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Drax U.S. Pellets Plants Coming On
UK-based electricity producer Drax reports it has two wood pellet mills in the Southern U.S. moving into production mode. Drax says its Amite BioEnergy wood pellet plant in Gloster, Miss. has produced pellets and has a March COD (commercial operations date). Amite has a 450,000 tons annual production capacity, as does the Drax Morehouse BioEnergy wood pellet plant near Bastrop, La., shown here. Morehouse is commissioning its log line and has a COD of June. Both operations are expected to reach full production six months following COD. Drax is also putting into operation a port facility, Baton Rouge Transit, in the Port of Greater Baton Rouge (La.), with first shipment expected in the second quarter. Drax has been converting its power plant operations in England to predominantly biomass-fueled (imported wood pellet feedstock) electricity generation, having already converted two coal burner units to biomass fuel, with a third one planned for conversion. Drax states that biomass now accounts for 30% of its generation capacity. Drax also states it is evaluating further investment in a potential third U.S. Gulf pellet plant; Eastern U.S. wood pellet operations; and carbon capture and storage. The company said 2014 was a challenging year with significant regulatory headwinds and major deterioration in commodity markets.
Lignetics Merges With Bear Mountain
Two long-established wood pellet manufacturing companies in the U.S. announced a merger that will create what they report is the the largest residential wood pellet fuel producer in the U.S. Ken Tucker, CEO of Lignetics, Inc., and Bob Sourek, CEO of Bear Mountain Forest Products, Inc., announced that the newly merged business will have a production capacity of approximately 450,000 tons of wood pellets per year, and that the company will also be the only pellet manufacturing company that will have wood pellet manufacturing plants on both the East Coast and the West Coast.
The combined company will have plant locations in Brownsville and Cascade Locks, Ore.; Sandpoint, Idaho; Glenville, West Va.; and Kenbridge, Va.. The merger brings together some of the industry’s well-known brands including Golden Fire, Lignetics, Bear Mountain, America’s Best, Pres-to-Log, Dry Den, Cozy Den and EZ Equine.
“Completing this merger marks the beginning of an exciting new chapter in our two companies’ history, making us the market leader in the residential wood pellet industry in the U.S.,” states Tucker. Sourek adds, “We are excited about the merger with Lignetics and the ability to offer all of our customers a more diverse product offering, now from five different plant locations.”
Financing for the transaction was provided by Taglich Private Equity LLC, management and Gladstone Capital Corp. Tucker and Sourek note that the transaction will give the company the capital base to pursue expansion plans at their current facilities, as well as exploring potential future add-on acquisitions.
Lignetics was founded in 1983 and is one of the pioneers of manufacturing premium wood pellets and Pres-to-Logs fire logs for home heating.
Since 1988, Bear Mountain Forest Products has been a driving force in the wood pellet fuel industry across the Western U.S using 100% Douglas fir.
Rentech/NEWP Buys Allegheny
New England Wood Pellet, LLC, a Rentech company, has acquired the assets of Allegheny Pellet Corp., a producer of wood pellets for the domestic heating market with a wood pellet plant in Youngsville, Pa. The acquisition expands New England Wood Pellet’s market position as the largest wood pellet manufacturer for the U.S. heating market with facilities in Jaffrey, NH; Schuyler, NY; Deposit, NY; and Youngsville, Pa.
Allegheny’s wood pellet plant in Youngsville, Pa. has been operating since 1993. The company plans to add staff to increase the Allegheny plant’s production to approximately 50,000 tons over the next year to meet demand for pellets in Allegheny’s target market of Pennsylvania and New York.
“Rentech and New England Wood Pellet share Allegheny Pellet’s belief that pellet fuels made from sustainably produced biomass can play a major role in reducing demand for fossil heating fuels,” according to a statement.
The Youngsville facility processes residuals from local sawmills into wood pellets for sale through big box stores, specialty retailers and bulk sales channels. The plant has historically experienced relatively stable feedstock costs due to a consistent supply of residuals within an economic haul radius of the facility. Allegheny’s customers are responsible for the costs and logistics arrangements of pellet deliveries. Allegheny will be fully integrated into NEWP and will operate as its fourth pellet plant.
