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■ table of contents

www.woodbioenergymag.com

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8 6

FROM THE EDITORS Should We Hold Our Horses

30

EDITORIAL INDEX What We Wrote About In 2014

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IN THE NEWS Enviva Is Blowing And Going

34

PRODUCT NEWS From Screens To RTOs

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CO-OP COMMITMENT NOVEC Joins The Wood Party

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BLACK OR WHITE? A Closer Look At Torrefaction

28

MEETING OF MINDS Great Discussions At USIPA Meeting

Cover photography: NOVEC (Jessica Johnson)

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Wood Bioenergy / December 2014

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table of contents ■

advertising index Advertiser Index is a free service for advertisers and readers.

The publisher assumes no liability for errors or omissions.

Volume 6

Number 6

Agra Industries

36

800.842.8033

Amandus Kahl Hamburg

11

770.521.1021

Andritz Feed & Biofuel

35

800.446.8629

Astec

3

423.867.4210

Baker-Rullman

37

920.261.8107

Bandit Industries

2

800.952.0178

Biomass Engineering & Equipment 26

317.522.0864

Bliss Industries

33

580.765.7787

Bois Energie 2015

38

+33(0)3.84.86.89.30

Bruks Rockwood

30

770.849.0100

CEM Machine

39

315.493.4258

Clariant

15

781.433.5900

Classen Apparatebau

10

+49(0)6222.57260

Columbia/Okura

29

877.204.7444

Co-Publisher/Adv. Sales Manager ■ David H. Ramsey Co-Publisher/Executive Editor ■ David (DK) Knight Chief Operating Officer ■ Dianne C. Sullivan

CPM/Roskamp Champion

34

800.428.0846

Dieffenbacher Gmbh

7

+49 (0) 7262.65.103

Fulghum Industries

35

800.841.5980

Publishing Office Street Address ■ 225 Hanrick Street Montgomery, AL 36104-3317

Kice Industries

9

316.744.7151

Lundberg

10

425.283.5070

Metal Detectors

33

541.345.7454

Mailing Address ■ P.O. Box 2268 Montgomery, AL 36102-2268 Tel: 334.834.1170 ■ Fax: 334.834-4525

Mid-South Engineering

13

501.321.2276

Morbark

40

800.831.0042

Premier Tech Systems

32

418.867.8883

Editor-in-Chief ■ Rich Donnell Western Editor ■ Dan Shell Senior Associate Editor ■ David Abbott Associate Editor ■ Jessica Johnson Associate Editor ■ Jay Donnell Art Director/Production Manager ■ Cindy Segrest Ad Production Coordinator ■ Patti Campbell Circulation Director ■ Rhonda Thomas

Price LogPro

39

501.844.4260

Promil Stolz

14

+33.2.37.38.91.93

Rotochopper

27

320.548.3586

Southern Environmental

21

850.944.4475

Sunomi

12

404.467.8800

Terex Environmental

12

989.588.4295

Twin Ports Testing

37

800.373.2562

Advertising Sales

U S Blades

13

800.862.4544

West Salem Machinery

20

800.722.3530

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North American Sales Representative Susan Windham ■ P.O. Box 2268 Montgomery AL 36102-2268 334.834.1170 ■ Fax: 334.834.4525 E-mail: windham.susan4@gmail.com International Sales Murray Brett ■ Aldea De Las Cuevas 66, Buzon 60 03759 Benedoleig (Alicante) Espana +34 96 640 4165 ■ Fax: +34 96 640 4022 E-mail: murray.brett.aba@gmail.com Classified Advertising Sales Bridget DeVane ■ Tel: 334.834.1170 ■ 800.669.5613 E-mail: bdevane7@hotmail.com A Hatton-Brown Publication Other Hatton-Brown Publications:

Timber Processing ■ Southern Loggin' Times ■ Timber Harvesting Panel World ■ Power Equipment Trade

Wolf Material Handling Systems

29

763.576.9040

Woodmac China 2015

31

+86.21.6208.7715

Wood Bioenergy (ISSN 1947-5306) is published six times annually by Hatton-Brown Publishers, Inc., 225 Hanrick St., Montgomery, AL 36104. Wood Bioenergy is free to qualified readers in the United States, including owners, managers, supervisors and other key personnel. All non-qualified U.S. subscriptions and all Canadian and foreign subscriptions (U.S. funds) are $50.00 per year. Subscriber Inquiries and Back Issue Orders—TOLL-FREE: 800.669.5613.

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■ from the editors

The UK Marketplace

And We Were Feeling Good

W

e love statistics. Maybe that’s why we love baseball. There’s nothing better than talking baseball in the language of statistics.

At the recent U.S. Industrial Pellet Assn. annual exporting pellets conference in Miami, the statistics were flying. Two forecast groups provided global and European industrial wood pellet demand figures for 10 years down the road, and it caused a stir. One group’s forecast for global demand was higher than the other, but the other’s was still pretty high. We’re not sure if those who criticized both forecasts really looked at them closely (you have to look at statistics very closely, particularly when they include those stacked bar graphs, when the total of something in a vertical bar is broken into its parts and you have to really concentrate to figure out the total of each part. We’re smiling, but we’re not kidding).

For about a half hour, two representatives of the United Kingdom (one an officer for power generator Drax, and the other a member of Parliament), speaking one after the other, basically said the forecasts were totally unrealistic; that the UK has about had its fill of government supported biomass power projects (even though the Brits say they enjoy biomass but, hey, the funding program in place for such projects is too difficult to figure out); and that the U.S. Southeast, home to the new generation of industrial wood pellet mills that have been and still are popping up like weeds in order, initially, to supply the UK and European market and, now, Asian market, is in danger of getting in over its head. In other words, beware of too many industrial wood pellet plants, and not enough industrial wood pellet market. Throw in the potential scenario of a tight woody raw material supply situation in the Southern U.S. and escalating woody raw material prices (due to the competitive nature of all of these wood pellet plants and all of the other wood products plants competing for the same raw material) and it could become a little sticky.

Of course Drax itself could lessen the load if it were to not build the two wood pellet plants it is currently building in the Southeast. So it could be that the Drax official was sounding the alarm in order to dissuade potential wood pellet competitors. Who knows?

