operating commercially, Stuart-Paul says one of the most significant advantages it will provide to the MRC communities is lower tipping fees, which are less than what

BIOMASSMAGAZINE.COM 33

Since 2012, in Lawrenceville, Virginia, Fiberight has operated a pilot-scale version of a plant using its waste-to-energy technology. PHOTO: FIBERIGHT

CAN YOUR COMPANY AFFORD AN INDUSTRIAL EXPLOSION?

PROJECT DEVELOPMENT¦

the waste incinerator would have charged. In addition, in an environmentally conscious area of Maine concerned about CO2 emissions and the recovery of organic materials, he notes that Fiberight’s facility provides a recycling and recovery rate near 80 percent. “The other thing is that we’ll be producing gas,” Stuart-Paul adds. “Maine has a habit of running out of gas in the wintertime. We’ll be putting 50 million Btu a day into the gas grid. You take a combination of CNG trucks, our own demand and then excess gas, we can have a material impact to the energy supply side in that marketplace.” Davey says the towns aren’t putting any of their money at risk; they’re simply committing to allow Fiberight to process their waste for a market

rate. Fiberight’s expectation is that as the plant operates, meets its goals, services its debts and funds the private equity used for construction, it will become more profitable. “We’ll be able to kick rebates back to these communities, giving them a net reduction in the cost to process their waste,” he explains. “The more we repurpose and reuse, the more profitable the plant is because we avoid disposal costs and better serve the communities.” It’s taken years, but Fiberight can at last see the end of the road to a completed plant that meets the needs of dozens of Maine communities in an efficient, economical and environmentally responsible manner. “We’ve been confident in our technology for years,” adds Stuart-Paul. “The biggest

part is the due diligence, the financing and getting all the contracts in place. It’s just so many moving parts in order to get to a financeable project. It takes time and a whole heck of a lot of effort. We had the knowledge base to do it in an orderly fashion. We pulled it off.” Author: Patrick C. Miller Staff Writer, Biomass Magazine pmiller@bbiinternational.com 701-738-4923

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¦DOMESTIC HEAT

A WOOD

HEAT STATE OF

MIND

Wood heat is common in New York homes, but there's a need for higher-efficiency, lower-emitting devices, and ongoing support for new residential and commercial installations. BY ANNA SIMET

C

ommonly associated with rocketing skyscrapers and the Manhattan Skyline, bustling city life, the Statue of Liberty, Empire State Building and many other tourist attractions and landmarks, there is much more to New York than its metropolitan area. In fact, the vast majority is in stark contrast, comprised of vast, picturesque stretches of rural land scattered with farms, rivers, mountains, lakes and forestland. Of its approximate 30 million total acres, 63 percent, or 18.9 million acres, is forested, much of which is privately owned and managed for wood or pulp. Although between 2005 and 2012, New York experienced a 60 percent increase in the number of homes using wood

as the primary heating fuel source, reliance on fuel oil is still heavy. New York state uses about 1.8 billion gallons of No. 2 heating oil (distillate) each year, according to the U.S. EIA, much of it for residential heating. Only California exceeds New York in the total number of homes using wood as the primary heating fuel, according to NYSERDA’s New York State Wood Heat Report. And while wood heat application is increasing, with approximately 1 million wood-burning devices used for primary, secondary or recreational home heating—a trend prevalent not just in New York, but across the entire Northeast region in recent years—only about 2 percent, or about 143,350, are mainly heated with wood, compared to Vermont at 15.1

36 BIOMASS MAGAZINE |MARCH/APRIL 2018

percent, Maine at 12 percent and New Hampshire at about 7.8 percent. An additional 500,000 New York homes use wood for supplemental heat. But despite the fact that New York is the second-largest market for residential wood-burning devices in the country—and still growing—the existing market is prominently high-emitting, low-efficiency devices, most of which are unregulated. And, according to the NYSERDA report, while the overall use of wood for heating purposes is minimal compared to other fuels used for heating, its impact on the state’s air quality is significant, contributing 90-plus percent of the PM2.5 emissions. In a move to capitalize on New York’s wood resources and support industry busi-

DOMESTIC HEAT¦

ness opportunities and jobs, while increasing renewable energy use and focusing on climate mitigation and air quality improvement efforts, Gov. Andrew Cuomo first announced the $27 million Renewable Heat NY program in his 2014 State of the State address, and shortly thereafter implemented the program by funding 18 woody biomass projects across the state. It focuses on incentivizing modern, high-efficiency wood heat, and reducing the use of No. 2 heating oil in homes and businesses. Unlike the residential sector, use of wood for industrial heating isn’t incredibly common, and is mostly found in facilities associated with the wood products industry. A database developed by NYSERDA estimates that New York’s current inventory of

industrial and commercial boilers fueled by wood includes 62 sawmills, 13 schools, seven pellet mills, three industrial users, two paper mills, two commercial buildings, two greenhouses, and two hospitals. The use of wood pellets appears to be higher in neighboring states where access to natural gas is limited, but use of biomass in commercial applications is still higher in New York than in other states, including Connecticut, Massachusetts, and Rhode Island. Renewable Heat NY has been working to assist in the commercial wood heat buildout, and currently has an open opportunity for funding, with relatively strict and specific requirements. For small commercial

advanced cordwood with thermal storage installations, it provides 25 percent of installed cost up to $5,000 per unit, with an additional $5,000 for documented recycling –removal and destruction—of old outdoor or indoor wood boiler, or $2,500 for recycling whole house wood furnace. For small pellet boiler installations with thermal storage (less than 300 MBtu/hour (88 kW), it provides 45 percent of installed costs, up to $36,000 based on system size, with the same incentives for documented recycling or destruction of old outdoor and indoor wood boilers or wood furnaces. For large commercial pellet boilers and tandem pellet boilers with thermal storage (more than 300 MBtu/hour), it provides 40 percent of the total installed cost, BIOMASSMAGAZINE.COM 37

or a $200,000 maximum, and 45 percent of the total installed cost, or $270,000 maximum, respectively. Essex County’s Ray Brooks is one example of an ongoing commercial project being supported by Renewable Heat NY, and construction is underway on a new, pellet-fired district heating system.

