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Bankrupt German Pellets Plants Remain In Operation in U.S.
Production continues at two Southern U.S. pellet plants in Woodville, Tex., and Urania, La., that were formerly owned by German Pellets GmbH of Wismar, Germany, with both currently in bankruptcy as the plants’ largest creditors seek buyers or new investors.
German Pellets, formerly a major producer of industrial pellets in Europe and parent company of Texas Pellets and Louisiana Pellets, filed for bankruptcy in February 2016 after the company was unable to meet debt obligations.
Louisiana Pellets filed for bankruptcy a week after the parent company, unable to make a $4.2 million payment. Texas Pellets filed for bankruptcy in May 2016, citing creditors’ claims and liens. The Texas plant had started up in 2013; the company built an accompanying pellet shipping facility in Port Arthur, Tex., and the mill was running well at its 500,000 metric ton annual capacity until the bankruptcy. The Louisiana plant, meanwhile, also a 500,000 metric tons facility, is currently running despite suffering from construction and startup problems in mid 2015 that slowed its production ramp up.
Officials with investment firm Invesco, Ltd., which is the largest debt holder for the Louisiana plant ($89 million) and Texas facility ($39 million), did not respond to an e-mail about current ownership structure, operations or any future plans for the facilities.
Sources say the Louisiana plant is paying up front for its raw material purchases, and the Texas plant remains an active member of the Texas Forestry Assn. News reports note both facilities are relatively new plants in good locations, and investment analysts with Invesco and the private equity industry have cited future projected pellet demand.
German Pellets was once a major conglomerate operating 15 production facilities (10 in Germany, three in Austria and two in the U.S.) with annual capacity of 2.5 million metric tons of pellets, plus pellet distribution and marketing companies and horse bedding and briquette operations. Following its bankruptcy filing, German Pellets sold its Wismar, Germany pellet plant to private equity fund MEP, and its Ettenheim and Herbrechtingen plants in south Germany to pulp producer JRS. The company’s Torgau, Germany plant was sold to PLE Pellet Lohnfertigung, and a power plant in Belgium was sold to Estonian pellet producer Graanul Invest.
Morbark Appoints David Herr As CEO
Morbark, a leading manufacturer of equipment used in forestry, recycling, tree care, landscaping, sawmill and biomass markets, named David Herr as Chief Executive Officer. In addition to being an active member of the current Morbark Board, he brings extensive knowledge from experience with both products and services companies. He replaces Dan Ruskin, who resigned due to health issues.
“The Board is thankful for Dan’s leadership over the past six months as the company has transitioned to the next phase in its development,” says Ray Whiteman, Chairman of the Board. “Our thoughts are with Dan and his family, and we wish him a speedy recovery.”
“Morbark is fortunate to have a strong and deep leadership team and Board, and we are pleased that David Herr has agreed to step into the CEO role,” Whiteman adds. “We have known Dave for many years and have been impressed by his track record of building high-performing leadership teams that drive growth while respecting core values.”
Herr is an accomplished industry executive with more than 30 years of experience in operations, supply chain management and executive management with major companies, including Navistar, GE Aircraft Engines and BAE Systems. He has diverse experience in the areas of heavy-duty truck manufacturing, commercial avionics, commercial ship repair, munitions production, and information and intelligence analysis.
He earned a Bachelor of Arts degree in Business Administration from St. Francis College, in Fort Wayne, Ind., and Master of Business Administration degree from Northern Kentucky University. He will be relocating from Ft. Wayne to Morbark headquarters in Winn, Mich. in the near future.
“Morbark has built a great reputation with its customers and partners. I look forward to moving from a Board position to leverage my operational experience to further grow the Morbark franchise,” Herr says.
Finnerva Providing Financing For Teesside
Finnish state-owned financing company Finnvera is contributing EUR 120 million to the construction of the world’s largest power plant fueled solely by biomass being built near the town of Middlesborough, England. The construction of the power plant is estimated to cost EUR 780 million.
Preliminary construction work for the MGT Teesside plant is beginning soon. Commercial operations are due to start during the first quarter of 2020. The 299 MW plant will be fueled solely by clean wood pellets and chips.
The circulating fluidized bed boiler and the flue gas cleaning system are delivered by Amec Foster Wheeler Energia Oy.
Dong Starts Up Biomass Boiler
Denmark-headquartered Dong Energy has converted one unit of its Studstrup power plant in Aarhus to run on wood pellets instead of coal, while the second unit will be mothballed, helping to reduce carbon emissions.
The 360 MW capacity unit will be able to supply heating to more than 100,000 Danish homes and electricity to about 230,000 homes using biomass.