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The two Brits also made similar statements about how these outrageous forecasts invite too much scrutiny from opposition groups. We don’t know if they were referring to zealous environmentalists or staunch coal industry lobbyists, but at least from a U.S. perspective we found these comments to be somewhat elementary. Hiding an industrial plant from the public behind a cluster of trees a mile off the highway doesn’t work anymore.

And anyway, why run from progress? This wouldn’t be the first time in history that forecasts have over-shot the moon, if indeed they’re proven to be off target.

They could be right on the money. After all, the respective firms that provided the forecasts are in the business of providing forecasts. They don’t miss very often.

Everybody in the conference audience who has recently built a wood pellet plant, or is about to, or is thinking real hard about it, is well aware of the potential uncertainties in an overseas marketplace. As for the warnings from the UK gentlemen: Okay, noted.

Wood Bioenergy / December 2014

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■ in the news Enviva Wants IPO, Is Adding Capacity Enviva, which recently announced it is building two additional pellet plants in North Carolina, and is purchasing the Green Circle Bio Energy pellet operation in Cottondale, Fla. from JCE, is reportedly seeking a $100 million initial public offering.

Enviva adds Green Circle to wood pellet portfolio.

Pointing to its growing production capacities and to forecasts for tremendous gains in global demand, Enviva believes it is positioned to capture a significant portion of this future wood pellet growth.

In the past three years Enviva has built and started up plants in Ahoskie, NC; Northampton County, NC; and Southampton County, Va., while operating purchased plants in Amory, Miss. and Wiggins, Miss. The combined wood pellet production capacity from these five facilities is 1.6 million metric tons. Enviva exports its product through terminals in Chesapeake, Va. and Mobile, Ala. The company also recently announced plans to build two facilities in Richmond and Samson counties in southeast North Carolina with an investment of more than $214 million.

The Green Circle facility reports a production capacity of approximately 650,000 metric tons per year. The plant benefits from an abundant supply of locally procured raw material, principally pine, and exports its product from the Port of Panama City, Fla. Like Enviva, Green Circle supplies wood pellets under long-term contracts to major European power generators that replace coal with biomass. Additionally, Green Circle

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supplies the European market for wood pellets to heat homes and commercial buildings and to produce process heat at industrial sites.

The Green Circle facility in Florida began production in 2008.

Cool Planet Receives USDA Commitment U.S. Dept. of Agriculture has issued Cool Planet Energy Systems a $91 million conditional commitment for a loan guarantee to support construction of the company’s first commercial manufacturing plant to be located at the Port of Alexandria, Louisiana. The plant is expected to produce renewable fuels by converting wood chips into high octane gasoline and aromatic blendstocks that are chemically identical to fossil fuels, according to Cool Planet.

USDA Secretary Tom Vilsack comments, “This partnership is the latest example of the Obama Administration’s continuing support for innovative, home-grown energy sources. USDA’s support for renewable energy projects like this helps create jobs in rural areas, promotes U.S. energy independence, and leads to further expansion of the growing and increasingly significant bioeconomy—all while reducing carbon pollution and other greenhouse gases.”

Cool Planet states it expects this commercial plant to be the first of hundreds of plants that its company builds across the U.S. Cool Planet broke ground at the Port of Alexandria earlier this year.

Site preparation and detailed engi0neering design work is under way, and the company expects to start construction in early 2016.

The technology combines a mechanical front-end that processes the biomass with heat and pressure into gases, with proprietary catalysts that convert those gases directly into Cool Planet’s green fuels, leaving a valuable biochar behind.

The company says its fuels are chemically identical to fossil fuels, and its CoolTerra product increases crop productivity and promotes

more robust plant health while reducing fertilizer and water requirements.

Cool Planet reports its strategic investors include BP, Google Ventures, GE, ConocoPhillips, NRG Energy, the Constellation division of Exelon, and leading venture capital investors, including North Bridge Venture Partners.

Earth Partners Buys Deadwood Biofuels The Earth Partners LP, a land restoration and bioenergy development company, announced it has acquired Deadwood Biofuels LLC, a company based in the Black Hills of South Dakota (Rapid City) that produces wood pellets for heating and industrial markets.

“We are excited to execute on our strategy of acquiring and developing a pipeline of bioenergy projects. I am confident with our supportive capital partners and our team’s experience spanning corporate finance, biomass markets, forestry, and pellet facility operations, we can continue to execute on the pipeline of opportunities we have established over the last four years,” says The Earth Partners CEO David Tepper.

Tepper says they are working closely with the Forest Service regional offices to use trees killed by the mountain pine beetle, along with timber residues that are destined to be burned in the forest as waste.

U.S. Army Awards Contract To ReEnergy In late September the U.S. Defense Logistics Agency awarded a 20-year contract to ReEnergy Black River to provide secure, renewable electricity to Fort Drum (New York).

“This is good news not only for ReEnergy, but for Fort Drum and the North Country region. This will enhance energy security and position Fort Drum as a leader in meeting the military’s ambitious renewable energy goals,” says Larry Richardson, CEO of ReEnergy Hold-

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in the news ■

electricity needs, which currently peaks at about 28 MW. The facility was to begin supplying 100% of Fort Drum’s electrical load as of November 1. Under the terms of the agreement, ReEnergy is building an electric transmission

line to directly connect the ReEnergy Black River facility to Fort Drum’s two substations. Prior to the completion of that line, which is anticipated for late summer 2015, ReEnergy will arrange for bilateral deliveries to Fort Drum’s sub- ➤ 12

ReEnergy Black River facility has 60 MW of generation capacity.

ings. “The ReEnergy team is proud to assist the U.S. Army in meeting its renewable energy goals.”

The Defense Logistics Agency, the entity that awarded the contract, provides the Army, Navy, Air Force, Marine Corps, other federal agencies, and combined and allied forces with logistics, acquisition and technical services.

ReEnergy Black River submitted a proposal in spring 2013 to the Defense Logistics Agency as part of a competitive procurement process to provide renewable power to Fort Drum, a U.S. Army installation that is home to 37,000 soldiers and family members and employs almost 4,000 civilians.

The federal government is increasing its demand for long-term renewable energy as a result of renewable goals established in the Energy Policy Act of 2005, Executive Order 13423, and the Energy Independence and Security Act of 2007. In addition, the Army has established a goal to achieve 1 gigawatt of renewable energy by 2025.