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“NYPA wanted to demonstrate highefficiency, low-emission pellet boilers, and NYSERDA has gone through a rigorous testing and approval process to help promote this technology in the Adirondacks, and across New York State,� says Randy Solomon, director of energy efficiency at

the New York Power Authority. NYSERDA is contributing a $300,000 grant toward the project, which is being funded in part by the New York Department of Environmental Conservation, with construction financing by NYPA. At the Ray Brooks Biomass Project, a containerized building will house three boilers—one rated at 350 MBtu/hour, and two at 700 MBtu/hour—that will supplement heating requirements at the three agency buildings at the Ray Brook complex—the Adirondack Park Agency, the Department of Environmental Conservation and the state police, according to Solomon. The three-boiler system will produce hot water according to building demands. “Each of the three buildings served by this system will have controls on their hot water system that interface with the new biomass plant,� Solomon explains. “As demand for heat rises, the biomass boilers will be utilized. Hot water flows and temperature (Btu) will be measured for each building,

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DOMESTIC HEAT¦

and they will share in the cost of pellets accordingly. Research with solid fuel boilers has shown that multiple boiler systems result in more efficient overall systems. A common pitfall among pellet boilers is selecting a single, oversized unit that will operate inefficiently, and emit larger quantities of air pollutants.” In this case, Solomon adds, three boilers were necessary by this particular manufacturer to meet heating loads. Constructed next to the approximate 660-square-foot building will be a 35-foottall pellet silo to hold fuel. “One large silo will be used to increase the amount of the fuel storage without greatly increasing the footprint,” Solomon says. “This will also allow for the most flexibility when purchasing pellets, which are moved from the silo to an intermediate hopper, or day bin, inside the boiler plant. Each boiler has a dedicated flexible auger that is terminated inside the day bin, and will operate according to that specific boiler’s firing rate.”

Residential Wood Burning Equipment by Technology Type in New York State, 2011 SOURCE: U.S. EPA

A wood pellet supplier for the system has not yet been named, but the state intends to solicit competitive pellet pricing from a provider that serves the area, says Solomon. Ceremonial groundbreaking for the project was in August. “Most of the prepa-

rations inside the buildings have been made, and underground piping has been run,” Solomon says. He adds that working through the winter weather has been challenging— on top of working in and around a busy complex that includes three state agencies—and those issues, coupled with boiler

¦DOMESTIC HEAT

Local wood pellet producer Curran Renewable Energy delivers a load of fuel to the North Hudson Town Highway Garage. PHOTO: NFC

lead time, the project will be finished for use during the next heating season. Once up and running, it’s estimated the system will save the DEC about $50,000 in energy costs every year. To fully convey the benefits of the system to the public, a public education space

will be included in construction. “We’ll use this system, which is located in the Adirondack Park, to demonstrate and serve as a showcase example of new innovative biomass technology,” Solomon says. “Visitors will be able to look into the containerized biomass boiler plant, and see it working.”

Another example of a new, high-efficiency Renewable Heat NY-supported installation is in North Hudson, New York, which came online in late 2017. The fully automated, self-feeding wood pellet boiler provides the town highway garage with heat via a hot water distribution system, replacing an outdoor cordwood wood boiler that was no longer operational. Town Supervisor Ron Moore says alternatives were looked at, but it was decided that the pellet system was the best option. “We get to use wood for heat, and we will support jobs and the forest products industry through that decision, without requiring our town staff to spend time managing a cordwood boiler,” he says. The installation in North Hudson was done by Ehrhart Energy, an NYSERDAapproved contractor. Only contractors that have demonstrated technical competence in the design/installation of Renewable Heat NY eligible technologies are able to perform installations under the Renewable Heat NY program. As for what that demonstrating competence entails, installers must have at least two years of relevant experience, have completed manufacturer’s training for the boiler brand they are installing, and at least one person from the company must have successfully completed Renewable Heat NY biomass training.

BUILD YOUR FACILITY ON AN IOWA NORTHERN SITE Feed Stock: Millions of tons of excess corn stover within 30 miles of Iowa Northern tracks Transporta on: Mul ple Class 1 interchanges connect you to the en re North American railroad network Customized rail service: Rail service designed to meet customers’ needs For addi onal informa on contact Bill Rhodes Phone: (319)-297-6000 x 111 | Email: wrhodes@iowanorthern.com | www.iowanorthern.com 40 BIOMASS MAGAZINE |MARCH/APRIL 2018

DOMESTIC HEAT¦

NYSERDA did not grant a request for an interview with Biomass Magazine, but provided some answers to written questions. To date, it reported, Renewable Heat NY has funded over 1,000 projects—including categories of residential, small and large commercial and technical support, and said there has been consistent interest and growth in the program. The biggest challenge in meeting program criteria has been understanding the proper design and installation of qualifying technologies, according to NYSERDA, which pointed to its educational and technical support to installers and end-users to help with this issue. But while the program has seen a degree of success, it has been vastly underutilized. Joe Short, vice president of the Northern Forest Center and board member of the New York Bioenergy Association, says the organizations have some ideas on why that is, and is working to help correct it.

Money on the Table

The Northern Forest Center, well known for its work in advancing adoption of automated wood heat across Maine, New Hampshire, Vermont and New York, believes in the industry as a strategy that drives important market demand for forest resources while keeping dollars in the local

economy and creating jobs. Not surprisingly, the NFC has been involved in Renewable Heat NY for a long while. “We were pretty excited and involved in the creation of the program years ago,” Short says. “As for many renewables, we view public incentives as an important part of getting the sector off the ground. However, I don’t think the program has yet achieved its objectives.” Despite the $9 million in state funding available, it isn’t being used up quickly. “Last summer, we observed that despite all that money on the table, only 38 boilers were installed statewide,” Short says. “That’s in comparison to other states like Maine, New Hampshire and Vermont, where many hundreds have been installed in a similar timeframe.” As to why, Short says the NFC’s primary observation has been that the program has been challenging for installers to use. “Challenging to navigate through everything they have to do—a lot of work up front to meet NYSERDA requirements before they have the guarantee of a sale from their customer,” Short says. “And the success of these types of program really depends on the engagement of the installer—it has not been able to gain that in New York.”

The second reason is that the value of the incentive—in many cases, according to Short—is almost fully offset by the costs of specific equipment that NYSERDA requires the homeowner or facility to install. “It hasn’t been effective as a financial incentive as it has been in other states,” he says. The NFC has been communicating with NYSERDA on what kind of changes could be made to the program, to increase its use. “We had a good conversation with NYSERDA a couple of months ago and laid out our thoughts on how the program could be improved—in particular, pointing out how similar incentives have worked in other states,” Short says. “What we heard was that they were aware of the challenges and taking a look at the program and how it could function better, so we’re hopeful that’s what they come back with. New York has invested a significant amount of money here, and it’s important that we make use of it. We’re ready, as I know many other partners in New York are, to grow adoption of the program, if we can address some of the challenges.” Author: Anna Simet Editor, Biomass Magazine 701-738-4961 asimet@bbiinternational.com

BIOMASSMAGAZINE.COM 41

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April 16, 2018

Cobb Galleria Centre, Atlanta, GA Producers Will Be Attending 25% of 2017 attendees identify themselves as an existing or future biomass producer of power or fuel. You’ll get the perspective of biomass producers and network with them throughout the event.