The second unit of a similar size, which has been running on coal, will be put on reserve.
A huge storage silo, which can contain 65,000 tonnes of wood pellets, was installed along with more than 800 meters of closed conveyor belts to transport the pellets from the harbor to the silo and into the boiler. Underground corridors have been constructed to ensure transport of the wood pellets from the silo and into the boiler via conveyor belts.
“I’m delighted that we can now open the new, green Studstrup Power Station, which will be able to supply green district heating to Aarhus and green electricity to the Danish grid. That means a significant contribution to the green revolution, and we’re well on the way to establishing an energy system that is green, independent and economically sustainable,” says Thomas Dalsgaard, Executive Vice President, DONG Energy.
Biomass Groups Seek Wood Chip Standard
Several natural resource and biomass organizations report they have secured a grant from the U.S. Dept. of Agriculture Forest Service to assist in the development of a national wood chip heating fuel technical quality standard. Spokespersons say a standard would improve the performance, efficiency and reliability of wood chip heating systems and enhance technical credibility and market confidence, which would help to expand the wood chip heating market.
Representatives from the Biomass Energy Resource Center, Biomass Thermal Energy Center, Innovative Natural Resource Solutions, and American Society of Agricultural and Biological Engineers state in a multi-authored letter that all heating fuels used in the U.S.—except wood chips—are governed by quality standards that ensure these fuels meet clearly defined parameters. This includes heating oil, propane, natural gas, coal, wood pellets, etc. Heating appliances (boilers, furnaces, stoves) are then engineered around a known standard fuel to ensure efficient, clean and safe performance.
“Without a standard, no manufacturer of wood chip combustion systems can guarantee consistent, high performance,” they state. “With the Forest Service’s support, we expect to complete the development and promotion of the standard within the next two years.”
A 15-member advisory committee is involved in the effort.
“Our team believes the development and wide adoption of a chip fuel standard is essential to broader consumer and market acceptance, and growth in wood chip heating. We want to see this happen.”
Visit the project website—www.woodchipstandard.org—for updates and invitations to comment on draft standard language.
PF Institute Adjusts To Private Labeling
Pellet Fuels Institute announced a change in the labeling system for its PFI Standards Program to accommodate the common practice of private labeling. The PFI Standards Program is a third-party accreditation program providing specifications for residential and commercial-grade pellet fuel, now representing 15 pellet manufacturing companies, among them 27 facilities.
Under the new system, if a qualified pellet fuel manufacturer is working with a retailer or distributer that wishes to use a privately labeled bag that does not credit the wood pellet manufacturer, then the wood pellet producer is able to contact their inspection agency to request an additional registration number to be used specifically for private labeling purposes. The inspection agency will review the request to assure that the additional registration number is used only for the designated production facility and that the pellet fuel manufacturer will maintain control of all bag printing. Once approved, the inspection agency will issue a new quality mark with the additional registration number to be used only on privately labeled bags.
New Biomass Energy Buys Out Solvay
New Biomass Energy has acquired Solvay’s interest in the Mississippi torrefaction plant and plans to continue the production of torrefied biomass. Initial production at the Quitman plant will supply 2,000 to 3,000 tons of torrefied wood for a test burn at Portland General Electric’s plant in Boardman, Ore. later this fall.
New Biomass Energy is looking for opportunities to expand the business with a current focus on development in the United States. The company is also exploring additional uses for the torrefied material in alternative markets such as composite materials and agriculture.
“Torrefied pellets offer an extremely compelling renewable energy solution for existing coal-fired facilities looking to reduce their CO2 emissions,” says Neal Smaler, President of New Biomass Energy. “We also look forward to working with interested partners on the alternative uses of the material, which offer substantial potential for growth.”
Graham Celebrates Safety Milestone
Graham Construction reports it has recorded 1 million man hours free of any RIDDOR notifiable incidents while building the biomass terminal at the Port of Liverpool for its client Peel Ports. RIDDOR (Reporting of Injuries, Diseases and Dangerous Occurrences Regulations) requires employers to report to the relevant authority any work related accidents and incidents of a certain nature.
The first phase of the £100m facility opened in 2015 with further phases due to come on stream in the coming months. The terminal handles up to 3 million tonnes of wood pellets a year to supply Drax power station in Yorkshire, with the material shipped directly from the Port of Liverpool by train.
Paul Scott, contracts director at Graham Construction, comments, “Safety is one of our core values with the aim of ensuring all staff on our projects remain free from harm or ill health as a result of their work. We firmly believe that good safety statistics are as a result of diligent planning, effective supervision and management, trusted supply chain partners and a trained and competent workforce.”