This contract is the largest renewable energy project in the history of the U.S. Army, according to ReEnergy Holdings.

The ReEnergy Black River facility, located inside the fence at Fort Drum, has 60 MW of generation capacity. Before it was idled in early 2010 by its former owner, the facility primarily burned coal to produce electricity. ReEnergy acquired the facility in December 2011 and invested more than $34 million to convert the facility to use biomass as its primary fuel.

The converted facility commenced operations in May 2013. The facility will provide all of Fort Drum’s

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■ in the news 9 ➤ stations through an energy service company.

ReEnergy owns and/or operates nine energy generating facilities with 325 MW of installed renewable energy generation capacity.

ReEnergy operates in six states.

Green Power Project Completes Financing Green Power Solutions of Georgia, LLC (GPS) reports it has completed financing for the company’s 34 MW power cogeneration facility in Dublin (Laurens County), Ga. at the SP Fiber Technologies paper mill.

GPS is a joint venture between ASK Partners and SP Fiber Technologies (SPFT). ASK owners are hardwood lumber manufacturer Beasley Forest Products & Land Care Services.

The facility is scheduled for commercial operation in June 2015, ac-

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cording to the participants.

“We have a lot of people to thank for fulfilling our dreams to become a green power producer,” says Darrell Beasley, President of ASK Partners. “Georgia Power, the Georgia Public Service Commission, Laurens County Economic Development Authority and the City of Dublin were all incredibly supportive and helpful in this quest.”

Avenue Capital and Beasley Green Power provided financing for the project.

SPFT is a producer of recycled ultra-lightweight containerboard, bag and kraft specialties papers and recycled content newsprint. The company also operates a mill in Newberg, Ore.

Host Terminals Will Operate Port Facility Host Terminals, Inc. announced its appointment by Baton Rouge

Transit LLC, a wholly owned subsidiary of Drax Biomass International, Inc., as terminal operator of the new Baton Rouge Transit Facility. Brian Taylor will lead the Host Terminal operations at the Baton Rouge facility as Terminal Manager.

Located in the Port of Greater Baton Rouge, Louisiana, the new facility was constructed to store and export biomass bound for the United Kingdom. Host Terminals is set to begin operations when the facility opens later this year. Host is on-site and working collaboratively with Drax to make final preparations and conduct training.

The facility will receive pellets from regional manufacturing facilities in the Gulf. At the port, the pellets will then be stored and loaded onto vessels for shipment to the United Kingdom. After a ramp-up period, the facility is expected to handle 1.2 million metric tons of pellets each year.

Wood Bioenergy / December 2014

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in the news ■

Host Terminals currently operates at eight terminal locations along the U.S. East and Gulf Coasts, with the start of operations at the Baton Rouge Transit Facility to be the first private facility in the Gulf operated by Host. Host handles approximately 5 million tons of bulk cargo annually and was awarded a new stevedoring license by the Port of Greater Baton Rouge earlier this year.

Canfor To Build Two Pellet Plants Canfor Corp., known for it vast sawmill operations in North America, plans to construct a pellet plant at each of the company’s Chetwynd and Fort St. John sawmill sites in partnership with Pacific Bioenergy Corp.

The two plants will have a combined annual production capacity of 175,000 tonnes of wood pellets, the

sale of which is tied to a long-term agreement with a power utility customer. The total investment of $58 million will include electrical selfgeneration capacity of 3 MW.

German Pellets Cites Earnings Growth

German Pellets says new Texas facility is spurring profits.

German Pellets GmbH in its Group Financial Report for the first half of 2014, referring to itself as the world’s largest producer and trader of wood pellets, generated sales of Euro 260.6 million (+10% yoy growth), and earnings before interest, taxes, depreciation and amortization (EBITDA) at Euro 25 million compared to 18.8 million in the previous year’s period. Earnings before taxes also developed positively, rising from Euro 4.7 million to Euro 8.3 million, while net income surged from Euro 1.9 million to Euro 5.1 million.

The key growth and profit

driver, according to the company, was the launch of the company’s first U.S. wood pellet plant in Woodville, Texas, which started operations in third quarter, 2013.

Overall, the wood pellet market has grown in nearly all Western European markets despite the mild winter, the company stated, adding, German Pellets plans to soon launch production of its second U.S. plant in Urania, La. “We will be further pursuing our course of expanding U.S. capacities,” comments Peter Leibold, Managing Partner of German Pellets GmbH.

December 2014 / Wood Bioenergy

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■ biomass power

Powerful

Cooperation

16

Wood Bioenergy / December 2014

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biomass power â–

SOUTH BOSTON, Va. rior to 2009, Northern Virginia Electric Cooperative (NOVEC) received all of its power supply through an alternate wholesale power supplier. But in 2009, NOVEC, which had been formed in 1983 by the consolidation of two electric cooperatives, began providing for its own power supply requirements to serve more than 150,000 customers in six northern Virginia counties.

NOVEC evaluated various options for meeting the power supply requirements, and the initial main sources included power purchase agreements (PPAs) with existing resources as well as bilateral contracts and PJM market purchases. These sources allowed NOVEC to sufficiently meet its load requirements, but NOVEC continued to consider other opportu-

P

nities and investigated partnering arrangements and self-build options.

Meanwhile federal legislators were piecing together a federal renewable energy program, and it appeared that any utility that had sales of 4 terawatts or greater would fall under this federal requirement. NOVEC’s forecast for the ensuing years revealed that it would meet that metric in short order. This potential requirement prompted NOVEC to include renewable energy projects in its evaluation.

In 2010, NOVI Energy, a Michigan-based developer, brought forth a proposal for a wood-burning biomass plant in South Boston, Va., in southern Virginia, and completed a feasibility study for the Halifax County Industrial Development Authority (IDA) that verified the economic viability of the project.

NOVEC operates in the Halifax County Industrial Park.

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■ biomass power

With the potential of a federally mandated renewable energy standard, NOVEC decided to move forward with a renewable energy project, and evaluated the NOVI South Boston project as well as PPAs with existing biomass and wind projects, other new biomass projects and buying existing renewable projects. “The results of these preliminary evaluations showed that NOVEC could construct the South Boston project at a cost equal to or lower than all of the other offerings whether they were renewable energy projects or not,” comments John Rainey, senior energy contracts originator at NOVEC. “A decision was made to move forward and perform a detailed review of the South Boston Project.”

