News | February 2017

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Torrefaction Taking Off In Oregon

Wood bioenergy development in Oregon is taking a step forward on two fronts, both concerning torrefied biomass utilization and torrefaction technology, as Portland General Electric (PGE) recently announced torrefied biomass burn testing at a coal-fired power plant, and Oregon-based HM3 Energy opened a torrefaction demo plant and licensed its technology to a Japanese utility that’s looking to build a commercial plant in the U.S.

The Boardman, Ore. coal-fired power plant operated by PGE is scheduled to shut down by 2020, but the company is studying the possibility of converting to biomass. Earlier this year Oregon’s renewable portfolio standard (RPS) was renewed and expanded to 50% by 2040, and PGE officials have said they are looking to utilize biomass and integrate intermittent renewable resources such as wind and solar.

The 600 MW Boardman plant successfully co-fired with biomass during a test in 2015, but a scheduled test burn is the largest yet, as plant officials plan to burn biomass-only for a full day. The Bonneville Environmental Foundation, Ochoco Lumber and U.S. Endowment for Forestry and Communities have established a venture, Oregon Torrefaction, to set up two pilot-sized torrefaction lines at the nearby Port of Morrow to produce the torrefied biomass for the test burn and future testing.

PGE officials say the Boardman test burn, slated for December, has been delayed into the first quarter of 2017 due to a harsh winter and high-demand operating conditions for the utility.

Meanwhile HM3 Energy had a big October, opening its torrefied briquette demo plant in Troutdale, Ore. and also announcing that Japanese power producer New Energy Development (NED) has licensed HM3’s TorrB torrefaction technology.

NED, which operates two biomass power plants in Japan and is seeking to build more, plans to build a commercial torrefaction plant in the U.S., using the TorrB torrefaction technology to help feed its Japanese operations.

According to HM3 officials, the company’s torrefied briquettes have a 30% higher energy value than raw wood pellets, making them comparable to coal and desirable for co-firing or conversions.

Drax Receives Green Light On Third Unit

European Commission has approved the conversion of a third generating unit at Drax Power Station in the UK to be fully powered by sustainable biomass from wood pellets. The third unit upgrade started in July 2015 but Drax was waiting for the total go ahead. Now half the power station will produce renewable electricity, saving 12 million tonnes of carbon each year, according to Drax.

The government has set out proposals to end coal-fired generation by 2025 as part of its plan to stimulate more clean energy generation.

Andy Koss, Drax Power CEO, comments, “Drax now leads the world in biomass technology—3 million households are powered with renewable energy generated by Drax and we’re the largest carbon saving project in Europe. We have demonstrated how to reinvent a coal-fired power station, using an existing asset, so there are no hidden costs to the Grid and it is quick to achieve.”

Two other units at the power station in North Yorkshire were upgraded in 2013 and 2014.

EIA Report Focuses On Wood Pellets

During the first half of 2016, U.S. manufacturers produced approximately 3.3 million tons of wood pellets and sold 3.1 million tons, mostly to foreign markets, according to data from EIA’s newly released Densified Biomass Fuel Report.

About 85% of raw materials for biomass pellets comes from wood waste streams such as logging residues, sawmill residues, and wood product manufacturing residue. Roundwood timber—generally logs harvested for industrial use—account for about 15% of raw materials.

EIA’s new survey collects data from manufacturers of densified biomass fuels, primarily wood pellets. The new survey began collection in January 2016 with data from 120 planned and operational densified biomass manufacturing facilities in the U.S. These facilities have the capacity to produce a total of 11.4 million tons of densified biomass annually.

Utility-grade wood pellets used by electric utilities account for more than 75% of total wood pellet production. The remainder is mostly premium-grade pellets used for heating in the residential and commercial sectors.

During the first half of 2016, about 82% of pellet sales were utility pellets in the export market, of which more than 85% were sold to the United Kingdom’s Drax power plant.

Dong's Avedore Completes Conversion

For the past 18 months, Dong Energy’s Avedøre Power Station in Avedore, Denmark has been converting its coal-fired power station unit, and now reports the entire CHP plant is able to produce electricity and heat based on wood pellets and straw rather than coal and gas.

“Following the conversion of unit 1 at Avedøre Power Station, we can produce heat for more than 215,000 Danish households in the Greater Copenhagen area without using coal or gas. The conversion is a major contribution to achieving a green district heating system in the Greater Copenhagen area as well as a green electricity system, supplementing solar and wind power,” says Thomas Dalsgaard, Executive Vice President at DONG Energy.

