2018 May/June Biomass Magazine

May/June 2018

P O W E R I NG

CHANGE Biomass' Role in Africa's New Deal on Energy PAGE 28

PLUS:

Bioenergy in Australia PAGE 14

AND: North American Renewable Natural Gas Industry Expands PAGE 22

BiomassMagazine.com

MAY/JUNE 2018 | VOLUME 12 | ISSUE 3

06 EDITOR’S NOTE The Varying Global Energy Landscape

By Anna Simet

07 EVENTS

COLUMNS 08 Carbon Capture with Storage: New Frontier for Biomass?

By Bob Cleaves

09 A $5 Million X-Prize to Reinvent the Wood Stove

By John Ackerly

14

10 US EPA Climate Changing on RFS?

By Michael McAdams

12 BUSINESS BRIEFS

FEATURES

14 Building Out Biomass in the Land Down Under Bioenergy has much potential in Australia, but a lack of domestic drivers is turning the focus to global market opportunities.

By Patrick C. Miller

22 Rallying for RNG In a Q&A with Biomass Magazine, Marcus Gillette of the Coalition for Renewable Natural Gas discusses growth, drivers and opportunities in the North American RNG natural gas market.

By Anna Simet

28 From Impoverished to Empowered Biomass power is an integral component in the Sustainable Energy Fund for Africa’s effort to provide citizens with universal access to electricity by 2025.

By Ron Kotrba

CONTRIBUTION

34 Healthy Demand for Southern Timber Ensures Forested Land Remains Forested Demand for forest products—including wood pellets, chips and other renewable wood resources used to generate energy—is associated with more productive forests.

By Hannah Jeffries

38 MARKETPLACE

ON THE COVER: Kibera, a suburb of Nairobi, Kenya, is described as Africa’s largest urban slum.

One year ago, Asticom Kenya Ltd. received a $995,000 grant from the Sustainable Energy Fund for Africa to support construction of a 10-MW, grid-connected municipal waste-toenergy plant at one of several waste disposal sites that receives approximately 1,000 tons per day of MSW, posing a health and environmental hazard to Kiberia's estimated 500,000-plus residents.

4 BIOMASS MAGAZINE |MAY/JUNE 2018

24 ¦ADVERTISER INDEX 2018 Advanced Biofuels Conference 2018 International Biomass Conference & Expo 2019 International Biomass Conference & Expo AB Bruzaholms Bruk Air Burners, Inc. AMANDUS KAHL GmbH & Co. KG Astec, Inc. Continential Biomass Industries, Inc. (a Terex Brand) CPM Global Biomass Group D3MAX Detroit Stoker Company Drinor Hermann Sewerin GmbH KEITH Manufacturing Company Kobelco Compressors America, Inc. McLanahan Corporation NDC Technologies Ltd. Pellet Fuels Institute ProcessBarron Tramco, Inc. Vecoplan LLC Williams Crusher

30 20-21 11 12 2-3 25 40 19 33 37 27 31 26 16 18 17 35 39 24 13 36 5

CORRECTION: In the March/April Biomass Magazine feature, "Powering Paradise," it incorrectly identifies ESI Engineering as the firm that retrofitted the boiler of Honua Ola Bioenergy. The correct company is ESI Inc. of Tennessee.

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¦EDITOR’S NOTE

The Varying Global Energy Landscape

ANNA SIMET EDITOR

asimet@bbiinternational.com

Recently, someone asked me what percent of U.S. energy is renewable, and I hesitated. I knew wood energy was somewhere around 2 percent—20 percent popped into my head. That was what I said, and later, I confirmed that estimate was high—it actually only accounts for about 10 percent of total U.S. energy consumption, and about 15 percent of electricity generation, according to the U.S. EIA. In Africa, wood is the source of a whopping 80 percent of all energy consumption, but mostly for heating and cooking. And on a continent home to 1.2 billion-plus people, only about 45 percent actually have access to electricity, and that number is even lower in the sub-Saharan region.

In his powerful page-28 feature, “From Impoverished to Empowered,” Senior Editor Ron Kotrba reports on a New Deal on Energy for Africa, an initiative driven by the African Development Bank Group that, in a nut shell, aims to provide Africans universal access to electricity by 2025. Biomass will plan a significant role, and Ousseynou Nakoulima, AfBD’s director of renewable energy, told Kotrba, “Biomass—specifically agriculture residue—does not just provide a solution to the problems of energy access and renewable energy, but it drives business and the value chain all along the ag subsector. In nutshell, these are major advantages.”

Like Africa, Australia has an abundance of ag residue, sugarcane bagasse in particular. Staff Writer Patrick Miller details Australia’s bioenergy development potential, progress and hindering political forces in his page-14 feature, “Building Out Biomass in the Land Down Under.” In the story, he details several large-scale pellet projects, and found a common theme while discussing them with developers—right now, the domestic market is limited, so eyes are on international markets for now.

Rounding out our global market development issue, I interviewed the Coalition for Renewable Natural Gas’s Marcus Gillette on the North American RNG market, which has experienced significant growth over the past several years, one major driver of which has been the Renewable Fuel Standard. Since 2014, when RNG was qualified to generate cellulosic biofuel RINs under the RFS, the industry’s average annual growth rate has been about 70 percent, Gillette says. He tells me, “What this means is, in the midst of a year when the merits of the RFS are being hotly debated in Washington, the RNG industry is perfect proof that the RFS is continuing to work as Congress intended, growing domestic production and use of cellulosic biofuels.”

I write this ed note shortly before leaving for the International Biomass Conference & Expo, and coming off this timely issue, I look forward to learning even more about the research, equipment and technology innovation, and development and advocacy strategies being deployed to advance the global bioenergy industry.

6 BIOMASS MAGAZINE |MAY/JUNE 2018

INDUSTRY EVENTS¦

PRESIDENT & EDITOR IN CHIEF Tom Bryan tbryan@bbiinternational.com

EUBCE 2018 – 26th European Biomass Conference and Exhibition

EDITOR Anna Simet asimet@bbiinternational.com

Copenhagen, Denmark

EDITORIAL

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

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MAY 14-18, 2018

As one of the world’s leading R&D conferences combined with an international exhibition, the EUBCE represents the leading platform for the collection, exchange and dissemination of scientific know-how in the field of biomass. The conference program will address topics from biomass itself to bioliquids and biofuels for heat and electricity, transport and biobased products, covering all aspects of each value chain, from supply and logistics to conversion technologies, from industrial application of research results to impacts on the environment, from market and trade aspects to policy strategies, not least to the role of biomass as a source in integrated energy systems. www.eubce.com | +39 055 5002280

2018 Advanced Biofuels Conference JUNE 11-13, 2018

CenturyLink Center Omaha Omaha, Nebraska With a vertically integrated program and audience, the Advanced Biofuels Conference is tailored for industry professionals engaged in producing, developing and deploying advanced biofuels including cellulosic ethanol, biobased platform chemicals, polymers and other renewable molecules that have the potential to meet or exceed the performance of petroleum-derived products. www.advancedbiofuelsconference.com | 866-746-8385

2019 International Biomass Conference & Expo MARCH 18-20, 2019 Savannah, Georgia Organized by BBI International and produced by Biomass Magazine, this event brings current and future producers of bioenergy and biobased products together with waste generators, energy crop growers, municipal leaders, utility executives, technology providers, equipment manufacturers, project developers, investors and policy makers. It’s a true one-stop shop––the world’s premier educational and networking junction for all biomass industries.

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Carbon Capture with Storage: A New Frontier for Biomass?

BY BOB CLEAVES

As power prices have dropped consistently over the past decade, partly due to government renewable energy credits awarded lopsidedly to wind and solar, we have worked to ensure our members are capturing the many public benefits provided by biomass power. Aside from shoring up forest-based economies in many parts of the country, biomass can be credited with providing an incentive for healthy forest management, and with utilizing materials that need disposal. Yet, our members are only paid for the kilowatts of power they are able to put on the grid—a value that fails to adequately compensate biomass power facilities, and doesn't account for the carbon benefits of biomass. Two recent developments,

by Congress and in the state of California, may provide some additional benefits.

Earlier this year, Congress passed a much-hyped tax reform package. While the new tax brackets and corporate tax rates got the most media coverage, one provision in the bill could lead to drastic changes for some fuelbased energy technologies. The so-called 45Q provision establishes a tax credit per ton of carbon captured from power facilities. The legislation, sponsored by Sen. Heidi Heitkamp, D-North Dakota, was geared toward helping fossil fuel power generating stations benefit from reducing their carbon emissions, but it has potentially significant implications for the biomass power sector.