The Parton Group was hired to conduct a detailed review of the wood basket in and around the South Boston region and also met with area loggers. The study concluded that the local wood basket would be sufficient to fuel the plant. A PJM feasibility study was filed to determine what upgrades would be necessary to connect to the power grid in the area.

NOVI, having negotiated a development agreement with NOVEC, optioned the 104 acre site in Halifax County Industrial Park (a former Georgia-Pacific plywood mill site), applied for and received all local and state permits and worked with NOVEC to receive state regulatory approval from the Virginia Public Utilities Commission.

Public meetings were held and the pending project received no opposiLayout of truck dumpers has enhanced truck tion. An engineering firm, Sargent & turnaround time.

Lundy, was hired to begin development of specifications and costs for construction.

“One of the remarkable outcomes was how much support was received from the local public for this project,” Rainey comments.

“We did not have any opposition filed by any member of the public through the various meetings and/or regulatory proceedings.”

He adds that the towns of South Boston, Halifax and the county of Halifax stood solidly behind the project and provided significant support as it moved through the final regulatory requirements for approval. And VDEQ (Virginia Dept. of Environmental Quality) worked in an expeditious manner to finalize and approve the necessary air permit.

In the fall of 2010, NOVEC filed for a Certificate of Public Convenience and Necessity (CPCN) with

The Bruks-supplied wood yard handles and processes up to 600,000 tons of raw material annually.

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biomass power ■

the Virginia State Corporation Commission for approval to construct, own and operate a 49.9 MW biomass power plant. NOVEC also requested a waiver to begin construction on a limited basis while the CPCN was under review. In December 2010, NOVEC began limited construction. The Virginia State Corporation Commission approved the CPCN in April 2011, allowing SBE to continue construction in full. NOVEC contracted with Fagen, Inc. as engineering, procurement and construction contractor (EPC) and construction under the EPC contract began, which throughout its course would involve up to 500 workers. Bibb Engineers provided design work on behalf of Fagen.

Flash forward to September 11, 2013, when the approximately $180 million project facility (supported by a $90 million loan from the U.S. Dept. of Agriculture and other loan/grant funds) was connected to the PJM regional electric transmission grid to produce electricity. Following some operational adjustments, the facility came commercially on-line several weeks later and celebrated a grand opening on November 14 before federal, state and local officials.

Today the plant supplies up to 6.5% of the cooperative’s power requirements, which is equivalent of providing electricity to 16,000 residential customers. The official name of the operation has transitioned from South Boston Energy to NOVEC Energy Production, Halifax County Biomass.

Davis, fuel procurement manager for NOVEC. The simple kiosk system recognizes the driver card and follows up with a few basic questions for the driver. Davis can monitor it remotely.

Davis also notes that the facility has received numerous compliments because of its quick turnaround time and lack of lines at the two truck dumpers. A truck should be in and out within six minutes, he says. He recalls one of their best days as 120 trucks within a 12 hour period—basically processing a truck every 5.5 minutes.

The facility was designed to enhance truck patterns with wider and longer lanes. The tippers are well spread apart on 60 ft. centers, giving trucks more room to negotiate and back up at the same time. Tippers dump onto the

Operations NOVEC contracted with PURENERGY Operating Services to operate and maintain the plant, which requires about 26 full-time employees. James Luckey of PURENERGY is the plant manager.

NOVEC management is very adamant about maintaining a clean plant. Misplaced items or woody debris aren’t allowed, including around the wood yard.

Area loggers bring in approximately 500,000-600,000 tons of woody raw material annually, mostly in-woods chipped pine and hardwood, from typically within a 50-mile radius of the plant, though it varies due to several facilities in the area, several of them new and competing for the same raw material. The facility consumes about 55-60 TPH, 24 hours per day, except for spring and fall maintenance outages. General spec calls for a clean chip at 3 inch minus.

Drivers are presented badge cards, which they present to the kiosk reader at the unmanned Cardinal scale house, notes Mike

NOVEC contracted with PURENERGY for plant operation.

FSE Energy provided a 400,000 pound-per-hour biomass boiler.

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■ biomass power

ground first which also increases truck throughput.

Drivers also operate the tippers.

Once they’ve unloaded, the drivers pull back around and weigh their trucks by using the same card. The software in the scale system produces a ticket.

Material is moved with large Caterpillar dozers into inventory, which is rotated first in first out.

BRUKS supplied the complete wood yard handling system, which is designed to receive, process and deliver biomass fuel to the boiler.

The wood yard has substantial in-

ventory capacity, giving the facility some flexibility. The wood yard consists of the two truck dump platforms, two stoker reclaimers with control modifications that process up to 75 TPH, a screening system, hog tower and associated conveyor equipment.

The conveying system takes material to the upper level of the boiler structure and feeds to a fuel storage bin, which holds about 30 minutes of fuel. It feeds with an auger system to distribution chutes and into the boiler.

FSE Energy provided a 400,000 pound-per-hour biomass stoker boiler with a Detroit Hydrograte Stoker, biodiesel startup burner. The steam turbine is an Alstom 30-stage impulse/reaction machine driving a WEG 4 pole generator through a gearbox.

Ash material is marketed to farmers for application as a liming agent. The plant generates just under 2% ash.

The facility operates a PPC electrostatic precipitator with SCR catalyst technology for NOX and CO reduction. Reclaimed water from an adjacent wastewater treatment facility is used in the cooling tower.

NOVEC contacted ACS Engineering to develop and manage the NERC program, using the ACS Matrics program to track and manage NERC compliance tasks.

Another interesting note is that ABB provided the power transformers, which were built at the ABB factory in South Boston.

Before 2013, NOVEC distributed electricity generated by renewable hydropower and landfill gases. Today its new biomass power plant diversifies its portfolio, and its customer-owners are active participants in the new era of alternative energy.

(Much of the project background information appearing in this article was taken from a presentation delivered by NOVEC senior energy contract originator, John Rainey, during the Virginia Chamber 2013 Governor’s Conference on Energy. Wood Bioenergy associate editor Jessica Johnson contributed to the development of this article.)