The conversion—part of a heat agreement between the Danish energy companies Vestegnens Kraftvarmeselskab (VEKS) and DONG Energy—aims to provide green district heating to VEKS customers in the Greater Copenhagen area. The change from coal to sustainable wood pellets also contributes significantly to the city’s climate targets. Avedøre Power Station expects to reduce its CO2 emissions by about 500,000 tonnes per year, equivalent to the annual emissions from 255,000 cars.

DONG Energy has reduced its coal consumption by 74% since 2006 by using more wind and biomass, and the trend is continuing.

Avedøre Power Station has two units. Unit 1 now uses wood pellets as fuel, but is still able to use coal. The unit’s capacity using biomass is 254 MW electricity and 359 MWth heat. Unit 2 is a multi-fuel plant consisting of a main boiler, which primarily uses wood pellets as fuel, a straw-fired boiler and two gas turbines.

Avedøre Power Station unit 1 was built in 1990 and used coal as fuel until recently. Avedøre Power Station unit 2 was built in 2002 and was able to use biomass from the outset. The quantity of biomass has gradually been increased over the years. Today, the unit is able to produce electricity and heat exclusively using wood pellets in the main boiler and straw in the bio boiler. The unit’s capacity using biomass is 394 MW electricity and 497 MWth heat.

DONG Energy states it only does business with suppliers who comply with the criteria set out in the Danish industry agreement on sustainable wood biomass. This means that there is continuous reforestation, and that the biodiversity is protected.

Norden Will Transport Pinnacle Production

NORDEN A/S has entered into a nine-year contract for the transportation of wood pellets for Canada’s Pinnacle Renewable Energy Inc. NORDEN will transport 3.5 million tons of wood pellets in 2018 from Vancouver and Prince Rupert in Western Canada to Europe.

The transports will be carried out on Supramax vessels, of which NORDEN is one of the world’s largest operators. There will be eight trips a year, and each trip is expected to take 65 days.

The wood pellet contract with Pinnacle follows a number of other contracts for the transportation of wood pellets which NORDEN has made. In the past six years, NORDEN has entered into contracts with volumes amounting to 30 million tons.

Head of the Norden Industrial Bulk in Dry Cargo, Vice President Michael Boetius, comments, “The contract with Pinnacle provides us with an opportunity to achieve two things: First, the contract ensures that our vessels return with cargo from the Pacific to the Atlantic Ocean—a route where traditionally there is less cargo to transport. Secondly, the contract cements our already strong position in the biomass market, in which we have built up considerable experience and expertise.”

Vaughan Bassett, Senior Vice President of Pinnacle Renewable Energy Inc., adds, “We needed a partner with their own fleet to ensure they could ride out whatever cycles we will meet in the almost 10-year the contract covers. That partner also needed to have a very good reputation in the shipping industry and to be flexible and customer focused enough to satisfy both ourselves and the receiver consistently over the long term.”

The Supramax vessel is nearly 200 m in length, 32 m wide, and has a cargo capacity of 50,000-62,000 tons. Norden operates 71 Supramax vessels.

Rentech Continues Work On Pellet Mills

Rentech, Inc. President Keith Forman reports the company has completed planned replacements of “problematic conveyors” and other maintenance and repairs at the Atikokan and Waxwa (Ontario) pellets plants. Atikokan is consistently operating at 90% of capacity and Rentech expects the plant to operate at an annualized rate of production of 100,000 metric tons until Rentech has economic justification to replace the last remaining bottleneck conveyors.

The new conveyors at Wawa are functioning as expected, with the plant producing at an annual 150,000 metric tons. “We are working to resolve some equipment and operating issues as we execute on our plan to ramp production at Wawa until we reach full capacity (400,000 to 450,000 metric tons annually), which is expected in late 2017,” Forman says. At an annual production capacity of 400,000 metric tons, Rentch would be able to fulfill its yearly obligations under the Drax contract and generate positive cash flow at Wawa based on today’s economic variables, he says.

“However, we are currently evaluating our stabilized EBITDA forecast as Wawa continues ramping up production given that operating costs at Wawa have been higher than expected, and may continue to be so going forward, which negatively impacts profitability under the contract with Drax,” Forman adds. “In addition, oil prices, which drive indexation of prices in our Drax contract, have declined more than Canadian diesel prices, a material component of our fiber supply costs, which is negatively impacting margins on deliveries to Drax.”

Convergen Purchases LWEC Power Plant

Wisconsin-based Convergen Energy has purchased the L’Anse Warden Electric Company (LWEC) power plant from Traxys Power Group. LWEC is a combined heat and power (CHP) 20 MW plant located on the shore of Lake Superior in the Upper Peninsula of Michigan. LWEC supplies electric power to the grid for the Upper Peninsula under a power purchase agreement for renewable energy. The plant also supplies steam and electricity to the CertainTeed Plant that is adjacent LWEC in L’Anse. The LWEC Plant generates both steam and electricity for sale.

