WOOD PELLET NEWSLETTER
Gerald W brown * 7202 County Road U * Danbury, WI 54830 Phone 715-866-8535
Gerald Brown is solely responsible for the content in this newsletter
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• DESPITE EARLY CHALLENGES, WOOD-BASED BIOFUELS POISED FOR GROWTH IN 2011
• PAPER MAKER TURNS WASTE WOOD TO BIOFUEL, JOBS
• FIRM OFFERS WOOD PELLET SUPPLY DEAL
• WOOD PELLET BOILER PLAN MOVES AHEAD
• WOOD PELLETS AND CREOSOTE BUILDUP
• PSNH SEEKS LEVEL OF FIRE DAMAGE AT WOOD CHIP PLANT
• CURING MAINE'S ADDICTION TO HEATING OIL
• AS OIL PRICES RISE, CONSUMERS SEEK ALTERNATIVES
• VIRIDIS ENERGY INC. ENTERS LETTER OF INTENT TO ACQUIRE CONFLUENCE ENERGY COLORADO-BASED PREMIUM PELLET MANUFACTURER
• SILVER BAY RESIDENTS TO VOTE ON BIO-MASS PROJECT
• CREATING JOBS AND CLEAN ENERGY IN ATIKOKAN
• REPORT: NORTH AMERICAN WOOD PELLET EXPORTS DOUBLE
• BIOMASS PROJECT OF THE YEAR –
• SAVING MAINE FROM HEATING OIL DEPENDENCY
• ASHLAND HOSPITAL IS FAR AHEAD OF BIOMASS CURVE
• EPA CALLS ON THREE OKLAHOMA POWER PLANTS TO SWITCH TO NATURAL GAS
• EXELON CEO: LEGISLATION NOT NEEDED TO TRANSITION POWER GENERATION TO CLEANER ENERGY
• GLOBAL CLEAN ENERGY UP 30% IN 2010 FROM 2009: BLOOMBERG REPORT
• NORTH AMERICAN PELLET EXPORTS REACH 1.6 MILLION TONS
• GLOBAL TRADE OF WOOD CHIPS WAS UP IN 2010 AFTER SHARP DECLINE IN 2009
• UNC CHANGES WOOD PELLET PROVIDER FOR MARCH TESTING
• HEATING OIL USE FALLS AS PRICES, IRRITATION RISE
• Wood Pellet Exports from the US and Canada to Europe Reached 1.6 Million Tons in 2010, a Doubling of Shipments in Just Two Years
• BRITAIN'S BIGGEST POWER STATION GOES BIOMASS
• CANADIAN ENERGY COMPANY IN NEGOTIATIONS WITH KREMMLING PELLET PLANT
• WORLD'S BIGGEST BIOMASS PLANT PLAN APPROVED
• REPORT: NEGLECTED ENERGY SOURCES VITAL FOR DEVELOPING NATIONS
• WORLD'S LARGEST WOOD PELLET PLANT TO OPEN IN GEORGIA
• FINANCING CAN EASE THE INSTALLATION COST, WHICH CAN BE FURTHER OFFSET BY VASTLY REDUCED HEATING BILLS.
• RHI MEANS BIOMASS HEATING SYSTEMS ALMOST FREE FOR BUSINESSES, FARMERS AND PUBLIC SECTOR
• WORLD’S LARGEST PELLET PLANT EXPORTS FIRST SHIPMENT
• ARK ALLOY COOKING UP A NEW LOCAL BUSINESS
• PROPOSED ORDINANCE WOULD LIMIT USE OF WOOD FURNACES
• WOOD PELLET PLANT IN TRIAL RUNS IN WARE COUNTY
• LOGISTICS SUPPORT VITAL FOR US WOOD PELLETS EXPORTS TO EUROPE
DESPITE EARLY CHALLENGES, WOOD-BASED BIOFUELS POISED FOR GROWTH IN 2011
From the February 2011 Forest2Fuel newsletter.
When Range Fuels shuttered its Soperton, Ga. plant in January, industry reactions ranged from I told you so to wood-based cellulosic ethanol is dead. As Dan Chapman of the Atlanta Constitution Journal wrote: criticsranging from budget hawks to renewable energy experts to dispirited localssay that the shutdown is a case of good money thrown at unproven science and lofty promises (read Dans article here).
Range Fuels management assured public and private investorspublic sources of funding totaled $162 million ($76 from DOE, $80 from USDA and $6 from the state of Ga.) and private sources totaled $158 millionthat the plant would be producing 20 million gallons of cellulosic ethanol by now. Instead, the plant produced methanol. (See Robert Rapiers R-Squared Energy Blog for an interesting perspective.)
Some reports suggest Range may have produced the 100,000 gallons of ethanol right before closing. This report is unconfirmed, but if it is true, the company met the target that the DOE set for it under the 2011 renewable fuel standard (RFS). The fate of the plant hangs on the companys ability to find additional sources of funding from the private sector. According to Chapman, the Department of Energy (DOE) recently wrote, The final stepcatalytic conversion of the gasifier products to ethanolcould not be successfully demonstrated with the time and funding available in this project. The DOE suspended payments to the company in January.