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Biomass Carbonization & Torrefaction Summit

With four comprehensive tracks focused on Pellets & Densified Biomass, Biomass Power & Thermal, Biogas & Waste-toEnergy and Advanced Biofuels & Biobased Chemicals , you’ll be able to go in-depth, on the topics that best interest you.

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Based on our surveys, attendees connect with the right people and make business deals happen. 85% of exhibitors rated the quality of leads as positive and 95% said they’d return.

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The conference provides an excellent medium for both the customer and vendor to interact to discuss real industry application needs with plenty of breaks in between speaker sessions. // Mark Holt, Senior Engineer, Great River Energy

Our booth was tremendously busy from start to finish, I was very happy with the traffic flow and the quality of leads we got from the show! A very good job by BBI staff. // Will Charlton, Digester Doc

The networking opportunities at the IBCE are second to none for those involved with biomass energy. // Stacy Cook, GM and VP of operations, Koda Energy LLC

REGULATION

A Straighter, SHORTER PATHWAY

Confidence builds in overcoming the hurdles slowing corn kernel fiber-to-cellulosic ethanol approvals. By Susanne Retka Schill

Seven years after the U.S. EPA published the final rule for administering the Renewable Fuel Standard, the path to getting corn kernel fiber-to-cellulosic ethanol approvals appears to be getting much shorter. Edeniq CEO Brian Thome reports

it now takes six weeks from the time the data is submitted to the EPA to the time approval is granted to generate D3 RINs (renewable identification numbers). For those plants with efficient producer status, an amended petition process will take another six weeks. That’s a far cry from the nearly three years it took for the first two companies, Quad County Corn Processors and Edeniq, to get corn kernel fiber approved as a feedstock. The EPA finalized the rule to implement the RFS in 2010. The following year, QCCP began working with EPA on the corn kernel fiber clarification and Edeniq filed its petition. Thome says the delay was partially a result of others approaching EPA with feedstock questions in 2012. “EPA said, ‘Hang on, time out. We’re going through a formal and full rulemaking process around what feedstocks qualify.’” In mid-2014, EPA came out with its rule that defined corn kernel fiber as a crop resi-

due, clearing the way for QCCP and Edeniq customers’ registrations. It also established the rules for cellulosic biofuel from biogas, discussed other issues with crop residue feedstocks and made corrections and modifications to the 2010 rule. On its page of approved pathways, Edeniq’s Pathway approval goes directly to that rule. But it was QCCP that was first out of the gate. Delayne Johnson, CEO, says the plant was generating D3 RINs by October 2014. Edeniq’s first Pathway licensee, Pacific Ethanol-Stockton, California, didn’t get its approval until September 2016. The big difference is that QCCP’s cellulosic process occurs in a separate system, making the cellulosic ethanol measurement straightforward. Edeniq’s Pathway involves coprocessing, with the cellulases added to the starch fermentation tank. Though it consists of a simple addition of enzymes, the intellectual property is in the protocols and tests to quantify the cellulosic lift. “It took years and millions of dollars for our scientists to come up with a very precise and accurate way to measure what’s happening with those conversions,” Thome says. Pacific Ethanol-Stockton was the first to implement the technology, and Thome says it was seven months from the time the plant sent its registration to EPA be-

44 BIOMASS MAGAZINE |MARCH/APRIL 2018

fore it got approval to generate D3 RINs. He adds that while the Edeniq Pathway registration process appears settled, every company’s technology will need separate approval and there will be unforeseen issues that could cause delays.

LSCP’s Journey

In January 2017, Little Sioux Corn Processors became the third plant to be approved for D3 RINs under the Edeniq Pathway, but it ran into one of those unforeseen issues that took most of the year—until late November—to iron out. LSCP was in the first batch of ethanol plants to be approved for generating D6 RINs above its grandfathered volume in EPA’s Ef-

REGULATION

First to generate D3 RINs for kernel fiber-to-ethanol, Quad County Corn Processors in Galva, Iowa, has generated more than 7 million RINs. PHOTO: QUAD COUNTY CORN PROCESSORS

ficient Producer Petition Process (EP3). Not only did LSCP’s EP3 approval letter specify corn starch, which needed to be amended, but the agency had to determine how to handle the coprocessed cellulosic ethanol volume in the required 365-day rolling average greenhouse gas (GHG) reduction spreadsheet. Every efficient producer plugs in the bushels of corn crushed, the gallons of ethanol produced and the energy consumed as electricity and natural gas to demonstrate a 20 percent GHG reduction relative to the baseline gasoline for all gallons above the grandfathered volume. The compliance monitoring plan that’s part of that process is quite detailed, down to the serial numbers of the equipment being used to measure ethanol production and daily corn grind.

LSCP’s approval letter for its updated petition goes into detail about EPA’s decision on how the agency plans to handle the cellulosic gallons. All the upstream lifecycle GHG emissions associated with the corn feedstock is to be used in the corn starch ethanol GHG reduction calculation, as is all the energy used in the process. The cellulosic gallons are to be subtracted from the total volume. In its updated guidance document, “How to Prepare an Efficient Producer Petition Version 1.2,” EPA says it has added a category for starch producers who coproduce cellulosic ethanol from corn kernel fiber, with the requirement that the Part 80 D3 RIN registration be completed first. The methods for measuring the volumes of cellulosic ethanol must be established in the

D3 registration process before the formulas used in the EP3 spreadsheet calculating the 365-day rolling average can be properly applied, the agency explains. LSCP has been using cellulase enzymes for a couple of years, working with Archer Daniels Midland Co. on trials for ADM’s Clintozyme, says Steve Roe LSCP’s general manager. The cellulase enzyme boosted ethanol yields to better than 2.9 gallons per bushel, Roe says, and improved corn oil yield. Then the company decided to go after the cellulosic ethanol gain. It licensed the Edeniq Pathway, and worked with Edeniq to establish the cellulosic lift. Once EPA decided how to handle the D3 gallons in the EP3 reporting, Roe says, the BIOMASSMAGAZINE.COM 45

ICM’s Gen 1.5 Grain Fiber to Cellulosic Ethanol Technology is built on its Fiber Separation Technology. It sends the fiber stream from FST through a separate process where it is pretreated and fermented. PHOTO: ICM

remaining compliance plan approval was straightforward, partly because much of it had been determined in the earlier steps. Compliance requirements are more stringent for coprocessed D3 and D6 RINs, he adds. In early December, LSCP was preparing to redo its baseline without the cellulases, a voluntary step, he stresses. Edeniq will be back when the cellulases are reintroduced to collect the samples and run through its proprietary testing protocols. The results must also be validated by an independent engineer. EPA says that for every 500,000 gallons—or at least annually—the cellulosic lift must be recertified, Roe says. Participating in a RIN quality assurance plan also is likely to be a market requirement.