To be eligible for the credit, companies have to capture carbon dioxide produced from burning fuel, and then use it for a specified purpose: geological storage, enhanced oil recovery, or selling it commercially as a product, or a component of a product. The highest credit— up to $50 per ton—is awarded to companies that are able to store carbon dioxide geologically. The new law offers

8 BIOMASS MAGAZINE |MAY/JUNE 2018

significant improvements over previous tax programs.

The new program has an in-service date of 2026, and offers a 12-year stream of credits. This is in contrast to the previous 45Q, which was capped, and failed to offer any long-term certainty for investors in carbon capture.

While Congress enacted 45Q, the California Air Resources Board is busy amending that state's Low Carbon Fuel Standard. CARB's recently proposed amendment seeks to provide an enhanced carbon intensity score where alternative fuels, including power from biomass, deploy carbon capture and storage technology. Importantly, these same amendments also seek additional benefits for power producers, including biomass, where power is used as a fuel for electric vehicles.

We are working with our members to look closely at carbon capture in the context of 45Q and the LCFS. We’re also talking to coalitions and carbon capture advocates who can help us make sense of the new credit, and stay up-to-date on the new technology.

To be sure, there are still a lot of questions and obstacles to overcome before biomass can take full advantage of 45Q. For starters, the technology for capturing carbon is still very expensive, and even the high end of the credit probably doesn’t make carbon capture pencil out for biomass quite yet. But 45Q and changes to the LCFS could be an important next step in earning biomass power the compensation it deserves for providing long-recognized carbon benefits Author: Bob Cleaves President, Biomass Power Association bob@usabiomass.org www.usabiomass.org

A $5 Million X-Prize to Reinvent the Wood Stove

BY JOHN ACKERLY

An X-Prize design challenge with a $5 million dollar purse would get plenty of attention in the stove world. But would it transform the market? New technology needs to be in demand for innovation to be successful.

Since the 1950s, there have been three major technology advances in wood heating: the first was effective catalytic and noncatalytic secondary combustion in wood stoves that emerged after the 1988 U.S. EPA emission regulations; the second was the invention and development of the pellet stove that began in the late 1980s and ‘90s. The third is the development of very advanced, automated wood and pellet central heating systems that emerged in Europe, and entered the U.S. market in the past 15 years.

We think the next evolution in wood and pellet stoves is more advanced automation that lets computers improve convenience, maximize efficiency and minimize emissions, just like they do in our cars, and virtually every other modern combustion appliance. One key component is the lower cost oxygen or “lambda” sensors that measure oxygen in the flue gases, and can adjust the air controls according to the precise characteristics of the fuel in the appliance that day.

We need the same innovation and automation that is making homes and appliances smarter and more convenient. A good comparison is some of the basic communications we get from our car: bell tells us when we haven’t put on our seat belt, an indicator light turns warns us when our tire pressure is low, when we forget to turn off the head headlights or when the oil gets dangerously low. These communications improve the safety and usability of the technology, and protect our investment from being damaged.

A bell alerting us to a potential chimney fire would be like the light on the dashboard of car that signals the oil is dangerously low. A light signaling the need to clean parts of your pellet stove would be like the low tire pressure signal from your car.

But until manufacturers start adding things like this, consumers won’t know the potential exists—and older consumers are likely to resist the idea at first. However, if people see that automation works, improves efficiency and helps extend the life of appliances, there is good chance these features will be embraced.

Consider this: “Time-of-day” electricity pricing could open up major opportunities to save money with wood or pellet heat. For instance, homes with both heat pumps and a wood or pellet stove could use heat pumps when electricity is cheaper (typically at night), and use their wood or pellet stove during the more expensive peak hours. A smart home could automatically shift from electric to pellet heating throughout the day as prices shift.

Another major innovation would be electricity generation. Would you be interested in a wood stove that could recharge your tablet or cell phone, and power the lights in your home? In five years, there may even be a wood or pellet stove or boiler that affordably generate half as much electricity as residential solar panels during winter months in the northern parts of the North America and Europe.

The X-Prize would be happy to host a next-generation wood stove competition, but it requires outside groups to put up the prize money. If you don’t come from a sector that has companies, foundations or governments willing and able to sponsor an X-Prize, then it doesn’t happen.

Needless to say, we do not have $5 million to use the X-Prize platform. Luckily, many in the renewable wood heat community are mission-driven, and will compete on the National Mall mostly for bragging rights. And one or more of them may transform the market.

Our strategy is to hold that wood stove design competition ourselves, and see if we can galvanize enough creative talent to help reinvent one of the oldest technologies on the planet: the fire that keeps people warm in winter. How clean can it get? How might new technologies transform the industry, and how will government agencies respond if we can show that stoves can be consistently clean and efficient in the hands of consumers, at a reasonable price? The 12 stoves on the National Mall in Washington, D.C., Nov. 9-13, will hold some of those answers.

Author: John Ackerly President, Alliance for Green Heat jackerly@forgreenheat.org 301-204-9562

BIOMASSMAGAZINE.COM 9

US EPA Climate Changing on RFS?

BY MICHAEL MCADAMS

At ABFA, we’ve been keeping our eyes on the U.S. EPA during the first quarter of 2018. The EPA’s actions over the next several months will have ripple effects through the industry, in the RIN markets, and on Capitol Hill. As such, I think it appropriate to lay out the challenges ahead.

First and foremost, EPA has been party to a number of top-level political meetings at the White House, engaging with individual companies to discuss options for a politically driven compromise deal between corn ethanol and the merchant refining industry. During these meetings, Administrator Scott Pruitt publically called to cap the conventional pool D6 RIN value to address the alleged issues with the program’s compliance costs, a move that would seemingly reverse the current EPA’s own logic as spelled out in its defense for the rejection of the petitions to change the point of obligation under the RFS. I find this especially ironic, as this was one of the few things Pruitt and I ostensibly agreed upon on last year. This rejection stated the following: “Less obviously apparent, however, is the impact of the RFS program on the market price for the petroleum blendstocks that merchant refiners sell. In addition… all refiners and importers of gasoline and diesel fuel incur costs to comply with RFS obligations. This is true whether the refiners and importers acquire renewable identification numbers (RINs) by blending renewable fuels or purchasing separated RINs—meaning no fundamental inequity exists. Moreover, because all refiners and importers have RFS obligations in proportion to the fuels they produce or import, they all have similar costs of compliance related to the RFS program, and they all seek to recover those costs through the pricing of their product. Stated another way: Merchant refiners can indeed expend significant funds to purchase RINs needed to demonstrate compliance with the RFS program, but the cost is offset by a corresponding increase in the price of the fuel they sell. That market price reflects the cost of RINs. The same dynamic applies to both merchant and integrated refiners.”

Second, EPA is working twofold to eliminate any obligation small refiners might otherwise have under the RFS program, by granting additional waivers, and by seeking to

10 BIOMASS MAGAZINE |MAY/JUNE 2018

expand the definition of “small refinery.” As these small refiners produce almost 10 percent of the gasoline and diesel sold in the U.S., both of these actions will further undercut the RFS program. We must demand that EPA make these decisions with absolute transparency, clearly justifying for whom, and on what criteria, these decisions are made.

Indeed, let’s not forget the regulatory role EPA plays. In 2018, EPA has so far silent on approving new pathways and issuing new rules, such as a regulatory framework for biointermediates. We will need to continue fighting to ensure EPA does its job in this space, enabling growth in the program.

And, finally, given this EPA’s lackluster support for the RFS so far, it would be foolish to expect the 2019 renewable volume obligations (RVOs) to recognize growth in the renewable fuels industry. As with last year, we should expect the need to fight for growth in the D4 pool RVO. Last year, the proposed 2018 RVOs included lower volumes than actual production in 2017; the same could be true in this year’s proposed RVOs. We encourage everyone to begin preparing to file strong public comments in the event a disappointing proposal is issued.

Outside the walls of EPA, we can expect to see Capitol Hill actively working to legislatively reform the RFS program this year. In particular, Sen. John Cornyn has been working to find a reasonable middle ground between parties affected by the RFS. This middle ground will hopefully provide certainty for the industry, and I encourage you to stay tuned on that effort.

The fight ahead of us for 2018 is, at this point, welldefined. To achieve the vision that the 2007 RFS program set out to enact—a future for advanced and cellulosic fuels—we must work together to prevail this year. As always, your engagement in Washington is important. And at the turning point we seemed to have reached, it is more essential than ever.

Contact: Michael McAdams President, Advanced Biofuels Association Michael.mcadams@hklaw.com www.advancedbiofuelsassociation.com

Business Briefs PEOPLE, PRODUCTS & PARTNERSHIPS

Bubser joins SCS Global Services

SCS Global Services announced that Dave Bubser, a worldrenowned forest resource management and Bubser certification expert, has joined the company as its new vice president of forestry services. Bubser now oversees international business for SCS forest-based certification programs in the company’s natural resources division, providing strategic and operational guidance and support to program directors, and focusing on client relations, sales and marketing, auditing key accounts, and special projects. Prior to joining SCS, Bubser spent 17 years with the Rainforest Alliance, most recently overseeing all certification and assurance activities in the U.S. and Canada, as well as global carbon verification services.