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Wood Bioenergy / December 2014

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■ torrefaction article

A Financial Analysis

Black Pellets

By William Strauss

F

utureMetrics published an original paper, “Black Pellets—A Financial Analysis of Costs and Benefits,” in July 2014. In the ensuing months the company received a number of comments from technology developers and others as well as some new data. This paper is a revised version of the original. The most important change is that this new analysis quantifies the benefit of the avoided costs of building dry storage.

As in the earlier paper, this paper deconstructs the components of the financial benefits and costs of black pellets. It compares torrefied pellets and steam exploded pellets with traditional white pellets. This analysis uses white pellets as the benchmark and calculates the net benefit or penalty of producing torrefied or steam exploded pellets versus white pellets.

The analysis first calculates the value of a shipload of white, torrefied, and steam exploded pellets delivered to a foreign port. It then calculates the additional costs required to manufacture torrefied and steam exploded pellets versus white pellets. This updated paper also includes the estimated financial benefit of hydrophobicity and assumes that the utility buyer will be willing to pay extra for the fuel based on the avoided cost of building dry storage.

This updated paper also quantifies the avoided cost of port dry storage for the producer. Subtracting the additional costs from the additional value provides the final metric, which will determine if there is a valid economic argument for torrefaction and steam explosion.

Both torrefaction and steam explosion result in higher energy density and higher bulk density pellets. In both processes, a comparison of the incoming wood and final densified product shows that the loss of mass is greater than the loss of energy. That change in bulk and energy

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densities is advantageous to logistics. More tonnes per unit of volume and more energy per tonne lowers the delivery cost per unit of energy. This paper measures the energy in gigajoules (GJ) per metric tonne and all of the comparisons are based on the cost or benefit per GJ.

Higher Value The analysis assumes that the buyer is willing to pay the same base price per GJ for any of the three types of pellets. The price for steam exploded pellets is adjusted based on the estimated avoided cost per GJ for not having to build dry storage. Using an assumed price of $160 per metric tonne FOB for white pellets and using the energy densities in the table below, the value of a GJ FOB is $9.14.

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The assumed bulk densities of the three types of pellets are shown in the table at left.

The assumed volume of the ship that

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torrefaction article ■

is loaded with pellets is 60,000 m3. For all three types of pellets the ship will “cube out” (fill up completely) before reaching a maximum weight limit. The table below shows the tonnes and GJ that would be loaded on a 60,000 m3 ship.

Assuming a shipping cost of $23/tonne2 for a 45,000 tonne load of steam exploded pellets, the estimated costs per tonne for shipping pellets are shown below.

As the table at left shows, fewer tonnes on a fully filled ship result in higher costs per tonne. This analysis also accounts for losses due to breakage (fines). The literature on fines produced from torrefied and steam exploded pellets is limited and in some cases contradictory. Based on information from several presentations on this topic, this analysis assumes the following unrecoverable losses during loading, transport, and unloading before delivery to the land-based carrier at the foreign port.

This yields a final net value of the delivered fuel. The table below shows the total value of the delivered fuel for each of the three types of pellets based on a FOB value of $9.14/GJ minus shipping costs. The total shipping costs are identical for each since the assumption is that the ships are fully filled in all three scenarios. The costs per tonne are different because there are also fewer tonnes on the ships carrying lower bulk density pellets.

This yields the following net value of the pellets at the foreign port in $/GJ. The table also shows the relative value added over white pellets.

As would be expected, the value of a delivered shipload of higher bulk and energy density fuel is higher than for white pellets.

Higher Cost Producing torrefied and steam exploded pellets requires higher costs. The table below shows the wood demands at an assumed moisture content of 50% for green wood and hog fuel and 5% for the finished pellets. (odt = “oven dry tonne” which would be the weight of the wood with 0% moisture content.)

The default for this section of the analysis is that the energetic gas released in the torrefaction process is sufficient to fuel both the reactor and the pre-dryer. This is based on data from two major technology developers.

The default for steam explosion is that the wood enters into the process reactor green. Therefore for this analysis the assumption is that there is no extra wood needed for pre-drying the steam explosion process feedstock.

This analysis also assumes that none of the energetic content in the liquid byproduct from the steam explo-

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â– torrefaction article

sion process is recaptured. Therefore the energy needed to generate steam is derived from a waste wood (hog fuel) boiler.

As the table shows, higher wood input is needed for both versions of “black� pellets.

The wood costs, and the bulk and energy densities yield the following wood cost per GJ:

Hydrophobicity The table below shows the additional wood costs over the costs for white pellets based on feedstock at $36/green tonne and dryer and steam generator hog fuel at $20/green tonne.

The total additional wood costs are computed for the same tonnage as the delivered ship load used above.

Also additional O&M costs are assumed for the torrefaction and steam explosion processes. In both cases this analysis assumes an additional black pellet cost for O&M, including electricity, of $4.00/tonne ($34/tonne for black pellets and $30/tonne for white pellets).

The increase in capital costs also has to be accounted for. The cost of the equipment only (not including other costs such as engineering, legal, land, etc.) per installed tonne per year of capacity for a white pellet plant averages about $160. FutureMetrics has very limited data on the extra capital cost for adding the reactors and other equipment needed for both black pellet processes. For this analysis the assumption is that cost per tonne of capacity per year for a torrefied project and for a steam exploded project is about $255 (versus $210 for a white pellet project).

The total additional amortized CAPEX column is based on the shipload tonnages shown above.

Normalizing all of these costs to $/GJ yields the following:

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The waterproof pellets provide a quantifiable benefit (i.e., a negative cost) in the avoided cost of dry storage.

There are two major dry storage costs: at the shipping port and at the power plant.

For the shipping port the model assumes storage for 35,000 tonnes with loading infrastructure at a capital cost of $10,000,000. Amortizing that over 10 years at a 7% discount rate and assuming 250,000 tons per year of flow, the cost is about $5.60/tonne. This is subtracted from the O&M cost for the steam exploded pellets. This changes the table above by lowering the O&M cost per GJ for the steam exploded pellets from an estimated $1.744/GJ to $1.452/GJ. The forgone cost to the utility also has value.

This analysis sets the base cost of building dry storage at $350 per kW of power plant capacity.