NEWP intends to expand the plant’s annual production from approximately 36,000 tons under a four-day work week to approximately 50,000 tons under a seven-day work week. The additional production will help meet strong demand for pellets in Pennsylvania and New York.
NEWP acquired all of the assets of Allegheny for approximately $7 million in cash, using the proceeds of a five-year, $8 million term loan.
Rentech, Inc. acquired New England Wood Pellet (NEWP) in May 2014.
Rentech Adds Funding For New Pellet Mills
Rentech, Inc. announced that GSO Capital Partners LP, the credit investment arm of Blackstone, has increased its credit facility for Rentech by up to $63 million. The majority of the proceeds are expected to fund completion of Rentech’s Canadian wood pellet projects. Rentech now estimates the cost to complete the construction of its Canadian wood pellet projects to be $125 to $130 million.
Rentech expects that the new term loan, together with its other cash resources, will be sufficient to fund its Atikokan and Wawa (Ontario) pellet projects until they have been commissioned and begin to generate positive cash flow. An uptick in estimated construction completion is due to delays in construction and higher labor costs for installation of electrical and mechanical components.
The Atikokan facility is in the commissioning phase and is producing and selling pellets to Ontario Power Generation. Rentech expects the Atikokan facility to be operating at full capacity in six to 12 months.
The Wawa facility is nearing completion of construction. Rentech expects the facility to begin startup and commissioning in the second quarter of 2015 and to operate at full capacity within one year from the start of commissioning.
Vencor Receives Order For Torrefied Pellets
Vencor International, Boulder, Colo., announced it has received a purchase order to produce 3,000 tons of bio-coal, a renewable energy product produced from timber waste using torrefaction. Vencor describes its torrefaction technology as a partial carbonization process at temperatures between 475-575°F (200-400°C) in a low oxygen environment. The physical and energetic properties of the biomass are comparable to conventional coal.
The torrefaction process has the added benefit of reducing or eliminating undesirable volatiles, such as nitrous oxides and sulfur dioxides in the bio-coal, according to the company. The key property that makes bio-coal attractive for co-firing in existing coal-fired power stations is its superior grind ability compared to untreated or fresh biomass.
Vencor is scheduled to start production on this order soon for its client, Vega Biofuels, Inc., which will ship the product to an international customer.
Vencor recently announced it had entered into an agreement to purchase the exclusive rights to torrefaction equipment manufactured by Virginia-based, Torretherm.
James Gaspard, CEO of Vencor International, Inc., states, “The order from Vega will be the first order we will manufacture using the Torrretherm torrefaction machine.
Torretherm torrefaction equipment is capable of producing five tons of torrefied pellets per hour. Gaspard comments, “We have deals that we haven’t been able to make because we didn’t have sufficient capacity. The first machine will increase our production capacity by approximately thirty thousand tons annually.”
Pellet Mills Planned For North Florida
Two ventures have announced they plan to build wood pellet mills in similar areas of north central Florida, west of Jacksonville.
PHI Group, Inc., a company focused on energy and natural resources, announced it has signed an agreement with AG Materials, LLC, an Alabama company, to jointly set up a 200,000 metric tons annual production wood pellet mill in Live Oak, Suwannee County; and Enerpellets Group, a Portugal-based producer of wood pellets, announced it will build a 250,000 tons per year pellet mill in Hamilton County.
PHI Group, which plans to exports the pellets, reports it has been able to secure approximately 400,000 metric tons of southern yellow pine feedstock per year from a nearby industrial source (possibly the newly built Klausner sawmill operation in Live Oak).
Henry Fahman, Chairman and CEO of PHI Group, comments, “We are delighted to cooperate with AG Materials to set up the new wood pellet plant in Live Oak and believe the conditions are very favorable for our joint venture, thanks to the reliable source of feedstock, logistics, and foreseeable growing market demand.”
Meanwhile Enerpellets states it is investing $60 million to build its pellet plant. “The decision was preceded by a period of analysis and evaluation of this opportunity, which was supported by the vast know-how acquired with the two plants in operation that Enerpellets Group holds in Portugal and overlooking the fast growing global pellets market,” according to an Enerpellets statement. “The investment will be carried out in Hamilton County, northern Florida, where the Group felt a huge support from the local community and from the State of Florida. This support was decisive for the economic viability of the investment.”