Rockwell invests in Ecoremedy technology

Rockwell Venture Capital recently announced an asset purchase of Ecoremedy, an

12 BIOMASS MAGAZINE |MAY/JUNE 2018

innovative waste conversion technology that repurposes problematic municipal, agricultural and industrial byproducts into renewable energy and recovered nutrients while reducing carbon footprint, waste management risk and operating costs.

The Rockwell investment provides the newly formed company, Ecoremedy LLC, with the capital to penetrate the waste disposal market through a disruptive, managedcost financial model serving industries and municipalities plagued by unpredictable and unstable waste disposal costs. Rockwell Venture Capital, a longstanding Pittsburghbased firm with investments in technology-based engineering products, renewable energy production, and conservation initiatives, brings their financial and management strength to support Ecoremedy’s growth.

Audi, Global Energies partnership reaches key milestone

Global Bioenergies and German carmaker Audi have announced that a key milestone was reached in their multiyear agreement.

Using its Leuna Demo plant, Global Bioenergies produced high-purity renewable

isobutene that was further converted by the Fraunhofer Institute into high-performance gasoline additives including isooctane, ETBE and isododecane. These e-fuels were shipped to Audi, to be used in engine testing, in complement to those already performed by Global Bioenergies.

Currently, a small part of Global Bioenergies’ ton-scale isobutene production is directed toward e-fuels, using Fraunhofer’s lab-scale conversion unit. From the e-fuel produced, a batch of 60 liters was delivered to Audi. The e-fuel production capacity will be significantly increased in 2019, with the addition to the Leuna Demo plant of a dedicated fuel production unit, which will allow the production of renewable gasoline batches.

Wood chip heating fuel quality standard approved in the US A new quality standard for wood chip heating fuel is now available. The American National Standards Institute recently approved AD17225-4 Wood Chip Heating Fuel Quality Standard, which is a revised version of the international standard ISO 17225-4.

BUSINESS BRIEFS¦

The standard development project was coordinated by the Biomass Energy Resource Center, the American Society of Agricultural and Biological Engineers, the Biomass Thermal Energy Council, and Innovative Natural Resource Solutions LLC. Funding for the project was provided by the USDA Forest Service.

Biomass Power Association welcomes 5 new members

The Biomass Power Association recently announced several new members—Granite Shore Power, Veolia, Jamestown Energy, Koda Energy and Forest2Market.

Granite Shore Power is the owner of the 155-MW power facility Schiller Station in Portsmouth, New Hampshire, which has a 50-MW biomass unit that operates as a baseload unit, and two coal or fuel-oil fired units that are used as peaking resources.

Veolia is a multinational firm with expertise in energy operations, technology and engineering, with a mission to help custom-

ers address environmental and sustainability challenges in energy, water and waste. Biomass plays a big role in sustainability for Veolia, which owns and operates facilities around the world.

Koda Energy is a 23.4-MW biomass heat and power plant in Shakopee, Minnesota, utilizing organic fuels including wood chips, saw dust, municipal tree trimmings, ground pallets, oat hulls, wheat and sunflower screenings, and other forestry and agriculture waste.

Jamestown Energy is part owner of Pacific Ultrapower Chinese Station. The 19.8MW facility, located close to the community of Chinese Camp near California’s Stanislaus National Forest, utilizes wood fuel from forest management operations, urban construction and demolition wood, and agricultural products such as nutshells and orchard prunings.

Forest2Market, headquartered in Charlotte, North Carolina, delivers project development and operational support to new and existing biopower projects by providing fuel supply diligence utilizing proprietary market data.

Dublin Waste-to-Energy

Green Investment Group invests in Dublin Waste-to-Energy

Covanta Holding Corp. announced that the Green Investment Group Ltd. has closed on its investment in the Dublin waste-to-energy project. As an initial step of the joint venture, announced on Dec. 18, GIG agreed to invest €136 million for a 50 percent equity stake in the project. Covanta retains ownership of the remaining 50 percent of the project, and will continue to operate and maintain the Dublin facility.

Covanta initially expects to use the proceeds from the transaction to reduce outstanding debt. As projects in the joint venture’s combined U.K. development pipeline move to construction, the funds will be available to meet Covanta’s portion of project equity obligations.

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¦AUSTRALIA

BUILDING OUT

BIOMASS in the Land Down Under Will Australia use bioenergy to its full potential, or primarily serve export markets?

BY PATRICK C. MILLER

A

ustralia’s bioenergy sector is alive and brimming with ideas about how to keep pace with progress being made internationally. However, biofuels advocates believe the country lacks a clear strategy, as well as policies to harness the environmental benefits and economic potential that biomass energy offers.

“In contrast to the U.S. and Brazil, where supportive policy environments have 14 BIOMASS BIOMASS MAGAZINE MAGAZINE ||MAY/JUNE 14 MAY/JUNE2018 2018

led to sustained growth in biofuels production and consumption over the past several decades, the biofuels industry in Australia has not developed to the same extent,” states a paper issued earlier this year by the Queensland University of Technology, titled “Biofuels to bioproducts: a growth industry for Australia.”

Heather Bone, director of Bioenergy Australia, which represents the country’s bioenergy industry, recently told the Sydney

Morning Herald, "Biofuels have been the forgotten renewable, it has been the ignored cousin of solar and wind. The past 10 to 15 years, the industry in Australia has suffered from a lack of supportive policies or frameworks and risks emerged from policies that flip-flopped, and moving goalposts."

One bioenergy project that has attracted support from the state government in Queensland and potential funding through the Australia Renewable Energy Agency

AUSTRALIA¦

xxxx xxx PHOTO: XXX

Altus Renewables manufactures about 125,000 metric tons of wood pellets annually from a processing facility in Tuan along the east coast of Australia. The company plans to build a 500,000-MT wood pellet plant at Mount Gambier in southeastern Australia.

PHOTO: ALTUS RENEWABLES

(ARENA), is the Burdekin BioFutures Project, backed by the Inkerman Canegrowers Organization Ltd. A preliminary feasibility study for the proposed plant has been completed.

The plant is expected to produce 140,000 metric tons (MT) per year of pellets made from the tops and trash of sugarcane grown in the Burdekin Shire of the Inkerman District of North Queensland in northeastern Australia. The district pro-

duces about 1.7 million MT of sugar cane annually. The plan is to harvest the sugarcane waste products—normally burned prior to harvest—and turn them into pellets. But the pellets will likely be exported to Japan, where they’ll be used to generate electrical energy, not used in Australia.

“The outlook for bioenergy in Australia is relatively limited with respect to electricity generation,” says Stewart Peters, Burdekin project manager. “There has

been very little progressive support for the sector at a regulatory level, due to Green activism and their concerns regarding potential utilization of native forest residues.”

From Trash to Treasure

Peters believes the Burdekin plant offers Australia a number of clear benefits.

“It is a very environmentally sustainable project, immediately reducing carbon dioxide generation—even compared to forestBIOMASSMAGAZINE.COM 15

¦AUSTRALIA

based wood pellets, which require 50 to 100 years for trees to regrow,” he says. “In addition, it delivers substantial social outcomes in respect of jobs and elimination of extremely high levels of black ash— known locally as ‘Burdekin snow,’ which drops from the sky across large areas including population centers. The project creates a pathway for delivering academic research and development—the breeding of biochemicals such as high poly hydroxy butyrate into sugar cane leaf.”

Peters says sufficient sugarcane is grown and burned prior to harvesting, to enable production of around 1 million MT of pellets annually. “Imported biomass into Japan is projected to grow beyond 10 million tons per year as a consequence of environmental laws providing a 20-year, guaranteed feed-in tariff of around $280 per megawatt-hour,” he explains. “Emissions reduction and renewable energy gen-

16 BIOMASS MAGAZINE |MAY/JUNE 2018

eration is increasingly being mandated by governments seeking to meet their treaty commitments to lower carbon dioxide and other greenhouse gases.”

To Peters, it’s a question of whether Australia will take its lead in the development of cane farming and milling technology a step further by using the cane tops and trash as a large-scale biomass resource.

“The Burdekin is uniquely positioned to supply 750,000 equivalent dry tons of tops and trash to a potential biomass project,” he says. “This approach delivers additional value for the grower and processor. Sugarcane is a world-class biochemical platform that can just get better and better when the whole plant is utilized.”