Where does this leave cellulosic ethanol project developers in 2011? Will cellulosic ethanol ever meet original targets for the RFS? Will the government, stung by Ranges failure and high national debt figures, focus its attention elsewhere? Two factors will be instrumental in answering these questions.
The first of these factors is oil prices. Even before the unseating of Hosni Mubarak in Egypt, experts were predicting higher oil prices. Forest2Markets Economic Outlook, a monthly publication that provides a 24-month forecast for major economic indicators, predicts that oil prices will remain near or above the $100/barrel level for the next two years (see chart). Others have predicted even higher prices.
The last time oil prices stayed above $90/barrel was from November 2007-September 2008 (hitting a peak above $133/barrel in June and July 2008). During this period, we also saw a spike in public interest in cellulosic ethanol. (Range Fuels was one of the beneficiaries of the spike in oil prices, as it was in the process of raising private capital during this period.) Once oil prices returned to more normal levels, however, interest waned. Because the current period of high prices will likely be extended as a result of unrest in the Middle East, the lower currency exchange rates for the U.S. dollar and other inflationary pressures, the funding environment for cellulosic ethanol projects will likely improve in 2011 and 2012.
(In other financing news, Jim Lane, in his recent article for Biofuels Digest, writes that the USDA has recently revised the requirements of its loan guarantee program for biofuels to include bond market financing.)
The second factor that will influence progress toward commercial scale cellulosic ethanol produced from wood and wood waste is the governments ability and willingness to fund and expand current loan guarantee programs.
The USDA may have signaled its intention to support cellulosic ethanol with the January announcement of three new loan guarantees totaling $405 million. All of the projects are cellulosic ethanol projects located in the South. Two will use wood as part or all of their feedstock:
$250 million went to Coskata to build a plant in Greene County, AL. The plant, when operational, will produce 55 million gallons of ethanol from woody biomass annually. The company currently has a facility in Penn. that has demonstrated commercial viability and produces 100 gallons of ethanol from every ton of feedstock.
$75 million went to INEOS New Planet Energy for a plant to be built in Vero Beach, Fla. The plant, when operational, will produce 8 million gallons of cellulosic ethanol and 6 MW of electricity from a variety of waste streams, including wood.
In addition to these grants, the USDA is likely to award another $300 million in guarantees for additional biofuels projects in 2011. (BlueFire Renewables, another southern cellulosic ethanol facility that will use wood as part of its feedstock, is high on the list of possible recipients.)
Beyond that, however, the future of government support for cellulosic ethanol is unclear. Because the continuing resolution that has been keeping the government running since December is scheduled to expire March 1, Congress has begun discussing budget proposals. Expect political maneuvering to take center stage.
Many Republicans who were elected in November fall into the deficit hawk category. They will be eager to fulfill their campaign promises to do away with individual member appropriations a.k.a., earmarks or pork during budget discussions. To many of these members, renewable energy projects fall into the pork category, not the investment in the future category.
While it is certainly true that the U.S. must make extraordinary efforts to reduce the country's debt, we will be unlikely to grow our GDP in the future (and reduce the size of its debt as a percentage of GDP) without making significant and focused investments in new technologies and ideas, and then producing these new products at home. President Obamas State of the Union address focused specifically on this issue, and a fact sheet available at the White House website summarizes the Presidents commitment to support clean energy technology. This commitment includes an expansion of clean energy research programs and an 85 percent increase in renewable energy investment, all of which would be paid for by ending $4 billion in taxpayer subsidies for fossil fuels. This last proposal is meeting with stiff opposition from Congressional Republicans.
PAPER MAKER TURNS WASTE WOOD TO BIOFUEL, JOBS
By: Tony Dobrowolski -- The Berkshire Eagle
Photo By: Ben Garver
Crane & Co. is planning to employ a rarely used, clean-energy technology to reduce the paper maker's energy costs and possibly bring 100 new jobs to the region.
The technology, known as Rapid Thermal Processing, or RTP, converts local waste or scrap wood into a clean-burning, nearly carbon-neutral biofuel, which would replace fuel oil in burners and generators. The biofuel -- called pyrolysis oil -- can also be used as a replacement for electricity and natural gas. The conversion occurs when the waste wood is vaporized at high heat in the absence of oxygen.
Stephen A. Sears, a partner in Berkshire Renewable Power, which will help Crane develop the project, said the RTP could generate enough electricity "to basically take Crane off the grid."
"We can save millions of gallons of fuel oil with this process, and keep our prices relatively stable," said Crane's Chairman and CEO Charles Kittredge on Thursday at a news conference that was held to introduce the project. "It's a significant piece of our costs going forward that we hope to stabilize."