2 More on the Path Edeniq’s work to develop methods to precisely and accurately measure how much cellulosic ethanol is being produced from the fiber fraction could benefit the entire industry.

Two other companies expect to petition EPA in the coming year for their corn kernel fiber-to-cellulosic ethanol technologies: ICM and D3Max LLC. ICM’s Gen 1.5 Grain Fiber to Cellulosic Ethanol Technology is built on its Fiber Separation Technology. Steve Hartig, ICM’s vice

PHOTO: EDENIQ

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46 BIOMASS MAGAZINE |MARCH/APRIL 2018

REGULATION

Pretreated wet cake is ready for fermentation in the D3Max process. PHOTO: D3MAX

president for technology development, says the first installation of Gen 1.5 will be colocated with the 70 MMgy corn starch ethanol plant, trademarked as Element, under development next to ICM’s Colwich, Kansas, headquarters. Engineering and financing is nearing completion and groundbreaking is expected in early 2018. Gen 1.5 sends the fiber stream from FST through a separate process where it is pretreated and fermented. The fiber fermentation broth is then combined back into the existing ethanol plant’s larger fermenter to complete fermentation. Hartig reports the company is working internally and with others, including the National Renewable Energy Laboratory, to develop open industry standard methods for all processes to use for cellulosic ethanol tests. “ICM thinks this is important for the cred-

ibility of this industry,” he says. “ICM will be doing test method validation and third-party engineering review during the course of 2018 and then submit for actual approval immediately after start up.” ICM expects its approval process to move quickly. “From our discussions with the EPA, ICM believes they have made positive steps in pathway approvals and they have assured us of a speedy process,” Hartig says. D3Max also will be going through the regulatory process this year. The company’s patented pretreatment and fermentation process for wet cake occurs in a separate reactor and fermenter. According to Mark Yancey, D3Max’s chief technology officer, the technology’s commercial design and associated front-end loading (FEL), completed in January, defined

the scope and cost of a large-scale installation. At press time, the company’s pilot testing partner, ACE Ethanol LLC, in Stanley, Wisconsin, was still analyzing the FEL and related builder estimates, while signifying in early January that a commercial-scale project was likely. With construction expected to begin this spring, Yancey expects the permit modifications to be straightforward. “The same goes for the EPA registration and quality assurance plan,” he says. “We have about a year to get that done. Other companies have blazed the trail and gotten approval, and I don’t see EPA registration being a problem.” Author: Susanne Retka Schill Freelance Journalist retkaschill@yahoo.com

BIOMASSMAGAZINE.COM 47

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Are Black Pellets Ready to Compete with White Pellets?

R

enewable energy and carbon emissions reduction policies in Japan, South Korea, Canada, Western Europe, and other nations support the use of pellet fuel as a substitute for coal in power stations. To date, investments in pellet conversions have been focused on regular, industrial wood pellets, sometimes called white pellets. Advanced wood pellets, often called black pellets due to their appearance after thermal treatment, have long been touted as a superior fuel to conventional white wood pellets. Black pellets are supposed to address some of the potential shortcomings associated with

BY WILLIAM STRAUSS AND LAURENZ SCHMIDT

white wood pellets for use as a substitute for coal in pulverized coal power plants. Black pellet key advantages that have been put forward over the years include the elimination of the need for dry storage and transportation, better grindability, less dust formation during handling and storage, and higher specific energy density. Black pellets generally refer to two distinct technological approaches to developing an advanced wood pellet: torrefaction and steam explosion (SE). Torrefaction is a form of pyrolysis that results in partial thermal decomposition in the absence of oxygen. Typically, torrefaction is conducted between 200 degrees Celsius and

300 degrees Celsius to remove volatiles from the wood, and the resultant material is then densified into pellets. FutureMetrics has not analyzed any of the torrefaction technologies, but has analyzed, in detail, the Arbaflame technology for producing SE pellets. FutureMetrics—not engaged in Arbaflame in any way—was given full access to its intellectual property and its 40,000-metricton-per-year SE pellet plant in Norway. The report that this article is based on is an independent analysis of the Arbaflame technology, and the company has granted FutureMetrics permission to publish the information in this article.

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

48 BIOMASS MAGAZINE |MARCH/APRIL 2018

CONTRIBUTIONÂŚ What is Steam Explosion?

The SE method of wood fiber pretreatment involves exposing the material to saturated steam. The steam temperature and pressure, and the time in the reaction vessel, determines how much of the hemicellulose degrades, and what fraction of the feedstock matter gets converted into volatiles and biochemical compounds. The subsequent steam explosion is the rapid release of pressure. This explosive expansion of water in the cell walls of lignocellulosic feedstocks causes a breakdown of the wood fibers into very small particles. The severity of the steam treatment is controlled such that the cellulose and lignin are minimally affected, while the hemicellulose is partially degraded. When compared to white pellets, the resulting material, after densification in a pellet press, has a higher specific energy content (gigajoules per cubic meter (GJ/ m3), improved grindability, is hard and produces fewer fines, and its affinity to water is changed from hygroscopic to hydrophobic. The steam explosion process causes the lignin to emerge on the surface of the fine wood fibers in the form of small beads. When the fiber is densified in the pellet press, these beads form a film-like surface coating of the broken-down wood fibers, and results in hard, highly water-resistant pellets that produce almost no fines.

Benefits of SE Pellets

Three major advantages of SE pellets are: • In contrast to white pellets, SE pellets will not disintegrate when wet. • SE pellets have a higher volumetric and gravimetric energy density than white pellets (~31 percent more GJ/m3). This means more energy can be stored or transported per unit of volume. • Power requirements for pulverizing SE pellets at the pulverized coal power station are significantly lower than the power requirements for pulverizing white pellets. These benefits have been promoted for several years. However, technological constraints and high production costs have prevented large-scale adaptation. In early attempts to manufacture SE pellets, energy consumption, mass and energy content loss, and problems associated with the characteristics of the gasses released from the SE reaction outweighed the advantages of the product. The ability of the SE pellet plant to run reliably has

Figure 1 SOURCE: FUTUREMETRICS INC.

also been a challenge to the development of a competitive SE pellet sector. SE pellets absorb some water. As Figure 1 shows, after 48 hours of total immersion in water, the moisture content of the pellets increases from a the average after production of about 6 percent to about 14 percent. The water remains in the surface layer, and evaporates back out of the pellets.