The acquisition is part of Convergen Energy’s growth plan to enter the renewable power market. “Convergen is pleased to have completed this purchase,” says Ted Hansen, CEO of Convergen Energy. “LWEC has a proven history of producing renewable power and provides a valuable source of power generation in the U.P. We look forward to being a part of the community and providing reliable power generation in the U.P. for years to come.”

The 18 Union members who operate the plant will continue in their current positions. The LWEC power plant has been a major employer in the L’Anse community since 1959.

Convergen, with company headquarters in Green Bay, Wis., is part of the Libra Group, an international business group.

Butiá Wood Pellets Plans New Mill

Butiá Indústria e Comércio de Pellets Ltda. plans to build a 36,000 tons/year wood pellet plant in Corede Centro-Sul, Brazil for export and domestic markets. Raw material will come from eucalyptus from forests grown in the Center-South Region of the state.

The company, operating as Butiá Wood Pellets, will also absorb wood residues from the state of Rio Grande do Sul.

The company reports it already has the environmental licensing provided by the city and received detailed information about the program DesarolveRS, regarding tax treatment in the acquisition of equipment imported or manufactured in Rio Grande do Sul.

Finland Future Banks On Forest Byproducts

The Finland government approved a national energy and climate strategy to 2030, which plans for the share of renewable energy of final energy consumption to rise more than 50% in the 2020s. The long-term goal is for the energy system to become carbon neutral and to be strongly based on renewable energy sources.

Investment subsidies for renewable energy are mainly targeted toward commercializing new technology and the effort sharing sector, especially toward institutions producing advanced transport biofuels. In addition, the use of agricultural, societal and industrial waste and side streams in the production of heat and electricity and as transport fuel is promoted.

The current feed-in tariff system of wind power will be discontinued. The goal is for projects to be implemented on market terms in the future.

The domestic use of imported oil, i.e. petrol, diesel, fuel oil as well as jet fuel and kerosene, will be halved during the 2020s compared to the total amount of energy in 2005. Also, measures proposed for the individual heating of buildings and for machinery are targeted to reducing the usage of oil. The share of biofuel energy content of all fuels sold to road transport will be increased to 30% by 2030.

Using coal for energy production will be discontinued during the 2020s. Energy taxation will be used to encourage primarily using forest chips and forest industry byproducts for combined heat and power production (CHP) and the separate production of heat. The operating subsidy scheme for electricity produced from wood chips is a cost-effective way of promoting the use of forest chips, according to the government.

The increased domestic production of advanced transport biofuels will also increase the use of forestindustry byproducts and forest chips. Taxation will be used to further ensure that peat will not be more competitive than forest chips or forest industry byproducts but that it will be more competitive than coal and other imported fossil fuels.

When developing policies, the availability of forest biomass and the value added in different applications will be taken into account. The new investments of forest industry will significantly increase the use of wood in Finland in the near future. Raw material suitable for the wood processing industry must not be directed to energy production through the subsidy scheme.

The production and use of biogas will increase, and growing Finnish business will develop around it. The prevalence of gas-powered vehicles and machines will be promoted, and supporting biogas plants will continue at least at the current level. National provisions and permit procedures will be clarified to promote the production and use of biogas.

The decline of carbon sinks in Finnish forests will be prevented by fortifying the growth and carbon binding capacity of forests in the long run, by mapping out the afforestation of treeless areas and reducing the clear-cutting of forests in connection with infrastructure and transport construction.

In addition, the possibility to move into an economy completely based on renewably energy in 2050 has been assessed. The goal has been to identify the possibilities and challenges of using 100% renewable energy sources in different sectors and on a system level.

The state aid required by the strategy would increase central government expenditure by EUR 160–240 million in 2018–2020 and by about EUR 900–930 million in 2021–2030.

Consultant Has Plan For Trump

FutureMetrics LLC President William Strauss has just the answer for President Trump’s stated desire to save the coal industry.

“We offer a plan that can help,” says Strauss, a well known consultant in the industrial and heating wood pellet fields.

Actually Strauss for some time has promoted the use of U.S. produced wood pellet fuel blended with coal in large utility power stations. “This well-proven strategy, already in place in many other countries, can provide certainty for the need for U.S. produced coal for decades and certainty for U.S. coal mining jobs,” Strauss states in a recent paper.

Strauss proposes low cost modifications of coal fired power stations to allow them to blend industrial wood pellets. The strategy has many advantages, he says, including the use of existing power stations, flexible baseload or on-demand generation, lower carbon emissions, much lower capital costs than new natural gas plants, already been demonstrated at scale in many locations, sustains and creates jobs.