The baseline is then adjusted for the co-firing rate (15% for this model) and for the number of weeks of pellet fuel supply the power plant needs (three weeks for this analysis). The cost of building sufficient dry storage volume is then calculated and that is amortized over 10 years at a 7% discount rate. The values are further adjusted for power plant thermal efficiency and capacity factor (35% and 85% respectively for this analysis). The resulting metric is $0.65/GJ of avoided cost to the power plant from not having to build white pellet dry storage. This benefit netted out of the $/GJ costs.

Taking the delivered value of the pellets and subtracting the costs, and including the benefit of avoided dry storage for the waterproof pellets, the relative net benefit of the black pellets over the white pellets is shown in the table at left.

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torrefaction article â–

Based on the assumptions used in this analysis, there is a net improvement in the value of a shipload of torrefied and steam exploded pellets over white pellets.

If the torrefied pellets are considered waterproof, the net benefit is as follows:

Sensitivity Analyses There are several inputs to the model that have significant effects on the value of black pellets relative to white pellets. These impacts are tested by using simulation techniques.

Since one of the benefits of higher energy and bulk density pellets is to lower the cost per tonne for shipping, the impact of higher FOB rates should improve the benefit of black over white pellets.

The amount of wood entering the reactors has a strong impact on the viability of the black pellet processes. Both torrefied and steam exploded pellets lose their advantage with inefficient technologies.

Wood cost per tonne impacts all three types of pellets. There is a small negative impact on the relative benefit as wood costs increase.

The advantage of black pellets versus white pellets is based on the improved transportation costs per unit of energy delivered and, if waterproof, the value of the avoided costs for dry storage of both the shipping port and at the utility. The buyer could pay a lower price per GJ and the seller can earn a better profit per GJ as long as those adjustments do not take the benefit below zero.

The value of waterproofness is essential to the net benefit for steam exploded pellets. The tables below

shows the net benefits if we assume all black pellets are not waterproof or are waterproof.

This analysis does not quantify improved grindablity.

Improved grinding characteristics can lower operating costs for the power plant. However, based on data we have reviewed, this impact on the net benefit is relatively small compared to the logistics benefits to transport and storage.

As shipping costs rise, the attractiveness of black pellets relative to white pellets increases. Shipping costs are currently near historical lows and are likely to rise.

The advantage increases for higher shipping costs regardless of the reason (for example, longer distances or exchange rate movements).

As noted in the earlier version of this paper, perhaps the larger challenge is that as yet, the market for torrefied and steam exploded pellets barely exists. Partially that is due to the persistent failure of the technology developers over a number of years to get the mass and energy balances of the production processes in line with an economic model that works. Inefficient systems that have a high ratio of wood going in to processed material coming out will fail to deliver $/GJ fuel that is competitive with white pellets. Furthermore, utility buyers are used to white pellets and know that they can be produced consistently and reliably. Finally, there are multiple producers of white pellets with excess capacity so if one plant has an interruption, the demands for fuel can still be fulfilled.

Based on this analysis and on information from several technology providers, it would appear that the mass and energy balance challenge has been met by some major providers who already have a strong presence in the wood pellet sector. The other challenges will take time, patience and persistence.

Based on our analysis, we would expect that the normal utility grade pellet sometime in the not too distant future will be black.

William Strauss is president and founder of FutureMetrics, LLC and is one of the leading consultants in the pellet manufacturing sector. He is a frequent speaker at the biennial Bioenergy Fuels & Products Conference & Expo hosted

by Wood Bioenergy magazine in Atlanta, Ga. Related graphics accompany the above article on the web site, www.futuremetrics.com.

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■ pellets conference

Numbers

Game Conference featured several lively panel discussions.

By Rich Donnell MIAMI, Fla. atthew Rivers, director of fuel at Drax, spoke briefly about the UK electricity generator’s coalto-biomass conversion projects, and then proceeded to fire off warning shots as to the potential growth of the UK (and European) industrial wood pellet-fed power market to an audience composed of mostly U.S. industrial wood pellet producers at the fourth annual Exporting Pellets Conference hosted and produced by the U.S. Industrial Pellet Assn. October 1-3 at the Fontainebleau Miami Beach Hotel.

Rivers noted that one burner unit has been fully converted from coal to biomass, a second one is running with mostly biomass along with some coal, which will be fully converted soon, a third unit conversion should be completed in 2016, and the conversion of a fourth unit is planned but not a certainty. Currently regulatory support only entails the first three conversions, representing 4 million tonnes of pellets annually, Rivers said, and it’s questionable whether there’s available funding for future conversions in the UK, noting that the UK Levy Control Framework sets an absolute cap on renewable spending and “there’s no evident appetite” for more biomass.

Then Rivers hit hard: “The prospective scale of the European industrial market continues to be substantially over-stated,” he said.

“The U.S. industrial pellet sector is important,” Rivers added. “It is not on the stellar growth trajectory assumed by too many in this room.”

Looking at his co-participants on the Utilities Panel, including representatives from GDF Suez, RWE, Dong Energy and Vattenfall, Rivers said the numbers simply don’t add up to match the aggressive forecasts. Rivers also cautioned that such forecasts draw considerable attention from opposition groups.

Rivers’ comments echoed that of an earlier speaker, Nigel Adams, a member of the British Parliament from Selby. Adams noted that the majority of the UK populace appears to support the usage of biomass in renewable energy.

However, he cautioned that in the UK, biomass power may be “as large as it will get” once the known conversion projects are completed. Adams, too, disputed demand

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forecasts. “Are we in danger of getting slightly carried away?” he asked, adding, “The rapid growth pace is likely coming to an end for pellets in the UK.” Adams said attacks from groups opposing wood pellets will continue, but the industry must continue to counter this criticism and provide accurate information that these facilities “do not lead to higher accumulation of carbon in the atmosphere.”

Jens Price Wolf, director of Thermal Power Asset Management and Development, Dong Energy of Denmark, said there’s considerable potential for the conversion of the country’s aging plants to biomass fuel. Dong has recently converted a unit at its Avedore Power Station, adding extra wood pellet grinding machinery.

“It allows aging plant capacity to have a life into the future,” Wolf said. “Coal as we know is dead in our jurisdiction.”