SE pellets do not lose their mechanical characteristics after exposure to water. The durability of Arbaflame SE pellets before water immersion averages 98.8 percent. As Figure 2 shows, after 48 hours of total immersion, the durability is between 97.5 and 98.5 percent. The ability to store SE pellets outdoors eliminates the need for costly dry storage domes, silos, sheds, or covered rail cars. It also allows

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Arbaflame SE pellets are stored in the coal yard at Ontario Power Generation’s Thunder Bay power station in Ontario. The SE pellet fuel has been exposed to snow and rain and has not degraded. PHOTO: FUTUREMETRICS INC.

ship loading and unloading during rain and/ or snow events. SE pellets can be stored and handled under the same conditions, and in the same storage yards as coal, without detrimental impact on their functionality. The impact of higher specific energy content (about 19.5 GJ/MT for SE and about 17.5 GJ/MT for white) and bulk density (about 790 kg/m3 for SE versus about 650

kg/m3 for white) on transportation costs per GJ delivered is another characteristic of SE pellets that gives them an advantage over white pellets. A fully loaded, 60,000-cubic-meter vessel (handymax size) will carry about 682,000 GJ of energy with white pellets, and about 924,000 GJ of energy with SE pellets. Savings in the energy required to run the pulverizing mills in the coal power station can

be significant. It takes about 45 kWh to pulverize one MT of white pellets. It takes about 11 kWh to pulverize one MT of SE pellets. This cost saving is particularly significant if applied to a Japanese independent power producer (IPP) project that is running under the feedin-tariff. An IPP using 200,000 of SE pellets would consume enough fuel to fully fire a 60MW unit for one year, and lower that plant’s

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50 BIOMASS MAGAZINE |MARCH/APRIL 2018

Fueling the Future

CONTRIBUTIONÂŚ

Figure 2 SOURCE: FUTUREMETRICS INC.

annual pulverizer power costs by almost half a million dollars per year, versus what its cost would be to pulverize the same energy with white pellets.

Are SE Pellets Cost Effective?

Arbaflame, after more than a decade of R&D, has optimized the production process so that no energy is wasted. That optimization, plus the addition of a biochemical reclaim system to capture the valuable organic chemicals produced during the steam reaction process, allows the production of SE pellets that can compete with white pellets. Recent developments in SE pellet technology by Arbaflame have substantially improved the competitiveness of SE pellets. The

most relevant recent process improvement that lowered the cost of the previously noncompetitive process is the recycling of energy for use in feedstock drying and the recovery of valuable organic chemicals that are created as gaseous byproducts of the SE process. Many years of R&D by Arbaflame at its plant in Norway have also resulted in a pellet plant that operates reliably and consistently. The Arbaflame SE pellet manufacturing process in operation at the Arbaflame 40,000-ton-per-year plant is robust and energy efficient. The plant runs reliably and consistently. The balancing of the moisture levels between the predryer output, the steam reactor, and the post dryer allows for nearly full utilization of process and post-dryer energy

for the predrying process. This highly efficient use of energy is critical to the economics of the operation. The mass loss due to steam treatment and the additional energy cost to run the reactor is offset by the value of the reclaimed biochemical compounds. SE fiber densifies more easily than white wood fiber. The lower operating cost of the pellet press (about 30 percent lower power per MT) and the elimination of the dry hammer mill (the SE process achieves the fiber size reduction needed for making pellets) further contributes to offsetting the higher wood cost per MT produced. The ability to provide fuel delivery security to newly built power plants and co-firing power plants is critical. The white pellet sector has multiple production plants in numerous locations. If there is a problem at one plant or at a shipping terminal, there is redundancy across the supply chain. The SE pellet sector does not yet have that supply chain redundancy. Based on our analysis, the only impediment to rapid growth in the SE pellet sector is that of overcoming the lack of redundancy in the fuel supply chain. Authors: William Strauss President, FutureMetrics Laurenz Schmidt Senior Engineer, FutureMetrics www.futuremetrics.com 207-824-6702

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The San Luis Obispo County digester construction is underway. The continuously fed, horizontal PF1800 plug-flow digester has a nominal capacity of 64,000 cubic feet, at a filling level of approximately 85 percent. It is a patented steel structure with inner dimensions of 130 feet long by 28 feet in diameter. PHOTO: HITACHI ZOSEN INOVA U.S.A.

Organic Waste to Watts in Wine Country

Planned for full operation in mid-2018, San Luis Obispo County’s new state-of-the-art anaerobic digestion facility will convert source-separated organic waste into biogas and high-grade compost. BY JIM MCMAHON

S

an Luis Obispo County, located along the Pacific Ocean in Central California between San Francisco and Los Angeles, is known for its breathtaking seascapes, miles of oak-studded rolling chaparral hills, and prolific wine production—the third largest wine-producing county in California. Its population of 283,000 resides in small communities scattered along the beaches, coastal hills and mountains of the California Coast Ranges. Cities like Pismo Beach, Grover Beach and Morro Bay dot the coast, while slightly inland is the county’s largest community, the city of San Luis Obispo. It is here where California’s most streamlined project is underway for the conversion of organic waste into biogas and high-grade natural compost, through anaerobic digestion (AD).

Preferred Process

Utilizing AD as an alternative to landfills for the disposing of collected source separated organic (SSO) waste is not new to California, nor is the conversion of organic waste into biogas and compost new to the state. California has 17 organic waste anaerobic digestion plants in operation, and another 10 in the approval/building process, including the facility at San Luis Obispo, which is scheduled to begin full production in mid-2018. Organic materials account for a significant portion of California’s overall waste stream. Food waste alone represents approximately 17 percent of total landfill disposal within the state, and the state recognizes that expanding anaerobic digestion of organic waste will help reduce methane emissions from its landfills,

and produce biogas that can be used to create electricity or renewable transportation fuels. Consequently, the California state legislature and Gov. Jerry Brown Jr. passed a number of stringent laws directed toward the collection and handling of organic municipal solid waste. California Assembly Bill Number 1826, enacted in September 2014, requires businesses that generate a specified amount of organic waste per week to have arranged for recycling services by April 2016, and requires each jurisdiction to implement an organic waste recycling program to divert the waste collected away from landfills. California Assembly Bill Number 1383, enacted in September 2016, establishes targets to achieve a 50 percent reduction in the level of the statewide disposal of organic waste

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

52 BIOMASS MAGAZINE |MARCH/APRIL 2018

CONTRIBUTION¦

from the 2014 level by 2020, and a 75 percent reduction by 2025. Both AB 1326 and 1383 build upon California's leading commitments to reduce greenhouse gas emissions and air pollution statewide.