P&G Makes Official Albany Biomass
With a goal to one day operate all of its manufacturing facilities on renewable energy, Procter & Gamble took another large stride in that direction by announcing an agreement to develop a 50 MW biomass power plant that will help run its Bounty paper towel and Charmin toilet tissue plant in Albany, Ga.
The plant will turn scrap wood into steam and electricity, providing 100% of the steam required to operate the paper facilities. The incoming biomass will provide up to 60-70% of the site’s overall energy needs.
When it opens for commercial operation in summer 2017, the biomass plant will move P&G closer to its goal of obtaining 30% of its total energy from renewable sources by 2020 and 100% in the future. Scrap wood and forest residue will be fed into a new boiler system.
The company says it currently gets 8% of its energy from renewable sources including wind, solar, geothermal and biomass.
“As this project enables us to operate one of our largest global plants with a renewable energy source, it will reduce the environmental footprint of two leading brands, Bounty and Charmin. We see this as a win for our business, consumers, partners and the environment,” says Martin Riant, P&G Executive Sponsor of Sustainability and Group President, Global Baby and Feminine & Family Care.
The project has been in the works for nearly two years. The $200 million plant will be built, owned and operated by Constellation, a retail supplier of power, natural gas and energy products and services, and a subsidiary of the Exelon Corp.
In addition to steam for P&G, the plant will create electricity that Constellation will sell to local utility Georgia Power, who will then share it with residents across the state. Several local, state and federal officials and other companies also supported the project.
The new plant will replace an aging biomass boiler that has been providing about 30% of the total energy needed to run the Albany site for the last 34 years. “We’ve been committed to biomass for generations. This project takes us to a heightened level of commitment and benefit,” says Len Sauers, Vice President, Global Sustainability.
PFI Questions EPA Approach
Pellet Fuels Institute (PFI) issued a statement on the new Environmental Protection Agency’s (EPA) New Source Performance Standards (NSPS) Rule. The rule is intended to limit emissions from residential heating appliances and establish emissions targets for wood pellet appliances such as stoves and central heating systems.
The NSPS rule requires any new non-commercial wood burning appliances to utilize fuel that has been graded as part of a licensing agreement with an EPA-approved organization, such as the Pellet Fuels Institute. For appliances such as pellet stoves, manufacturers will be required to state such claims in the owner’s manuals.
Rather than designating one fuel standards program for the industry, the NSPS rule as written allows pellet manufacturers to choose among three programs, including the Pellet Fuels Institute Standards Program. “Of the available options, the PFI standard is the only standard that has been developed over many years here in the United States—with input from the EPA—to specifically serve North American pellet fuel manufacturers by requiring ongoing, timely testing intended to best protect consumers in the United States,” according to PFI.
In response to the rule’s release, Jennifer Hedrick, PFI’s executive director, stated “PFI has significant concerns that the current EPA language—allowing for U.S. pellet producers to choose among multiple standards programs—will cause more confusion than clarity among manufacturers, retailers and consumers as they try to grasp what the different programs and fuel standards mean.
“We are surprised that EPA did not choose the PFI Standards Program as the sole program for U.S. pellet manufacturers, despite the fact that the Pellet Fuels Institute has maintained a fuel standard for over 10 years and strengthened its testing requirements in more recent years at the specific directive of EPA.
“We are particularly disappointed and troubled that EPA has changed course and will now allow standards that do not incorporate the very components, such as routine testing, that EPA publicly stated were essential requirements of any fuel standard to be included in the NSPS rule.”
UMaine Farmington Plans Biomass Boiler
A plan to heat most of the University of Maine at Farmington buildings with a single biomass heating plant was approved by the UMaine System Board of Trustees. The $11 million proposal calls for building a 5,800 sq. ft. biomass boiler plant. The plant will consist of a 500 HP wood chip boiler, connected to an electrostatic precipitation device and a smokestack. It will pump 210° F water through a 12,000 foot loop. Connected to that loop will be heat exchangers in 24 UMF buildings, representing most of the campus.
Buildings connected to the loop would have their preexisting heating systems either replaced or modified, depending on age. Some of the newer systems would be maintained to provide some additional heating input into the system.
The $11 million project is expected to have a 10-year payback for UMF, reducing the campus’ fossil fuel consumption by 90%.
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