John Bingham, director, Hawkins Wright, provided the company’s outlook, noting that global wood pellet production will be 25 million tonnes in 2014 (11 million industrial and 14 million non-industrial heating). In 2013, the UK led wood pellet demand with 36% of the 9.8 million tonnes of industrial pellet demand, followed by Sweden (16%), Belgium and Denmark (each 13%) and The Netherlands (10%).

Bingham said five large scale biomass power projects are still in the works in the UK, but it is unlikely that more will come forward. “Nevertheless the UK will be the world’s major pellet market for the foreseeable future.”

Meanwhile Bingham noted that the UK energy policy is unnecessarily complicated, citing various aspects of the program such as Contracts for Difference, capacity markets, carbon taxes, and Levy Control Framework caps.

In addition to aggressive pellet demand in The Netherlands, 3-3.5 million tonnes by 2017-1018, Bingham said Denmark could see a demand in pellets from 1.3 million tonnes to 3.5 million by 2018-2020. Belgium, which has about 1 million tonnes of consumption mainly at the Electrabel power station, could see through new projects an annual pellet consumption of 3 million tonnes by 2020.

South Korea is emerging, with pellet imports expected to be 1.3-1.5 million tonnes in 2014, driven by the requirements of Korea’s Renewable Portfolio Standard, which requires generating companies to meet an annually escalating renewable obligation or pay a penalty. Vietnam and Canada have been the main sup-

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pellets conference ■

pliers for Korea, followed by China, Malaysia, Thailand and the U.S. making some gains.

Bingham concluded that global industrial grade pellet demand is likely to plateau at around 36 million tonnes from 2020 onward. He also pointed to a steady growth in the residential/commercial heating pellet market.

Seth Walker, bioenergy economist with RISI, following the lively discussions involving wood pellet demand forecasts, began his presentation by delivering the statement that had caused much discussion: “Globally, wood pellet demand is projected to grow from an estimated 23 million metric tons in 2014 to 50 million metric tons in 2014.”

The forecast includes European heating, European industrial, Asia industrial and North America, with European industrial pellet demand more than doubling by 2024 to 20 million tonnes. European heating demand increases from 10 million to 17 million in 2024.

The European pellet heating market is quietly on the rise, Walker noted.

William Strauss, principal at FutureMetrics, spoke on the potential for power plant conversions in North America. “The potential for significant growth in the industrial pellet market is in the conversion of North American pulverized coal power plants,” Strauss said.

“There are hundreds that can be converted economically and can produce low cost, dispatchable, and job

creating electricity,” Strauss said.

Strauss said there are 428 operating pulverized coal plants in the U.S. (greater than 50 MW), with a median age of 48, and 77% of the plants are older than 35 years.

Strauss said assuming that any conversion from coal to wood pellet fuel will be plants that are older than 35 years, the primary new major capital cost for a conversion from coal to wood pellet fuel would be the fuel storage and handling systems.

A Finance Panel featured representatives from RBC Capital Markets, Ewing Bemiss, GSO Capital Partners, Stern Brothers, Hancock Renewable Energy Group and Riverstone Holdings.

Carl Williams, managing director at Riverstone Holdings, said one of the keys to the company’s renewable energy direction is selecting partners. “You measure the character of your partner, the alignment of interests. We’re about building businesses and it’s as much about what our partner is as what they’re trying to do.”

Patrick Fleury, principal, GSO Capital Partners, said of the wood bioenergy industry, “It’s a relatively young industry with a few folks who are experienced and others trying to make it work.” He said his firm’s confidence in the experienced leadership at Rentech, for example, provided comfort to GSO Capital Partners in its investment in Rentech.

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2014 editorial index FEBRUARY

From The Editors March 18-19: Atlanta Is The Place. Page 6.

Wood Bioenergy Conference.

Page 16.

GREC Comes On: Commercial Operation. Page 22.

Bio Development: Projects Moving Onward. Page 26.

It’s All Academic: Universities And Biomass.

Page 28.

APRIL

From The Editors Biomass Power: On A Hot Streak. Page 6.

Nippon Paper Diversifies: Green Power Investment.

Page 20.

Fibreco’s Focus: Pellet Logistics. Page 26.

JUNE

From The Editors Wood Pellets: Back To The Forefront. Page 6.

Wood Bioenergy Power Play. Page 20.

Lignetics: Expanding Horizons. Page 26.

Pellet Manufacturing: Energy And Carbon Balance. Page 36.

AUGUST

From The Editors Pellet Production: The Die Is Cast. Page 6.

John Keppler: Champion Of Wood Pellets. Page 18.

Enviva Pellets: Northampton Follows Suit. Page 22.

Slash Solutions: Better Grinding, Easier Access.

Page 26.

OCTOBER

From The Editors Separated By Distance, Age: But Much In Common. Page 6.

Avista Utility: 30 Years of Success. Page 14.

TP&EE Will Draw Primary Producers. Page 19.

TP&EE Exhibitors List.

Page 20.

Chippers & Grinders.

Page 32.

KaJ’aeh Enterprises: Aggressive Expansion.

Page 42.

DECEMBER

From The Editors The UK Marketplace: And We Were Feeling Good Page 6.

Powerful Cooperation: NOVEC. Page 16.

A Financial Analysis: Black Pellets. Page 22.

U.S. Industrial Pellet Assn.

Meeting. Page 28.

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— ADVERTORIAL —

—Bag Packaging Solutions—

P

remier Tech Chronos, a world leader in the engineering and manufacturing of integrated packaging solutions for wood pellets, offers a wide range of solutions, from conventional to robotic, from manual to full automatic and from individual components to a complete packaging line that allow customers to reap the benefits of their investment.

Its Form-Fill-Seal bagging technologies, with hundreds sold worldwide, allows tremendous reduction in packaging material costs while offering great performance and reliability. These bagging machines can bag up to 35 bags per minute and ensure low maintenance, reduced labor, easy adjustments and quick changeover, and lowest package cost.

Premier Tech Chronos recently celebrated the sale of its 300th FFS Series Form Fill and Seal bagging machine to the Canadian mulch and wood shaving company, Transfobec Mauricie.

For more than 20 years, Premier

32

Tech Chronos has provided weighing, bagging, palletizing and stretch wrapping solutions to wood pellet producers. Visit ptchronos.com to learn more about packaging equipment designed for wood pellet production lines.