Australia’s Forest Resource

In the southwestern region of the country in Fremantle, Plantation Energy Australia operates a wood pellet manu-

facturing company that uses a feedstock of noncommercial timber and harvest residues from sustainably managed timber plantations. The plant has two production trains that can produce 125,000 MT of pellets a year. It’s currently operating at 50 percent capacity. However, production is expected to ramp up over the next 12 months to meet a growing demand.

“The primary object of the project is to have a sustainable business that supports local jobs, creates certified renewable energy in a solid form that can be transported to regional markets and creates value for the shareholders of the business,” says Richard Allen, PEA managing director. “The business supports around 50 jobs, both directly and indirectly and, in a regional context, that is a significant contribution to the local economy.”

The company currently exports its wood pellets to Belgium, but according to

Allen, Japan and Korea are potential future markets because of their proximity. As he explains, there are two large forest plantation areas in Australia, which include the southern area in the west and the “Green Triangle” located between Victoria and southern and southeastern Australia. Radiata pine is grown and used for structural timbers. Eucalyptus globulus was originally planted for pulp wood, but is also used by PEA for wood pellets. “As paper demand has fallen, the use of these plantations for energy has become more important and new demand out of Korea and Japan will drive the expansion of the plantation estate going forward,” Allen says.

Like Peters, Allen expects opportunities for biofuel pellets within Australia to remain limited. “Australia is a large coal-fired power generator, but there is no cofiring in the country, primarily due to political pressure from the Greens, who are afraid the fuel will

ADDITIONAL ON-FARM PROCESSING TO SEPARATE TOPS AND TRASH FROM CANE BILLETS

The proposed Burdekin BioFutures Project in northeastern Australia would use sugarcane tops and trash to produce 140,000 MT of pellets annually. Currently, these parts of the sugarcane crop are burned prior to harvest.

PHOTO: INKERMAN CANEGROWERS ORGANIZATION

BIOMASSMAGAZINE.COM 17

Because of the expanding market for wood pellets in Japan and Korea, Plantation Energy Australia says it will double the production of its plant in Fremantle, Australia. The company currently exports its pellet production to Belgium.

PHOTO: PLANTATION ENERGY AUSTRALIA

be derived from old growth forests, and from the unions, who are looking to protect the jobs of coal miners,” he says. “The domestic heating market is also small, with limited uptake of heaters in the southern states where winter temperatures require home heating and office heating.”

Expanding Internationally

Altus Renewables, based in Loganholme, Queensland, specializes in the production and marketing of biomass-based fuels to generate renewable energy. Its fiber processing facility in Tuan can produce 125,000 MT of wood pellets annually. The pellets are exported to markets in the Unit-

ed Kingdom, Denmark, Korea and Japan for heating and cofiring in electrical generating plants.

Ian Sandeman, who’s been managing director and CEO of the company since 2007, says, “Australia has a long way to go before we make any real progress in reach our bioenergy potential. As wood pellet producers, we are completely dependent on the international markets, as there are no domestic bioenergy markets for our pellets.”

Altus Renewables is planning a project for the Mount Gambier region in southern Australia, a 500,000-metric-ton-per-year plant that will export wood pellets from the Port of Portland in Victoria to serve European and Asian markets. “We have recently completed our preliminary feasibility studies, and will look to get the formal feasibility study underway in the next couple of months,” Sandeman says. “If all things go according to plan. a final investment

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decision could be made by the end of the year. Once the formal feasibility study is completed and, assuming a positive result, the plant will take approximately 24 to 30 months to be constructed.â&#x20AC;?

Whether the proposed Mount Gambier plant will receive any government support remains to be seen. â&#x20AC;&#x153;South Australia had a change of government two weeks ago, but we assume that the incoming government will be as supportive of the project as the outgoing one,â&#x20AC;? Sandeman noted in early April. â&#x20AC;&#x153;At this stage, we are trying to determine whether the new government will be willing to provide any assistance to the project.â&#x20AC;?

Which Future?

The QUT bioenergy paper stresses that Australia is well-positioned to benefit from the growth of biobased fuel and chemical sector because of large amounts of biomass available in the country. It cites

a recent study showing that the total annual amount of biomass potentially available from all feedstocks in Australia is 78 million tons, which is forecast to increase to nearly 100 million MT in 2030 and 114 million MT, in 2050. â&#x20AC;&#x153;Given the investment and policy momentum in other countries, biofuels and biproduct industries will develop in Australia only with the creation of an enabling environment,â&#x20AC;? the paper says. To get there, QUT recommends a five-point planâ&#x20AC;&#x201D;a plan that quickly gained the support of Bioenergy Australia. The universityâ&#x20AC;&#x2122;s recommendations are to: â&#x20AC;˘ Develop a national biofuels, biobased products and bioeconomy strategy. â&#x20AC;˘ Implement a national biofuels mandate supporting the introduction of higher quality fuels. â&#x20AC;˘ Provide supporting mechanismsâ&#x20AC;&#x201D; education, incentives and infrastructure.

â&#x20AC;˘ Establish policy frameworks to grow new industriesâ&#x20AC;&#x201D;advanced and drop-in biofuels, biochemicals and biobased products â&#x20AC;˘ Support commercial developments through industry and research collaboration. â&#x20AC;&#x153;The development of a vibrant bioeconomy in Australia offers a significant economic growth opportunity that will assist to diversify Australiaâ&#x20AC;&#x2122;s economy and create regional and rural jobs. It is critical that Australia act now to capture this opportunity,â&#x20AC;? the QUT paper concludes.

In short, itâ&#x20AC;&#x2122;s a question of whether Australia will mostly continue to use the countryâ&#x20AC;&#x2122;s bioenergy potential to serve international markets or capitalize on the environmental and economic benefits of its homegrown biomass products.

Author: Patrick C. Miller Staff Writer, Biomass Magazine pmiller@bbiinternational.com

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¦Q&A

RALLYING FOR

RNG

The Coalition for Renewable Natural Gas’s Marcus Gillette discusses the organization, its goals and progress in expanding the production and use of RNG in North America.

BY ANNA SIMET

Tell us about the inception of the electricity on-site, but not used as natural Coalition for Renewable Natural Gas, gas vehicle fuel, due to a 1988 state law that effectively squashed the fuel industry. The law its mission and vision.

The Coalition for Renewable Natural Gas (‘RNG Coalition’ for short) serves as the public policy advocate and education platform for the renewable natural Gas industry in North America.

In 2011, co-founders Johannes Escudero and David Cox were working in respective roles in and around the California state legislature. They came across a small clean energy industry with enormous potential that was being unintentionally impeded from growth in a market that was in need of more renewable fuel solutions.

In California, methane gas (biogas) captured at landfills was being used to generate

22 BIOMASS MAGAZINE |MAY/JUNE 2018

essentially made it impossible to put California’s renewable natural gas into the interstate pipeline system, then draw it out of the pipe to power vehicles with ultra-clean renewable fuel. That needed to change. Together, with eight visionary companies that had the foresight to see that the U.S. lagged behind Europe in utilizing organic waste streams for its potential as renewable energy and fuel, Cox and Escudero launched the RNG Coalition.

Within months, we successfully corrected the 1988 law.

The RNG Coalition’s mission ever since has been to advocate for increased development, deployment and utilization of renewable natural gas so that present and future

Q&A¦

The California city of Santa Monica’s famous Big Blue Bus public transportation fleet is fueled with 100 percent Redeem, RNG Coalition member Clean Energy Fuels’ renewable natural gas fuel (RNG). The city estimates an annual average use of 2 million gallons of fuel, a total GHG reduction at over 9,100 metric tons compared to a baseline of ultra-low sulfur diesel fuel, or the equivalent of taking 1,926 cars off the road annually.

PHOTO: CLEAN ENERGY FUELS

BIOMASSMAGAZINE.COM 23

ÂŚQ&A

generations will have access to this domestic, renewable, clean fuel and energy supply.

Your members are wide-ranging. Who are they?

Members of the RNG Coalition encompass over 125 companies and organizations from the full spectrum of the renewable natural gas value chain. They include major gas utilities, waste haulers, project developers and operators, technology and equipment providers, renewable fuel distributers and retailers, and everything in between. They even include large and medium-sized universities and cities with a progressive approach to sustainability.

MARCUS GILLETTE

of our primary goal: to what extent an action will help the North American RNG industry double the number of RNG production facilities from 51 in 2015, to over 100 in less than 10 years.

From the 1980s to 2014, fewer than 40 RNG production facilities arose in North America. We recently completed a new database and map of North American RNG production facilities, which revealed that less than four years later, we have just celebrated reaching 75 operational RNG facilities!

The project also positively revealed that weâ&#x20AC;&#x2122;re well on our way to exceeding that target. There are two dozen more projects currently being constructed, and another couple dozen more planned to be built in the next two years.