Group Emphasizes Safe Trucking
TEAM Safe Trucking (TST), a broad-based, non-profit volunteer group seeking to elevate the standard and performance of the American forest industry’s transportation sector, is moving ahead with its ambitious agenda, according to organizers, who met in early fall to review the progress of TST and to tweak its priorities.
The group launched a web site (teamsafetruck ing.com) in October. The web site is being populated with information and tools designed to help TST reach its objective. Its emerging safety-focused program will embrace awareness and education; driver training, skillset improvement, motivation and recruitment; fleet best management practices; and public image enhancement.
The organization expects to expand its program nationwide as it secures additional funding through donations from stakeholders and through grants. At least 10 companies and associations have contributed funds to TST. As well, Virginia Tech University has committed funds and a graduate student to conduct log/chip truck accident research, which is just beginning. The study will help guide TST’s work going forward.
Organizers consist of logging companies, log trucking entities, wood fiber suppliers, paper/ wood products manufacturers, insurance companies, and logging and forestry association representatives.
According to TST president Rick Quagliaroli, “Our objective is to help make the forest industry’s trucking segment safer, more accountable, more efficient, and more acceptable to the public. This will take some time. For the good of the industry as a whole, we’re asking for all connected parties to ‘buy in’ with their ideas, enthusiasm, and support.”
To learn more, visit teamsafetrucking.com, e-mail Quaqliaroli at rick@swampfoxagency.com or e-mail Jimmie Locklear at jimmielocklear@forestrymutual (phone 910-733-3300).
Norbord Takes Aim At Biomass Subsidies
Norbord UK is calling on the government to amend biomass subsidies. According to Norbord, earlier this year a major energy supplier lobbied the government to make biomass power stations eligible for future subsidies. The company wants to be allowed to bid for “green” subsidies that the government is planning to auction off.
Biomass power plants already receive government support, but the industry wants more, Norbord claims. However, Norbord says the type of technology used to convert coal-fired power stations to biomass is not currently eligible to bid for the new subsidies.
There are several reasons why this technology should not receive subsidies but the most basic is that wood is, fundamentally, very different from other renewable energy sources such as wind and solar power, according to Norbord. Nobody has to buy their wind or sunshine and there is no market for these energy sources.
Wood markets, however, are well-established. It is a raw material for numerous industries and is traded internationally. “Subsidies fundamentally distort the market for timber and applying the same incentives to wood as to wind or solar power generation is nonsensical,” Norbord states.
Norbord, a leading producer of oriented strandboard, is one of many manufacturers for whom wood is the principal raw material and depends upon the ability to buy materials competitively in a free and open market. As a manufacturer, Norbord burns process residues to generate 75% of its heat energy from on-site biomass plants for which it receives payment under the government’s Renewable Heat Incentive.
However, this payment does not even get close to offsetting the impact of wood price increases resulting from subsidies paid to biomass power stations, Norbord claims.
“The government needs to amend the existing subsidy process to remove this unfair incentive and must not cave in to biomass energy companies who want even more public money to subsidize their businesses,” Norbord states.
N.H. Study Cites Wood Bio Impact
New Hampshire Wood Energy Council, a not-for-profit public education and outreach organization, has released a report stating that wood chips and pellets used for heating account for a $36 million per year positive impact in that state.
The report documents the economic and environmental benefits of heating community, commercial and institutional buildings with bioenery. NHWEC analyzed the use of wood fuels in calendar year 2015 in hospitals, schools, municipal buildings and private businesses across the state. In the last 10 years, more than 120 new installations have been made, nearly always replacing imported heating oil.
The study documented wood fuel use in the buildings studied at 7,500 tons of pellets and 94,000 tons of wood chips during 2015.
Meanwhile New Hampshire state officials celebrated National Bioenergy Day by holding an open house to recognize the completion of a new wood biomass boiler that will heat a major state building in Concord.
The New Hampshire Dept. of Environmental Services (NHDES) and the Dept. of Health and Human Services (DHHS) facility will be heated this winter with sustainably sourced local wood biomass chips instead of natural gas.
Site Provides Wood Bioenergy Database
U.S. Endowment for Forestry and Communities has launched a wood bioenergy facility database and mapping tool (www.wood2energy.org).
With separate, clickable layers and data by facility type, size, operational status, and additional detailed information for each data point, users have the ability to plot and contextualize data from the macro-level down to the site-level.
The Endowment engaged Ecostrat Inc. to develop and manage data delivery using GIS mapping technology to render the very large, complex dataset in a simple, user-friendly way.
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