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■ product news Skövde Municipality Turning To Biomass Valmet will supply a biomass based power plant to Skövde Värmeverk AB in Skövde, Sweden. The plant will produce district heat to the local district heat network and electricity to the national grid. It is scheduled to start up in late 2016. The value of the order is about EUR 30 million.

The boiler will be fueled with wood chips and bark. With the investment, Skövde Värmeverk will be able to reduce the amount of fossil fuel used, and meet the increasing demand of district heating in its operating area.

Carl-Johan Andersson, Managing Director, Skövde Värmeverk, comments, “This is the largest environmental investment that the municipality of Skövde has ever made.”

Valmet’s delivery from fuel reception to stack will include a bubbling fluidized bed (BFB) boiler plant including a biomass-fired HYBEX boiler, a flue gas condensing scrubber, a combustion air moisturizing tower, CO2 and NH3 scrubbers, condensate treatment, electrification, instrumentation and automation. Excluded are the turbine, generator and civil works.

The boiler will have a thermal capacity of 38 MW. Skövde Värmeverk is a limited liability company owned by Skövde municipality and was established in 2003. The company’s task is to produce environmentally friendly electricity and district heating in Skövde municipality.

Russia Event Includes Bioenergy Day ExpoDrev Russia was held September 9-12 at the Siberia International Exhibition Business Centre in Krasnojarsk, Russia, co-organized

by OOO Deutsche Messe RUS, a subsidiary of Deutsche Messe (Hannover, Germany) together with the Krasnoyarsk Fair. The event has established itself as an important trade

34

show in the region for the forestry, wood processing and woodworking industries.

Around 4,000 attended.

One of the popular events was the Bioenergy Day, which took the form of a conference and included an interesting talk by Dr. Ute Seeling, Director of the German Forestry Council (Kuratorium für Waldarbeit und Forst e.V.), on current trends in Germany and Austria.

Conference participants concurred that it is necessary to create an integrated platform that will combine efforts of federal and regional authorities, non-governmental organizations, and business community for implementation of biotechnology. For this purpose an online meeting system will be launched in the nearest time to help specialists from Russia and abroad discuss pressing issues and share experience with colleagues in real-time mode.

Komptech Enhances MultiStar Screening

The L3 emphasizes flexibility, easier maintenance and longer life.

Komptech’s Multistar L3 is the latest improvement to its line of Multistar star screens, based on Komptech’s “coarse before fine screening” concept. Along with top throughput, this also has a major influence on screening quality. The screen decks with their rubber stars and the patented Cleanstar cleaning system give the L3 an excellent output quality.

All machine components are electrically driven. The power can come from the grid for the lowest cost, or from the on-board generator.

Higher flexibility, simpler maintenance, more toughness, intuitive operation, and new design are the

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product news ■

major features of the new L3. It has the same coarse and fine screen deck dimensions as its predecessor, and delivers exactly the same throughput. But there is a key difference—the new cartridge design of the screen decks means they can be removed and switched in a very short time. This simple removal makes maintenance, conversion and particle size changes easier, and represents a major increase in the machine’s flexibility, especially in terms of grain size.

Visit komptech.com.

Arlington Enters Biomass Market Arlington Plastics Machinery, a seller of plastic processing equipment, is branching out to sell the Crushmaster line of equipment for size reduction and processing of biomass.

Crushmaster features a German

engineered line of granulators, shredders and briquetting presses designed for biomass. “There are quite a few similarities between the equipment for plastics and equipment for biomass,” says Arlington Vice President Alan Clarke. “Shredders and granulators are something we sell every day to plastics companies, and now we’re going to take our equipment knowledge and expand to a new customer base.” Visit arlingtonmachinery.com.

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■ product news Lundberg Promotes Geoenergy ESP, RTO

Lundberg has the exclusive ownership rights to the Geoenergy E-Tube wet electrostatic precipitator and the GeoTherm/Geocat family of regenerative oxidizer emission control technologies.

Since 1984 more than 150 Geoenergy E-Tube wet ESPs, treating more than 10,000,000 cfm of waste gases, have been successfully applied. These installations have included all common forms of wood dryers including gas/steam/wood heated veneer dryers, rotary drum dryers and flash tube dryers.

The E-Tube wet ESP design exploits the intense electric field of the disk-in-tube configuration to yield the best particulate removal performance possible.

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Lundberg’s GeoTherm and GeoCat regenerative oxidizers have also received wide acceptance. Since 1995, more than 65 of these units have been installed, treating more than 7,000,000 cfm of VOC-contaminated emissions.

Both of these regenerative oxidizer products have consistently achieved more than 98% VOC destruction and, at times, have been tested at greater than 99% efficiency. At several GeoCat installations the catalytic operation allows the oxidizer to run with virtually zero auxiliary fuel.

Recently, Lundberg updated the GeoTherm and GeoCat designs.

The new GeoTherm II and Geocat II products offer the same excellent VOC destruction efficiency and low energy consumption as the original design with substantially reduced cost.

Both wet ESP and regenerative oxidizer products are supported by Lundberg’s experience staff of engineering and field service professionals. This support team will tackle any project ranging from simple equipment-only supply to the most complex turnkey installation project either domestic or international.

After a project is started up, operating customers can continue to rely on Lundberg’s field service staff.

Visit lundbergassociates.com.

Terex Hosts NA Dealer Event Terex Environmental Equipment, Farwell, Mich., hosted a Dealer Training Event and Conference during September for its North American dealers. The theme of the event was “Get Your Hands Dirty” and the first day was spent on site.

The full range of nine arborist chippers was demonstrated, including the new TAC 720 with gasoline engine. In addition, the TSL 220 with forestry mulch attachment and the TSL 210 were shown. Terex launched its new stump grinder line as well.

The second day was spent at the Dealer Conference where Martin Dummigan, Business Line Director, shared the Terex Environmental Equipment business results and strategy. Information was also shared from the TEE engineering, technical and customer support and marketing teams.

Firefly AB Sets Temp Standards Firefly AB reports it is the first company in the world that is FM approved for spark detectors detecting hot particles down to ≥250°C (≥482 °F) and for spark

Wood Bioenergy / December 2014

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product news ■

detectors detecting down to ≥400°C (752 °F).

Firefly has had several other third party approvals but this is the first time the detection temperature has been approved. Visit firefly.se.

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