Your major priority for 2017 stands in 2018. What is it?

You have an action plan in place, striving to make the aforementioned We filter our many advocacy and priority happen. Can you discuss educational opportunities through the lens the major initiatives in this plan, and

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Q&A¦ how these objectives will help achieve your goal for the industry?

First and foremost, we are dedicated to educating policymakers on how the RNG industry is a living, growing example of the benefit of clean fuels programs, since the intended design of these programs is to grow production and use of domestic renewable fuel. We collect relevant data and conduct research to enable the industry to communicate its economic benefits in terms of new clean energy jobs and investment into communities, and the associated environmental benefits our society has realized from RNG. We promote best practices specific to the industry, such as gas quality standards for pipeline injection. In this area, this year we’ve launched RNG Academy. It’s a continuing education program for gas utilities and LDCs to promote best practices and help industry employees better understand production, injection, and distribution of renewably sourced gas.

We host important events, like the RNG Summit in Washington, D.C., for RNG company representatives to communicate to lawmakers the on-the-ground business realities and the benefits of what they do. The RNG Coalition puts on a growing end-of-year annual RNG conference for executive leaders to provide real-time

‘We’ve seen changes in the fuel’s use over time to reflect that the highest and best use now for RNG is as renewable transportation fuel.’

–Marcus Gillette, Coalition for Renewable Natural Gas updates on relevant policy and market developments, celebrate milestones and recalibrate for the work to be done in the coming year.

And this year we’ll host the first RNG Expo, to enable companies in our growing industry to showcase RNG-related technologies, capabilities, innovation and services.

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¦Q&A

Describe the industry right now—what’s production at now compared to five or 10 years ago, where is the fuel going, and how is it being used?

We’ve seen changes in the fuel’s use over time, to reflect that the highest and best use now for RNG is as renewable transportation fuel. Prior to 2014, a majority of RNG was being used to generate renewable electricity, registered under many states’ renewable portfolio standards. But the economics where changing. Electricity prices had dropped and were struggling to continue spurring new production.

Much of RNG production has shifted to conditioning and compressing or liquefying the gas to be used as a renewably sourced, drop-in natural gas transportation fuel. Now, 70 to 80 percent of RNG in North America is being used to power vehicles with natural gas engines, primarily heavy-duty vehicles like city fleets, port trucks and passenger buses in metro areas that most often previously ran on diesel.

A major driver of growth in the U.S. has been the Renewable Fuel Standard. Can you talk about that and its influence?

As electricity prices lagged, the Renewable Fuels Standard, or RFS, is one driver that helped stimulate new projects to assist the U.S. in efficiently using waste streams for RNG production.

In 2014, thanks to the work of the RNG Coalition and industry to get recognition of RNG’s full environmental lifecycle benefits were officially recognized by the EPA. RNG used as a drop-in natural gas transportation fuel is an RFS-qualified advanced and cellulosic biofuel. The importance of the net carbon savings achieved by using RNG in transportation, reflected by the value of the cellulosic (D3) RIN, became a better driver for new facility development and growth in RNG production.

RNG production has made up over 95 percent of cellulosic fuel generation under the RFS in each year since. In 2014, about 50 million gallons (ethanol gallon equivalent or EGE) of RNG were produced under the RFS. In 2017, EPA shows over 242.5 million gallons (EGE) of RNG were RFS-qualified.

That’s an average annual growth rate of almost exactly 70 percent. What this means is, in the midst of a year when the merits of the RFS are being hotly debated in Washington, the RNG industry is perfect proof that the RFS is continuing to work as Congress intended, growing domestic production and use of cellulosic biofuels.

26 BIOMASS MAGAZINE |MAY/JUNE 2018

Q&A¦

What about Canada? What’s the driving force there?

In addition to transportation fuel programs, we are working with regional gas utilities to help establish and further goals to decarbonizing the gas distributed through their pipeline networks by way of RNG procurement commitments. Fortis BC and Union Gas, as examples, have goals in place to have RNG make up specific percentages of the natural gas distributed through their pipeline networks by target years in the 2020s and ’30s. In response, we’re seeing several new RNG production facilities coming online in British Columbia, Ontario and Quebec.

Are there any other important policy issues or pieces to watch, aside from the RFS? California’s Low Carbon Fuel Standard has played a similar role to that of the RFS, driving growth across the country and into Canada, of production of RNG to be used as renewable transportation fuel. Similar programs are being instated to encourage more production and use of RNG in respective regions.

The California Air Resources Board is currently considering and taking public comment on potential amendments to the state’s LCFS, including an end goal to extend the program to 2030.

We’re participating in a stakeholder process in Oregon, originating out of 2017 SB 334, that has the goal to identify and overcome barriers in the state to RNG production and utilization.

A similar bill also passed in Washington early this year, designed to spur more biogas and RNG production and use in the state.

Additionally, the RNG Coalition has two bills we’re sponsoring in California this year, one of which is similar to the RNG set by the Canadian utilities. Working in collaboration with California’s gas utilities, SB 1440, introduced by Sen. Ben Hueso, would establish a biomethane procurement program that requires gas corporations, Jan. 1, 2030, to procure their proportionate share of a total of 32 billion cubic feet of biomethane statewide.

The second bill, AB 3187, introduced by Assemblymember Tim Grayson, would authorize gas corporations to include in their rate bases all reasonable costs incurred to interconnect biomass conversion facilities and anaerobic digestion facilities to their common carrier pipelines.

Author: Anna Simet Editor, Biomass Magazine 701-738-4961 asimet@bbiinternational.com

BIOMASSMAGAZINE.COM 27

¦POWER

FROM IMPOVERISHED TO

EMPOWERED The Sustainable Energy Fund for Africa, a multidonor fund administered by the African Development Bank Group, is making headway in effecting real socioeconomic change in sub-Saharan Africa—and biomass power is an integral component.

BY RON KOTRBA

M

ore people in sub-Saharan Africa lack access to electricity than the entire population of North America. According to the African Development Bank Group (AfDB), 634 million people live without power on the continent of Africa—second in size and population only to Asia, covering 20 percent of the Earth’s total land area and home to more than 1.2 billion people. The vast majority of Africans with no access to electricity, 632 million, live in subSaharan Africa. The overall electricity-access rate in Africa is about 45 percent, and for subSaharan Africa this drops to 35 percent—up from 23 percent in 1990. To put this in perspective, per capita energy consumption in the U.S. is 13,000 kilowatt-hours (kWh). Excluding South Africa, per capita energy consumption in sub-Saharan Africa is just 180 kWh. And where access to electricity is available in Africa, the supply is often unreliable due to weak transmission and distribution infrastructure.

These staggering statistics have led AfDB to develop what it calls a “New Deal on Energy for Africa.” The goal is to provide Africans universal access to electricity by 2025. Renewable energies, such as biomass power, are vital to this plan.

“In itself, it is a business opportunity,” says Ousseynou Nakoulima, AfDB’s director of renewable energy, energy efficiency and clean cooking. “Sub-Saharan Africa is in the process of development, and energy and power are necessary to that end. Anyone engaging in this

28 BIOMASS MAGAZINE |MAY/JUNE 2018

can see the upside. To us, renewables are the obvious choice. We want a clean development pathway, compared to the course the more advanced economies took. And although the continent does not contribute much to climate change, it certainly bears the brunt of it.”

Estimates suggest desertification—the process by which a desert grows to encompass once-fertile land—is causing the Sahara Desert to expand southward 20 to 30 miles a year.

“Our interest is in mitigation of, and adapting to, climate change,” Nakoulima says.

He further stresses how biomass power technologies serve baseload power versus others that are variable and dependent on the weather. “Biomass—specifically agriculture residue—does not just provide a solution to the problems of energy access and renewable energy,” Nakoulima says, “but it drives business and the value chain all along the ag subsector. In nutshell, these are major advantages.”

Biomass fuel is a major source of energy in sub-Saharan Africa, accounting for about 80 percent of overall energy consumption, according to AfDB. Yet, investment in biomass energy makes up less than 4 percent. “If you look at the uses and sources of energy in subSaharan Africa, biomass for heating and cooking comprises the bulk of that,” Nakoulima says. “The 4 percent is formal investments in biomass energy, formalized biomass power or energy generation technologies.”

SEFA

The Sustainable Energy Fund for Africa, a multidonor trust fund administered by AfDB, was established in 2012. “At that time, this activity—renewable energy and energy efficiency—was at the margin of support in Africa,” Nakoulima tells Biomass Magazine.