San Luis Obispo County’s Unique Facility

In support of these issues—and unique and streamlined in its scope of operation, when compared to other AD facilities—the idea for the San Luis Obispo County AD plant was conceived. The facility will process the organic solid waste at a thermophilic temperature of 131 degrees Fahrenheit, considerably higher than the lower mesophilic temperature range of most of the state’s other AD facilities. The higher processing temperature ensures that spores and bacteria are eliminated, completely sanitizing the organic matter during processing. And equally important, the higher temperature permits the biogas potential to be fully exploited by the time the material comes out of the digester, in effect, extracting a higher volume of carbon-neutral biogas. The San Luis Obispo facility is the only dry AD plant in California that is designed, financed, built, owned and operated by an independent engineering company, separate from a government agency or waste collection contractor. That company is Swiss company Hitachi Zosen Inova U.S.A. LLC, an engineering, procurement and construction contractor that delivers complete turnkey plants and system solutions for recycling organic waste. “We started this process 10 years ago, even before the mandates were in place,” says Bill Worrell, general manager, San Luis Obispo County Integrated Waste Management Authority. “We recognized that an enclosed anaerobic digestion facility is really the state-of-the-art solution to handling organic MSW. It keeps everything indoors, there is no runoff, and it recovers energy. It is just the best way to compost.” As early as 2007, Worrell was visiting AD plants in Germany and Switzerland, then subsequently in Canada and the U.S., about a dozen plants in total, he says. “We were looking for a long-term solution for our organics waste. So we looked at all the options, and what was available. In 2014, Hitachi Zosen Inova began offering its Kompogas AD technology in North America,” Worrell continues. “I had visited three of the company’s plants in Europe earlier, so was familiar with their systems, and thought their technology would be a good fit for our needs at IWMA. So this started discussions between HZI and IWMA.”

The San Luis Obispo County IWMA is a joint powers agency that includes San Luis Obispo County and seven cities within the county. The IWMA plans and implements regional solid waste and hazardous waste programs, and its board of directors is composed of the five county supervisors, one elected official for each city and an elected representative from the special districts. Servicing the waste collection for five cities and much of the county unincorporated area is Waste Connections, an integrated waste services company that provides solid waste collection, transfer, disposal and recycling services in mostly exclusive and secondary markets. Each of the five cities and the county has its own contract with Waste Connections. Both IWMA and Waste Connections are jointly responsible to comply with California Assembly Bills 1326 and 1383 relating to organic MSW collection and disposal within the county. “To implement the project, each of the cities and the county agreed to 20-year waste collection contracts with Waste Connections, which

would deliver the organics to the Kompogas facility, to be located at the Waste Connections yard near the city of San Luis Obispo,” Worrell explains. “The plant would be designed, financed, built, owned and operated by Hitachi Zosen Inova, with a 20-year commitment from Waste Connections to provide the plant with the organic waste stream.” With the agreement of all parties now in place, detailed planning, design and permitting of the facility could move forward. “We worked closely with IWMA and Waste Connections on our plans, much of which entailed ensuring all participant parties, including the public, were fully informed on the processes and procedures involved with the plant operation,” says William Skinner, West Coast sales manager for Hitachi Zosen Inova. “Much of the process involved securing state permitting requirements. Part of this planning had to do with diverting green waste away from two open-air compost facilities being used by Waste Connections, and moving that organic waste stream into the facility, once in opera-

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tion. This was part of the overall strategy for supplying waste to the new facility.�

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Kompogas Technology

The Kompogas continuous, dry AD process is based on the dry digestion of solid biowastes in an oxygen-free environment. Throughout the AD process, large, organic polymers that make up biomass are broken down into smaller molecules by microorganisms. Upon completion of the AD process, the biomass is converted into biogas, as well as into liquid and solid digestate, that will be used as soil compost and a liquid soil conditioner. “The Kompogas process uses a horizontal plug-flow digester,� Skinner says. “The organic material is transported inside the digester, with the material moving horizontally through the system by feeding on the inlet side and discharging on the outlet side. A slowly turning agitator ensures that the substrate is optimally mixed within the digester, and the biogas bubbles are permitted to vent for high-yield formation of methane. This facilitates the biological strength of the Kompogas anaerobic environment, enabling it to make maximum use of the organic waste’s energy potential.� The process recirculates approximately one-third of the digestate, rich in thermophilic microorganisms, from the output and back upfront into the digester to activate and accelerate the digestion process of the fresh material fed into the digester. This allows a perfect adjustment of the hydrolysis/acidogensis rate in the digester feeding section, and facilitates high bioprocessing efficiency within the system. Conversely, with conventional anaerobic digestion, the key steps of hydrolysis, acidogenesis, acetogenesis and methanogenesis are completely mixed. Each step takes place at the same time, at the same place in the digester If required, additional process water creates the optimal consistency for decomposition, with humidity residing around 70 percent. A specially developed heating system regulates the temperature during processing at 131 degrees F during a retention period of approximately 14 days. Thermophilic microorganisms decompose the organic matter and produce biogas, and because the digestate is completely sterilized, the system does not require any upstream pasteurization.

Process Steps

At the San Luis Obispo County AD facility, the organic material delivered to the plant will be tipped in the reception hall. All han-

dling of organic materials takes place in closed and ventilated rooms, thereby minimizing odor emissions to acceptable levels. Automatic roll doors allow trucks to enter the facility, and close immediately upon safe entry. From here, the material is fed into the processing area using a wheel loader. The material is preprocessed through a shredder, and followed by a two-inch star screen that removes contaminants such as plastic, paper, ferromagnetic particles and other nonorganic items. The pretreated material is then transported to an intermediate storage bunker, and a dosing unit, equipped with a scale to monitor the amount of material fed into the digester, is fed by a fully-automated crane. From there, the material is fed to the digester via belt conveyors. The continuously-fed, horizontal PF1800 plug-flow digester with a nominal capacity of 64,000 cubic feet at a filling level of approximately 85 percent. It is a patented steel structure with inner dimensions of 130 feet long by 28 feet in diameter. Hot water supplied by the combined-heat-and-power (CHP) unit, or biogas boiler, is used as the heating media, and to minimize heat losses, the tank is enclosed by thermal insulation. The entire digester module can be installed outdoors due to its weatherproof housing. A central heat distribution system is installed underneath the digester within the enclosure, accessible by doors from both ends, and a slow-turning agitator device results in optimal degasification, while sedimentation of heavy matter in the digestion substrate is prevented, due to special positioning of the agitator paddles. After the process, the remaining material is removed from the digester by the outlet pump, and dewatered by screw presses, which are separating the digested substrate into solid digestate (press cake) and liquid digestate (press water). The liquid digestate is piped into a collecting tank, and treated by advanced mechanical treatment (decanter/centrifuge). A portion of it is recirculated for moistening the input feedstock material. The remaining liquid digestate is pumped to a large storage tank outside of the main building. The storage tank is covered by a gas- and odor-tight, double-membrane roof, and equipped with a watertight door, allowing access for periodic removal of sediments. Agriculturists can fill their trucks directly at the storage tank, by means of a digestate loading station. Solid digestate is removed from beneath the dewatering presses with a shovel load-

CONTRIBUTIONÂŚ

er, and deposited into one of several open aerobization boxes, located in the compost hall. The digestate will be subject to aerobic stabilization and removal of volatile organic compounds. During this process, for 14 to 21 days, air is blown through the material by means of ventilation channels in the floor, allowing rapid aerobic stabilization. The exhaust air of those boxes, as well as the air of the whole post-treatment hall, is collected and piped to a waste air treatment plant system. Raw biogas from the digester is desulfurized and dewatered to an acceptable level for the following biogas utilization systems. Biogas is analyzed for its content of methane, carbon dioxide, oxygen and hydrogen sulfide.