Strauss pinpoints the locations and type of coal used at the 435 coal fueled plants still in operation larger than 250 MW. Most of the larger ones use pulverized coal technology, and are easily modified to use a coal-pellet blend. “The modified plants are just as reliable and output the same amount of power as they did when running on 100% coal,” Stauss says.

He notes that coal fueled power plants still provide more than 50% of the available large scale utility electricity generation in the U.S., but the situation is changing rapidly, not because of environmental rules but because of low cost natural gas. Hydraulic fracturing (fracking) in shale formations has opened up massive reserves and a flood of natural gas resulting in very low prices. Shale gas production has increased more than eight fold in the past eight years.

As a result, the power sector has been shifting from coal to natural gas by building new natural gas fueled power plants and retiring older coal fueled power plants, Strauss states, adding that the U.S. coal fired power plant fleet is also aging, with 90% of larger pulverized coal plants at 27 years and older.

Strauss acknowledges that the Trump policy could simply focus on a plan for keeping coal power plants running on 100% coal, but cites two reasons why the Trump administration should consider co-firing: more jobs and significant manufacturing investment, especially in areas where pulp and paper mills have closed; and lower carbon emissions, which while perhaps not a main focus of the new administration would complement the actual policy objective.


Enviva Has More Plants Scoped Out

Worldwide industrial wood pellet demand could top supply by 6.7 million metric tons annually come 2020, according to a report by Enviva Chairman and CEO John Keppler for the Drexel Hamilton’s Emerging Growth Investor Conference in early December.

Identified supply could be 20.5 million metric tons compared to 27.2 MTPY of demand.

Meanwhile according to the report, the top industrial wood pellet producer companies annually worldwide are Enviva, Grannul Invest, Pinnacle Pellet, German Pellets, Drax Biomass, Georgia Biomass and Fram Renewable Fuels.

Enviva lists seven plants in operation: Cottondale, Fla. (700 MTPY), Southampton, Va. (510 MTPY), Northampton, NC (510 MTPY), Ahoskie, NC (370 MTPY), Amory, Miss. (110 MTPY), Wiggins, Miss. (110 MTPY), and its most recent at Sampson, NC which is expected to produce 500,000 MTPY in 2017 and reach 600,000 MTPY in 2019.

Meanwhile Enviva is moving ahead on construction of a plant in Hamlet, NC (500 MTPY), and is assessing possible projects—all 500 MPTY—at Laurens, SC; Childersburg, Ala.; Abbeville, Ala.; and Lucedale, Miss.

While Enviva primarily serves the industrial market, it’s increasingly shipping to the heating pellet market, whose demand could be 17 MTPY come 2020 and which currently is nearly as much as industrial wood pellet demand in Europe.

Enviva Begins Exports At Port Of Wilmington

 The Enviva wood pellet domes at the Port of Wilmington (NC) are operational and loaded the first export shipment to Europe late last year, according to the North Carolina Ports web site. The Enviva terminal, which includes two storage domes that can hold up to 45,000 metric tons of wood pellets each, is estimated to have a total impact on the local economy of more than $16 million per year and ship more than 1 million tons of pellets annually.

Wood pellets can be delivered to the Port of Wilmington by truck and rail.

“The Enviva domes are an important part of our ports modernization plan,” says North Carolina Ports Executive Director, Paul Cozza. “This project will increase bulk exports, thus expanding the business of our general terminals which is a vital portion of our strategic plan.”

Enviva has signed a 21-year lease with two five-year renewal options with North Carolina Ports.

Lynemouth Power Signs Haul Contract

GB Railfreight (GBRf), one of the largest rail freight operators in the UK, has signed a rail haulage contract with Lynemouth Power Limited.

The new service is expected to commence in the second half of 2017. GBRf plans to run up to 27 trains per week, delivering more than 37k tonnes of biomass per week. The trains will run between Port of Tyne and Lynemouth Power Station.

Lynemouth Power is converting its 420 MW power station (three 140 MW boilers) from coal burn generation to biomass.

U.S. DOE Awards Project Funding

The U.S. Dept. Of Energy has selected six projects for up to $12.9 million in federal funding for the development of plans to manufacture advanced or cellulosic biofuels, bioproducts, refinery-compatible intermediates, and/or biopower in a domestic pilot- or demonstration-scale integrated biorefinery. 

Among the projects, AVAPCO, LLC, Atlanta, Ga., will develop a demonstration-scale integrated biorefinery that combines AVAPCO’s biomass-to-ethanol process with project partner Byogy’s alcohol-to-jet process to create an integrated process that produces jet fuel from woody biomass. In addition to the jet fuel primary product, the demonstration facility will also produce cellulosic renewable diesel.

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