SEFA is funded by four major donor governments: The U.S., the U.K., Italy and Denmark, the largest donor. “With their cooperation, we wanted to plant a seed for this activity to germinate and develop in the [AfDB],” he says. To demonstrate how fast renewables are moving from marginalization to mainstream in Africa, Nakoulima says just one year ago all energy activity at AfDB was housed in one department. “Now, we have one department for clean energy alone,” Nakoulima says.

Three financing windows exist under SEFA: project preparation, equity investments and enabling environment. The project preparation window provides cost-sharing grants and technical assistance to private project developers or promoters to facilitate preinvestment activities for renewable energy and energy efficiency projects. Grant funding tar-

Asticom Kenya Ltd. team leaders peer out at an informal settlement of Kibera, a suburb of Nairobi, Kenya, described as Africa’s largest urban slum. The company plans to build a 10-MW waste-to-energy power plant using municipal solid waste.

PHOTO: ASTICOM KENYA LTD.

gets development activities from feasibility to financial closure for projects with total capital investments of $30 million to $200 million.

The equity investment financing window addresses lack of access to early-stage capital for small- and medium-sized projects, in addition to the low managerial and technical capability of smaller entrepreneurs and developers.

The enabling environment leg provides grants to support public-sector activities that create and improve the enabling environment for private-sector investments in Africa’s sustainable energy space. “This includes advisory and implementation of legal, regulatory and policy regimes that provide clear and predictable rules for project development, implementation and operation, capacity-building activities to allow the public sector to act as a reliable and creditworthy counterparty in energy projects and programs,” AfDB states.

Of the $92 million in SEFA funding, $60 million to $70 million is already committed to projects, according to Nakoulima. As a result of its success, Nakoulima says AfDB is already looking at the next phase of SEFA. “There is interest from several existing partners, plus po-

tential new ones,” he says. The process for the new funding phase has already begun, and it will shift into high gear this summer.

So far, nearly 20 project preparation grants (PPGs) have been approved for SEFA funding in the renewable energy space. These include solar, hydro, and three biomass projects, among others.

Several criteria exist for SEFA funding.

Nakoulima says concentration is on sub-Saharan African projects, and the proposed venture must be located in an AfDB member country.

The cap-ex sweet spot for any given project is between $30 million and $200 million, but this may be waived if other criteria are met.

Biomass projects to receive SEFA funding must be based on wastes and residues. “We do not support any projects with specially grown feedstock—eucalyptus, for example,” Nakoulima says. “Furthermore, we look at the credibility of the developer, and how much skin they have in the game. They must have committed their own money prior to coming to SEFA.” Other criteria include fulfilling a country-specific need and desirable development outcomes. “For all three biomass projects ap-

proved for SEFA funding, we see significant development outcomes,” Nakoulima says.

Development outcomes not only include project-specific deliverables such as providing more baseload power to the grid, but also those that help improve the social dynamics on the continent—such as gender equality. “Women and children are responsible for energy provisions in the household,” Nakoulima says. “Agricultural harvesting is mostly done by women.

And for municipal solid waste (MSW), this is a sector with lots of young people who tend to be at the bottom of the economic ladder, so MSW projects would help provide youth employment and gender equity. Anything that enhances income sources for women is a key factor for us. We tend to look more favorably at projects of which gender equity is a part.”

All three biomass projects receiving SEFA funding not only have development outcomes that will empower women and children, but they are also led by women.

South Africa

Last September, SEFA approved a $990,000 grant to eThala Management SerBIOMASSMAGAZINE.COM 29

In sub-Saharan Africa, women are largely responsible for agricultural harvesting and providing energy provisions to the household. Here, women haul firewood home in Kibera, outside of Nairobi, Kenya, described as the largest urban slum in Africa.

PHOTO: ASTICOM KENYA LTD.

vices to support development of a 10-MW biomass power plant in Harding, South Africa.

The project is expected to deliver economic empowerment, and boost socioeconomic development in the community. Furthermore, it will help diversify South Africaâ&#x20AC;&#x2122;s coal-dominated power generation while demonstrating the viability of bioenergy, and help showcase corporate power purchase agreements as an important anchor for biomass power generation. â&#x20AC;&#x153;With the sponsor being a woman-led business, the project is aligned with AfDBâ&#x20AC;&#x2122;s Affirmative Finance Action for Women in Africa,â&#x20AC;? Nakoulima says.

Nomvuzo Tembe, eThalaâ&#x20AC;&#x2122;s group managing director and CEO, tells Biomass Maga-

zine that eThala means a place of safe keeping, such as a bank vault, in her home languages of Xhosa and Zulu. â&#x20AC;&#x153;The vision is to create wealth for the shareholders and the previously marginalized communities,â&#x20AC;? she says. â&#x20AC;&#x153;The population of Africa and the world is more than 50 percent women. The world can never advance leaving 50 percent of its human capital behind. eThala is contributing to changing that male leader stereotype.â&#x20AC;?

Tembe, whose call name is Nompumelelo, says the two founding families of eThala are passionate about sustainable holistic life, including ethical wealth creation. â&#x20AC;&#x153;We conceived an industrial big business model that can use communal farms to uplift many black

rural families out of poverty,â&#x20AC;? she says. â&#x20AC;&#x153;Our aim is to mitigate global warming for a sustained, holistic, good quality of life.â&#x20AC;?

Nompumelelo describes herself as a gentle, yet assertive soul. â&#x20AC;&#x153;Having been a corporate manager and business owner for years in a racially divided patriarchal society, being a black female I learned to deal with issues whilst staying focused on tasks at hand,â&#x20AC;? she says. â&#x20AC;&#x153;I found what helped is not to be confrontational and compete on gender, but just to run my race as me yet be assertive.â&#x20AC;? eThala Management Services is a holding company with three subsidiaries: eThala Agriculture, a rotational crop-farming entity and biomass provider to sister subsidiaries; eThala Biofuels, a biomass and sugar-juice-to-chemicals biorefining entity; and eThala Power Systems, a company focused on power generation from gasification of crop residues.

The company has a grander, $600 million vision beyond the initial $28 million 10-MW power plant, including a 44-MW power plant fed by sweet sorghum and sugarcane bagasse to be located 13 miles south of the 10-MW power station, and a colocated biorefinery to produce ethanol and biogas from sweet sor-

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POWER¦ ghum and sugarcane. “This is a 160 MMly (42 MMgy) biorefinery that will start at 40 MMly (10.5 MMgy),” Nompumelelo says. “Sweet sorghum, or ‘iMfe,’ is an African indigenous sugar crop. This is the eThala biorefinery sugar crop of choice. Local commercial sugarcane farmers would be in the mix, enabling feedstock security whilst increasing the farmed iMfe for eThala needs. The African Centre for Crop Improvements, part of University of KwaZulu Natal Agriculture Department, has developed the highest ethanol-yielding iMfe hybrid, which eThala will farm commercially.

This crop can be harvested in four months in the Harding and Mbizana area where eThala farming communities are. This region can get two iMfe harvests per year.”

Through eThala’s three divisions, the company envisions creation of 10,000 direct and indirect sustainable jobs in Harding, where unemployment is estimated to be 70 percent.

While most of the jobs will be created in agriculture, there is a ripple effect. “The increase in household earning has an economic ripple effect beyond the villages and town,” Nompumelelo says. “For instance, the certainty of power supply to the local municipality and

industries enables expansion and new businesses to set up shop, which creates more jobs, better homes built, more local spend capacity, and higher product offerings in this area is demanded, and so the Nompumelelo cycle goes.”

The 10-MW power plant project will be fed by forestry and timber waste. “The commercial forestry catchment area of 45,000 hectares, within a 30-mile radius of eThala site, will supply this power station,” Nompumelelo says. “The local sawmills generate a substantial amount of sawdust—about 50 percent of the processed timber—which is currently an environmental headache and is costly to manage. This is the additional eThala feedstock for this site.”

Nakoulima says the company intends to take advantage of returning empty capacity of trucks that deliver timber and forestry products to its suppliers’ factory operations sites. At 2 metric tons per MW per hour for guaran-

teed 24/7 power generation, the plant would require 480 tons of feedstock per day.

Gasification of the wood waste, rather than direct combustion, will be employed.

“This is more efficient than burning biomass in boilers,” Nompumelelo says. “We can then use the syngas to fire boilers.” She says it’s still too early to talk specific details about whether steam turbines for electricity generation or an organic rankine cycle system for combined heat and power will be employed. At press time in April, requests for proposals were being issued to the top six expression of interest respondents. eThala clients for the 10-MW demonstration plant will be corporate and government entities. “The model is to transmit electricity through Eskom networks—the national state electricity company—without selling to Eskom but renting the networks for electricity transmission,” a process known as “wheeling,” Nompumelelo says.