Power Generation, Emissions

One of the major points driving the final decision to move forward with the Kompogas plant was the amount of electricity that is capable of being produced on a continual basis. At full capacity, the plant is designed to produce enough biogas to generate 6.2 million kilowatt-hours annually. “Biogas can be used either to fuel the waste collection trucks, or create electricity,� Skinner says. “What it came down to is that while Waste Connections had some CNG trucks, they did not have enough to take all the biogas that would be produced. So, we went with electricity. That way, the electricity can be used internally to power the plant, with the excess put into the grid.� The pretreated biogas is led to a CHP unit, a completely containerized module with gas controller, gas engine, generator, exhaust funnel, heat recovery, cooling unit, catalyst and control unit. It is designed to ensure maximum possible electrical efficiency and high availability. “A critical factor throughout the entire development of this project was containing the release of contaminants and odors into the surrounding environment,� Skinner says. “HZI implemented very stringent processes throughout the facility to ensure this measure was intact.� The plant also needed to comply with the California Environmental Quality Act, Skinner adds. “This is a statute that requires state and local agencies to identify the significant environmental impacts of their actions, and to avoid or mitigate those impacts.� The digester itself is a completely closed system, as the process operates under anaerobic conditions, so no emissions are released into the surrounding environment. Exhaust air collected from the various halls is moistened with water by means of a special nozzle

system operated with compressed air. Reaching humidity levels of 95 percent guarantees an optimal operation of the subsequent biofilter. To lower the total air volume to be treated by the biofilter, the total exhaust air collected in the waste treatment hall is directed to the composting hall as inlet air. Hence, the air from the treatment hall is reused for aeration of the composting hall before it is led to the biofilter for treatment. The biofilter consists of a large, open structure with a permeable floor to allow for airflow, and is filled with pieces of tree roots. After being shredded and sieved, the wood chunks offer a large surface as a breeding ground for natural microorganisms that absorb the volatile organic compounds contained in the exhaust air. The loosely stacked biofilter results in a minimal pressure drop of the exhaust air stream. To prevent the air from being released into the environment, both the treatment hall and the composting hall are kept at negative pressure.

Waste as an Energy Resource

For the residents of San Luis Obispo County, implementation of this new AD plant represents a significant step toward GHG reductions, via diversion of organic waste from open landfills. But it is also a movement away from wasted resources, to the utilization of waste as an energy resource. The facility makes a bold statement of environmental consciousness, not just to the residents of the county, but to all Californians, and the nation. The San Luis Obispo County AD facility is being funded in part—a $4 million contribution—by the California Department of Resources Recycling and Recovery’s (CalRecycle) Organics Grant Program, a subset of California Climate Investments. CCI is a statewide program that puts billions of cap-and-trade dollars to work reducing GHG emissions, strengthening the economy, and improving public health and the environment, particularly in disadvantaged and low-income communities. The cap-and-trade program also creates a financial incentive for industries to invest in clean technologies and develop innovative ways to reduce pollution.

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Siting a New Facility: COSTLY MISTAKES Successfully bypassing numerous potential project development pitfalls requires a deep understanding of the wood fiber supply chain. BY STAN PARTON

A

s part of Forest2Market’s business, we track emerging industries that use wood-derived feedstocks. We began serving bioenergy in 2006, and over the years, added biofuels and biochemicals to our practice. Along the way, we have uncovered a number of market dynamics to help project developers better understand the wood supply chain and the economic and biological sustainability of

wood-derived feedstocks. We have also uncovered major project development pitfalls that have the ability to consume capital, and sink new projects before they even get off the ground. Understanding the feedstock supply chain of biobased projects is a critical first step before moving to the site selection phase. At a minimum, developers need to have fact-based answers to a series of ques-

tions, including: What are the market drivers of supply? Where should I site my plant to assure long-term sustainability? What is the competitive demand in the market and how easily can that demand be displaced? How much excess supply exists? How do I track sustainability? How do I hedge feedstock price volatility? How do I make my debt or equity partners comfortable with supply chain risks?

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

56 BIOMASS MAGAZINE |MARCH/APRIL 2018

PREMIER WOOD CHIP DRYING SYSTEMS Uzelac Industries is a major supplier of Rotary Drying Systems to the wood chip industry, building custom equipment for over 30 years. Figure 1: Historical and forecast of quarterly pulpwood stumpage prices. SOURCE: FOREST2MARKET

From this exercise and analysis, developers are able to create a list of important criteria so that each potential project location can be thoroughly and objectively ranked. While governmental economic incentives are helpful inducements in determining prospective site locations, an approach that places these considerations ahead of feedstock considerations could jeopardize the success of a project in the long run. This is the case because feedstock costs compose an enormous part of the overall operating cost of a facility. Siting a new project in an optimal wood basin is critical to ensuring that a sustainable and affordable wood supply is available throughout the life of the project. The following are mistakes to avoid when siting a facility. Relying solely on local suppliers for market information. Wood markets are dictated by local supply and local demand, yet this does not position local suppliers to accurately assess the market. The view held by each local supplier is limited to the opportunities surrounding only his or her supply, not the supply available throughout the entire marketplace. New biobased project developers must be aware that existing forest products companies are the most reliable buyers in the wood fiber supply chain; pulp and paper mills alone are part of a $10 billion industry that receives 9.5 million truckloads of logs each year. Suppliers will continue to give precedence to these established and reliable buyers, even as new opportunities emerge.