Nakoulima says the eThala project is at the preinvestment stage. “SEFA-funded preparatory and development activities are currently being procured—detailed engineering designs, environmental and social impact

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Uncollected waste blocks drainage and poses serious health risks in Kenya, particularly in informal settlements such as this one in Kibera outside of Nairobi.

PHOTO: ASTICOM KENYA LTD.

studies, financial and transaction advisory services, and legal advisory services,” he says, adding the preinvestment phase should be complete by first quarter next year with financial close shortly Tsuma thereafter. Nompumelelo says she expects commissioning of the plant in 2020, and SEFA funding has been critical for development.

The SEFA grant is a lifeline, Nompumelelo says. “It is meant to help prepare and package the project to be bankable,” she says.

“Even though eThala had done most feasibility and project development work, aligning these by independent consultants gives credibility and objectivity to the project.” She adds that some aspects, such as environmental and social impact assessment, are expensive. “This funding will help pay such consultants,” she says.

In addition to the SEFA grant, eThala has received $300,000 from a KwaZulu Natal trade and investment government agency.

Nompumelelo says people love the eThala concept, then doubt its feasibility since no one in the region has done this before, and thus assume it suggests there is a reason it won’t work. “The elderly, rural folk in South Africa simply assume big project ideas are owned by whites, thus assume we work for a white boss,” she says. eThala Management Services is a 100 percent black-owned and black female-led company.

Kenya

In Kibera, a suburb of Nairobi, Kenya, Asticom Kenya Ltd. received a $995,000 grant

32 BIOMASS MAGAZINE |MAY/JUNE 2018

from SEFA a year ago to support construction of a 10-MW, grid-connected municipal waste-to-energy (WTE) plant. “For Kenya, the government’s renewable energy feed-in tariff policy recognizes the additionality of biomass technology and thus accords it a relatively higher tariff compared to other forms of technology,” Nakoulima says. One of Asticom’s founding members, Leah Tsuma, a Harvardeducated biochemist, talks with Biomass Magazine about her company’s project and vision.

“The most important aspects of this project are its impacts on the general health of the community, socioeconomic status and environment,” she says. “Waste is one of the most serious health hazards in the country, especially in the urban informal settlements. During rainy seasons like now, waste- and water-borne diseases are prevalent, most of them fatal. This is because only 20 percent of waste generated is recycled.” With 80 percent of waste uncollected, it blocks drainage and open sewers. “Annually in Kenya, it’s recorded that almost 3,000 people die from these infections,” Tsuma says.

“The figure is higher because the documented mortalities are from hospital records—a majority do not make it to hospitals.”

Tsuma says in Kenya, all waste types are dumped either in illegal dumpsites or lie uncollected. “This leads to toxic waste types like heavy metal polluting the environment,” she says. “Lead poisoning among populations living close to dumpsites is prevalent. One of the objectives of the waste-to-energy project is to obviate these landfills.” The Kibera project site is one of several disposal sites that Nakoulima says receives approximately 1,000 tons per day of MSW, posing a health and environmental hazard to the estimated 500,000-plus residents of Kibera—described as Africa’s largest urban slum.

The company plans to anaerobically digest wastewater to produce biogas that will be purified and bottled for sale as cooking fuel.

Solid waste will be gasified for electricity generation. “We will use all waste types whose composition is approximately 70 percent organics, 20 percent plastics, 4 percent paper, 4 percent metal and the rest nonrecyclates,” Tsuma says.

Nakoulima adds that to produce 10 MW of power, the facility must receive 750,000 tons per year.

Asticom is currently in the design phase of its project, which is expected to wrap up

by June. Construction is expected to begin in July, according to Tsuma, with completion targeted for December, followed by commissioning through mid-2019, and scale-up thereafter.

Cost of the pre-scale-up pilot phase is $37 million. Total project cost is estimated at $160 million.

“The SEFA fund was the pivotal point for the final development stage of this project,” Tsuma says. “This grant was a game-changer … and has given this project a lot of confidence and exposure both locally and internationally. It has also brought the experts in the various technologies to our negotiating table.”

She says Asticom is in discussion with other funding organizations for additional grants and equity, including the African Guarantee Fund.

Asticom’s target is three full-scale facilities in Kenya. “With [Kenya’s] high unemployment rate, this project will impact the community greatly through its job creation strategy,” Tsuma says. “The trickledown effect will be bigger with the development of more facilities. With time, Asticom has set its eyes towards the western part of Africa, which is a vibrant society and has shown interests in partnerships.”

Tsuma says women play a significant role in development on the continent—a role that has been greatly downplayed until just recently.

“But with the emergence of the 21st century woman, things are changing,” she says. “The emergence of women in leadership roles, like the one held by former President of Liberia Hellen Johnson Sirleaf, is indication that society is finally accepting women can take up leadership roles. I have to say that clearly, for a woman in a leadership role like the one I have undertaken, the obstacles are greater than if I were a man. But my perceived weak position contributed to the success of the project.”

On a small scale, women are integral to the recycling process, Tsuma says. “During our surveys, 70 percent of the people we find picking recyclables from dumpsites are women and children,” she says. The biggest challenge, she

POWERÂŚ adds, is inadequate infrastructure and logistics of feedstock collection and transportation to designated points.

Overall, Tsuma says bioenergy development in Africa is moving forward, albeit slowly. â&#x20AC;&#x153;I would say it is slowly getting the right attention,â&#x20AC;? she says, â&#x20AC;&#x153;and with time, there is bound to be progress. The private sector is the major player, and we are hoping that African governments will finally see the shift in societal needs.â&#x20AC;?

Uganda

SEFAâ&#x20AC;&#x2122;s first biomass-related grant was issued December 2016 to Earth Energy Co. Ltd., a Ugandan project owned by Mandulis Energy, in the amount of $993,000 to help develop the countryâ&#x20AC;&#x2122;s first-ever biomass gasification project. â&#x20AC;&#x153;This grant [is] instrumental in both the deployment of an innovative technology in an African context, but also in providing a clean energy alternative to a country highly dependent on hydropower such as Uganda,â&#x20AC;? says Amadou Hott, AfDBâ&#x20AC;&#x2122;s vice president for power, energy, climate and green growth. â&#x20AC;&#x153;This is the sort of catalytic role and impact one expects from SEFA.â&#x20AC;?

In addition to 20 MW of power to be sold to the national grid, the biomass project is also expected to provide 15,000 farmers with an additional annual income of $720 per person from the sale of agricultural residue.

This is projected to create 6,000 new jobs in the outskirts of Gulu Town, in plantation sites and power plant operations. Other environmental and social benefits of the project include preventing deforestation by making affordable biochar briquettes available to rural communities as an alternative to firewood, reducing air pollution and empowering rural women. â&#x20AC;&#x153;Ideally, the present project will run exclusively on groundnut and rice husks that are being milled in close vicinity to the feedstock collection spots,â&#x20AC;? says Thomas Micholitsch, SEFA advisor and AfDB investment officer. He says more than 1,000 farmers will be contracted to gather these feedstocks at collection spots in a 60-plus-mile circumference north of Gulu, where the gasifier will be located. â&#x20AC;&#x153;Transport between these spots and the plant will be effected by trucks,â&#x20AC;? he says. â&#x20AC;&#x153;Earth Energyâ&#x20AC;&#x2122;s truck contracting system is quite unique, as we are quite critical of transport emissions that often offset any positive carbon dioxide effect. The collection spots and Gulu Town lie along a major transport

route between Mombasa and Juba. Trucks take goods from Mombasa to Juba, but return empty as obviously nothing is exported from South Sudan.â&#x20AC;? Earth Energy will make use of this empty cargo capacity by loading the feedstock onto these trucks at the spots north of Gulu and offloading them at the plant. â&#x20AC;&#x153;This means that no transport emissions are attributable explicitly to the project,â&#x20AC;? he says. To operate the 20-MW power plant, Micholitsch expects the facility to require 30 tons of ag residue per 1 MW of installed capacity. â&#x20AC;&#x153;The plant will hence require 600 tons of groundnut and rice husks per day,â&#x20AC;? he says.

In principal, SEFA does not fund projects whose primary feedstock will come from purposely established plantations, or sawmill residues unless Forest Stewardship Council certification can be clearly traced back, but the former is allowed when needed expressly for backup purposes. For the Earth Energy project in Uganda, eucalyptus acreage is on standby as a mere backup, Micholitsch says. â&#x20AC;&#x153;We estimate it will only be needed for a few days per year and only in case of hypothetical disruptions in the ag residue feedstock supply,â&#x20AC;? he says.

Project owner Mandulis Energy is another woman-led company managed and cofounded by Elizabeth Nyeko. Biomass Magazine was in communication with Nyeko but was unable to interview her before press time.

Micholitsch says the project, which is expected to be commissioned in third quarter 2019, will strongly empower rural women, as they will be the main partners in gathering feedstock. â&#x20AC;&#x153;Not so much from fields, but from mills, and taking it to collection spots,â&#x20AC;? he says. â&#x20AC;&#x153;Earth Energy will remunerate women for this work.â&#x20AC;? Earth Energy is also involved in the set up and expansion of the associated mill network. â&#x20AC;&#x153;Funding from SEFA is not only a vote of confidence in the Ugandan energy sector, but also evidence of the commitment that the AfDB has to achieve universal access to energy in Africa by 2025,â&#x20AC;? says James Orima, chairman of Earth Energy. â&#x20AC;&#x153;Our biomass power plant will be the first and largest in East Africa, injecting extra needed power into the Ugandan grid leading to industrialization and thereby helping the country move closer to a middle-income status.â&#x20AC;?

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

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¦CONTRIBUTION

Healthy Demand for Southern Timber Ensures Forested Lands Remain Forested

BY HANNAH JEFFRIES

T

he evidence is clear: Demand for forest products—including wood pellets, wood chips and other renewable wood resources used to generate energy—is associated with more, not less, productive forests.

A 2017 report by Forest2Market unequivocally illustrates that demand from the forest products industry has not resulted in dramatic losses to timberlands in the U.S. South, the most productive wood basket in the world.

Rather, it has encouraged landowners to invest in productivity improvements that dramatically increased the total amount of wood fiber in the South’s forests. Forest2Market’s indepen-

dent statistical analyses show that increased demand in the South since the early 1950s is associated with more acres, better growth and larger inventories.

The rise of the export pellet market over the past decade has caused some to question the impact that pellet mills are having on forest inventory. However, as data from a previous (2015) Forest2Market study on wood supply in the U.S. South shows, pulpwood harvests for export facilities are but a small fraction of overall harvests when compared to harvests for nonpellet facilities, and claims that this impact is disastrous are largely exaggerated.

Historical Perspective

Since the middle of the 20th century, the amount of timberland—unreserved, productive forest land—in the U.S. South has remained stable, increasing by about 3 percent between 1953 and 2015. During this period, economic growth and increased construction spurred consumer demand for forest products, which drove an increase in timber harvests (removals) of 57 percent. During this same period, the amount of wood fiber (inventory) stored in southern forests increased by 108 percent.

During the latter half of the 20th century, demand for forest products expanded signifi-

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).

34 BIOMASS MAGAZINE |MAY/JUNE 2018

CONTRIBUTION¦

195

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cantly as the U.S. population and gross domestic product (GDP) increased. Americans built more and larger homes, and until the dawn of the digital era in the 1990s and 2000s, consumed more and more paper to conduct their business and supply their homes. All of this fueled demand for timber to make the many forest products Americans use daily and, as a result, timber removals nearly doubled from 5.5 billion cubic feet in 1953 to a peak of 10.2 billion cubic feet in 1996.

Around the turn of the new millennium, technological improvements reduced demand for printing and writing papers, and increasing imports reduced demand for domesticallyproduced lumber and panels. The housing bubble of the mid-2000s buoyed domestic lumber and panel production until the Great Recession dramatically reduced housing starts and demand for these products. Today, timber removals in the U.S. South, which have

Removals (billion cubic feet)

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Removals (billion cubic feet)

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recovered due to improving housing markets, increased demand for personal hygiene and packaging products, and new demand from global bioenergy markets, are still below their 1990s peak, but they are 57 percent higher than they were in 1953—due largely to increased removals from private softwood stands.

Forest Management Improvements

Detailed research over the past 50 years, which was conducted in partnership with the U.S. Forest Service, university forestry departments, state agencies and industry partners, has resulted in fact-based improvements to forest management practices, including site preparation, fertilization, weed control and thinning.

These efforts have also enhanced the quality and survival of seedlings.

The result of these improvements has been an astounding nearly fourfold increase in the amount of growth achievable for seedlings

1983

2003

2013

0

Growth (billion cubic feet)

Removals and Growth

Removals and Acres

Growth (+112%)

established in the 2000s, compared to seedlings established in the 1950s. Largely because of the implementation of these practices on privately-owned lands, total annual timberland growth in the U.S. South increased 112 percent between 1953 and 2015, and growth exceeded removals by 38 percent on average. Healthy demand has made it easy for corporate and family landowners to take a long-term view, investing in more expensive management practices up front for greater returns in the future.

Most importantly, stable demand from the forest products industry helps protect forestland from its greatest, irreversible threat: urbanization.

Healthy Demand Mitigates Forest Loss

As with the total area of southern timberland, the total amount of forest land in the U.S. has been stable in recent years, according to USDA data. However, while total acreage

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KƵƌ WƌĞĚŝŬƚ/Z ŽŶͲůŝŶĞ ŐĂƵŐĞ ĚŝƌĞĐƚůLJ ŵĞĂƐƵƌĞƐ ƚŚĞ ŵŽŝƐƚƵƌĞ ůĞǀĞůƐ ŝŶ ƉĞůůĞƚƐ͕ ǁŽŽĚĐŚŝƉƐ͕ ƐĂǁĚƵƐƚ ĂŶĚ ŽƚŚĞƌ ďŝŽĨƵĞů ŵĂƚĞƌŝĂůƐ ĨŽƌ ƌĞĂůͲƟŵĞ ƋƵĂůŝƚLJ ĂŶĚ ƉƌŽĐĞƐƐ ĐŽŶƚƌŽů͘ Ź ŶŚĂŶĐĞ ƉƌŽĚƵĐƚ ƋƵĂůŝƚLJ Ź Ƶƚ ǁĂƐƚĞ Žƌ ƐĐƌĂƉ Ź ZĞĚƵĐĞ ƐƚĂƌƚͲƵƉ ƟŵĞ Ź ZĞĂůŝƐĞ ĨĂƐƚ ZK/ 'Ğƚ ŵŽƌĞ ĨƌŽŵ E ͘ ĐĐƵƌĂƚĞ͘ ĸĐŝĞŶƚ͘ WƌŽĮƚĂďůĞ͘ DĂŬŝŶŐ >ŝŐŚƚ tŽƌŬ ǁǁ͘ŶĚĐ͘ĐŽŵ BIOMASSMAGAZINE.COM 35

¦CONTRIBUTION

While forest land converted to other uses, other land use types 15 20 also converted to forest, resulting in a 0.7 percent net increase 15 in forest acres. However, of the 10 39 million acres of land that con10 verted to forest during this same 5 period, only 0.5 million acres, or 5 1.2 percent, were previously developed; most were previously 0 0 1953 1963 1973 1983 2003 2013 pasture or cropland.

This data shows that develRemovals (+57%) Inventory (+108%) oped land uses, which expanded by 58.7 percent between 1982 and 2012, place undeniable pressure on forhas remained stable, U.S. forests have not been ests.

Further, once developed, land rarely ever impervious to change. National land cover/ reverts back to forests.

Urbanization, not the DJH LVODQG & use data shows that approximately 36 million production of forest products, is the single acres of forestland converted to other land biggest threat facing forests today.

While landcover and use types between 1982 and 2012. owners harvest timber from their lands, they Of these converted acres, 17.7 million acres typically also regenerate that timber and keep (49 percent) were lost to development—more forests forested, especially if they can find than any other single land cover/use type.

Removals (billion cubic feet)

Inventory (billion cubic feet)

Removals and Inventory

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readily accessible, healthy markets for their timber.

Demand from the global forest products industry helps protect forests in the U.S. South.

For example, planted stands, which are some of the most productive, have been the least likely to succumb to the pressures of conversion. Between 1989 and 1999—the only period available for this kind of analysis—5.4 million acres of stocked timberlands in the U.S. South were converted to nonforest uses. Of these lost acres, the overwhelming majority (94 percent) were naturally regenerated forests, not planted stands. Not only does demand for forest products increase the productivity of forests and provide an incentive for landowners to continue growing trees, it also helps counter factors like urbanization and development, which permanently destroy forests.

The Future of Forests

While timberlands in the U.S. South have been stable to increasing since the 1950s, the pressures of urbanization are projected to result in forest loss over the coming decades. However, healthy markets for wood products are expected to mitigate, not exacerbate, these losses. High demand encourages producers to increase, not decrease, their supply of timber in the forest.

As Forest2Market’s comprehensive analysis illustrates, strong demand for forest products incentivizes landowners to maintain their timberlands, and invest in forest productivity in order to increase supply, which has resulted in more wood growing in U.S. South forests. The future of forests depends on healthy demand for forest products. This demand is vital for keeping forested lands forested and for diminishing the threat of urbanization.

Author: Hannah Jeffries Timber and Fiber Market Analyst, Forest2Market Inc. hannah.jefferies@forest2market.com.

980-233-4036

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