Accepting “free land� from an economic development committee. Great as it may sound, there is no such thing as free land. Economic development committees have a vested interest in attracting new business to their regions. However, committee members are simply not qualified to offer unbiased assessments of the wood basin, infrastructure and many other factors that contribute to the success or failure of a wood-consuming, biobased manufacturing facility. Ultimately, the cost of factors such as low inventory and high competition from other facilities in the procurement zone could significantly outweigh the money saved on a land deal. Equating the number of trees with the availability of wood fiber. A heavily forested area can create the illusion that a region enjoys ample feedstock supply. It is important to realize that not all trees visible to the eye are available for harvest. Questions about who owns the trees, or whether the trees are located in harvestable areas, must be answered to accurately assess the available wood fiber supply. The age class and species density of the forest must also be considered when assessing supply over a 20-year period. Assuming wood costs will rise or fall based on the historical trend line. The cost of wood depends on demand and the age classes of trees available to meet that demand. For example, stumpage prices can temporarily spike when new demand enters the market and pressures current forest resources.

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¦CONTRIBUTION

A site-screening heat map provides quantitative comparisons of potential supply areas. IMAGE: FOREST2MARKET

Ignoring local competitors’ capacity to pay. Pulp and paper mills, OSB mills, bioenergy and biochemical manufacturers compete for the wood-derived feedstock available in a supply region. The higher profit margins that some facilities enjoy compared to other facilities allows them to absorb higher feedstock costs and still remain profitable for sustained periods of time. Ballparking feedstock prices without a dependable forecast. To produce an accurate forecast, the starting price (weighted average market price at a precise moment in time) should be based on the highest-quality transactional data available.

By starting the process with a specific price based on the actual market, the forecast will deliver a greater level of accuracy. Figure 1 highlights this accuracy (the light blue line shows the model’s forecast price, and the dark blue line shows actual wood fiber prices). Project developers who know—with a high degree of confidence—what they will pay for wood supply for the next 24, 36 or 48 months have the ability to better optimize wood procurement—both volume and price, manage inventory more effectively, and align facility feedstock and output with raw material price trends.

Avoiding these six potential pitfalls requires a deep understanding of the wood fiber supply chain. As the housing market recovers, the pulp and paper industry flourishes, and bioenergy and biofuels and biochemicals markets continue to develop, competition for wood fiber will intensify in local supply areas. The onus is on project developers to locate their projects in areas that assure a sustainable and affordable feedstock supply, which will ultimately lead to a successful project. Author: Stan Parton Manager, Bioenergy & Biochemical Practice, Forest2Market Inc. stan.parton@forest2market.com www.forest2market.com

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At Drax’s port facility outside of Baton Rouge, Louisiana, wood pellets are loaded for shipping to its U.K. power station. Soon, the fourth of its six units will be converted from coal to pellets. PHOTO: DRAX BIOMASS

From PLANT to PORT Before being used as fuel at Drax’s U.K. power station, wood pellets make a long journey that the company has fine-tuned. BY DAVID MARKS

D

rax Power Station in Yorkshire, England uses millions of tons of wood pellets every year to generate electricity. A significant proportion of those pellets are produced in the U.S., at its facilities in Louisiana and Mississippi. Before they can be used to generate electricity, the pellets are transported safely and efficiently across the Atlantic, and by then, they have already undergone a series of carefully planned transport logistics. The initial journey to Drax’s port facility near Baton Rouge, Louisiana, requires both trucks and trains.

The Road Trip

The Amite BioEnergy pellet plant in Gloster, Mississippi, lies roughly 60 miles from Baton Rouge. Given the distance, it was decided that trucks were the best option for moving the pellets from plant to port. “Each truck can carry 25 tons of pellets per load, and the journey takes around 90 minutes–accounting for the trucks slowing down when they pass through urban areas. It means that one driver can do three trips on any given day,” says Lloyd Wedblad, head of logistics at Drax Biomass.

Morehouse BioEnergy in Bastrop, Louisiana, presented a slightly more challenging scenario, as the team needed to find a quick and economical way to transport pellets 221 miles to the port. A solution was found in the region’s robust rail infrastructure, which includes the Arkansas Louisiana Mississippi railroad. Opened in 1908, the ALM line runs from the City of Monroe, Louisiana, to Bastrop, just south of the Arkansas state line. The trains leaving Morehouse BioEnergy were slightly modified closed-top grain cars rather than open-top coal cars to protect pel-

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

60 BIOMASS MAGAZINE |MARCH/APRIL 2018

When a ship of wood pellets arrives at the Port of Liverpool for unloading, left, it is only one leg of the long journey, which involves transport from specially designed railcars, center, from Drax’s wood pellet production facilities to the port of Baton Rouge. Pictured right is the company’s Urania, Louisiana, plant, which Drax acquired from German Pellets in April 2017, investing $20 million in upgrades before bringing the plant online in November. PHOTOS: DRAX BIOMASS

lets from the elements. “The cars are designed Once the domes contain enough volto each carry 286,000 pounds,” Wedblad says. ume, a cargo vessel arrives for the transatlantic “But because of local weight limits on bridges journey to the U.K. Yet another conveyor belt and sections of track along the route, we’re lim- moves the pellets from the domes to the dockited to hauling 263,000 pounds per car. That’s side shiploader, which loads each cargo hold %LRPDVV 0DJD]LQH SDJH LVODQG & still a lot of pellets.” until the vessel is ready to sail. Once the train arrives at the port, it takes “The emissions associated with each stage around 24 hours to unload before making the of the journey is tracked to ensure the Drax 20-hour return journey to Bastrop. One train Group supply chain is as low-carbon as posdeparts roughly every three days, so over 110 sible,” says Pete Madden, president and CEO trains are required each year to move this facil- of Drax Biomass. “Even with all supply chain ity’s pellets to the port. Morehouse BioEnergy is currently served by 45 car-length trains, but this will soon change, in a big way. A new chambering yard planned for the port will allow the team to begin shipping pellets on 80-car length unit trains, each nearly a mile long and capable of carrying almost double the volume of current trains. Unit trains will deliver major fuel and cost savings to Morehouse BioEnergy and improve Drax Biomass’s overall supply chain efficiency. A new rail system will also be utilized for the company’s newest facility, LaSalle BioEnergy, in Urania, Louisiana.

emissions considered, the power generated thousands of miles away at the Drax Power Station in the U.K. has a carbon emissions profile that is 80 percent lower than coal. This journey from forest to port is growing more and more efficient and sustainable.” Author: David Marks Director of Policy and Communications, Drax Biomass David.marks@draxbiomass.com 770-743-4281

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Preparing for the Overseas Journey

The final stage of the pellets’ journey begins along the Mississippi River at the Port of Greater Baton Rouge. As the pellet-laden trucks arrive from Amite, they drive into customized bays where they unload their cargo onto a conveyor belt in roughly six minutes before returning to the Gloster facility. When a train arrives at the port, it is divided into several shorter, car-lengths before each is routed into an unloading facility. The cars deposit their cargo onto a separate conveyer belt, which, like the belt under the truck bays, moves the pellets into one of the port’s two 40,000-metric ton storage domes.

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