ReEnergy Holdings LLC, a renewable energy company that focuses on the generation of electric and thermal energy from waste fuels, plans to invest $80 million toward the construction of a facility at Crane's Ashuelot Park that will allow the country's sole producer of U.S. currency paper to utilize the technology at its many mill sites. Crane will own and operate the facility once it has been built. Ashuelot Park, a 100-acre parcel, straddles the Dalton-Pittsfield town line.
"The plan is to have this done by the end of 2013 if everything stays on schedule," Sears said.
Between 25 and 30 new jobs would be created for employees of the new facility, Sears said. The other jobs that are expected to be created would be for people to harvest the wood.
RTP is produced by Envergent Technologies LLC of Illinois, a joint venture between the Fortune 100 technology and manufacturing company Honeywell and Ensyn Corp., a Canadian firm.
Crane is expected to use only half of the biofuel that the RTP plant generates. It would sell the rest.
"We believe that approximately 50 percent of the output of the plant would be available locally," Sears said. "We'd like to get some local customers. It's not ready for homes. But it's ready for industrial use."
RTP is currently used in seven commercial biomass processing plants in the United States and Canada, and ReEnergy Holding operates plants in New Hampshire and Connecticut.
But Sears said he believes Crane's application is unique.
"This particular application of this fuel as we're doing here, I believe, is the first demonstration of this kind of fuel in the United States," he said. "There are applications being looked at in Southeast Asia, Italy and Canada."
Larry Richardson, the CEO of ReEnergy Holdings, said RTP is a "proven technology" that has been used for 15 years.
"The technique to create the oil started in the late 70s, I believe," Sears said. "But when the oil market stabilized in the 1980s there wasn't much need for the process."
Until recently, Sears said RTP was used to create liquid smoke that was used to give certain foods a smoky flavor.
"As soon as oil hit high prices, they became interested in putting this back into the energy markets," Sears said. "This is a step along the way."
FIRM OFFERS WOOD PELLET SUPPLY DEAL
As heating oil prices rise, a Bethel-based company that sells wood-pellet boilers is guaranteeing pellet delivery for the next three years at a price equivalent to $1.99 a gallon for heating oil.
One catch: Customers must buy the company's pellet boilers.
Maine Energy Systems said Thursday that it will lock in a pellet price of no more than $239 a ton for bulk delivery through June 2014. The offer is good for the first 1,000 customers in Maine and New Hampshire who install the company's boilers.
The company's Northeast Affordable Heat program is available to customers within 150 road miles of Bethel and 60 road miles of Ashland. The program will deliver pellets from four Maine manufacturers: Corinth Wood Pellets, Geneva Wood Fuels, Maine Woods Pellets and Northeast Pellets.
"When most people think of pellet heat, they think of stoves and bags of pellets," said Harry "Dutch" Dresser, the company's managing director. "Maine Energy Systems boilers replace oil- or gas-fired boilers and tie in with existing forced hot water systems, with significantly lower fuel costs."
An average system costs about $13,000 before installation, Dresser said. If heating oil stayed at its current average price of $3.37 a gallon, the investment would take three to five years to pay for itself, he said.
Maine Energy Systems has boiler systems operating in homes, schools, municipal buildings and commercial buildings. In those systems, pellet fuel is delivered in bulk and fed into the boilers automatically.
The program has minimum pellet quantity requirements, and the fuel price guarantee is only for use in new installations of Maine Energy Systems equipment. Some other restrictions apply.
WOOD PELLET BOILER PLAN MOVES AHEAD
By: Matthew Stone -- Kennebec Journal
Town officials have taken the first steps toward installing a wood pellet boiler to heat Fayette Central School, a move that would sharply reduce the school's dependence on oil.
Selectmen this week voted to apply for a Maine Department of Conservation grant to fund the purchase and installation of a pellet boiler and an accompanying 38-ton silo for pellet storage.
"We are very interested in the success that different areas of the state have had with wood pellet boilers," said Town Manager Mark Robinson.
The town's submission of the grant application and acceptance of the award would all be subject to a town meeting vote, Robinson said.
"We would want the townspeople's permission to not only accept the award, but to be on board with converting from a petroleum-based system to a system that's fired by wood," he said.
Initial estimates point to a $225,000 cost to purchase and install the wood pellet boiler, Robinson said. While the pellet boiler would be the school's primary heating source, he said, the school would retain one of its two oil-burning boilers as backup.
Switching the heating source would allow the Fayette school -- which serves children in pre-kindergarten through grade five -- to cut out 98 percent of its oil consumption, the town predicts.
The school currently uses an average of 9,000 gallons of heating oil each year, according to the town. Fayette's current contract has taxpayers paying $2.77 per gallon, Robinson said.
If the town can't secure the Department of Conservation grant, he said, it won't be possible to buy the boiler anytime soon.
As Fayette makes plans for a wood pellet boiler, it's looking to a school district in Franklin County as an example. Phillips-based School Administrative District 58 has installed such boilers at Mt. Abram High School and three elementary schools in recent years. It installed its latest boiler last month.
Superintendent Quenten Clark told the Morning Sentinel in December that SAD 58 had replaced 110,000 gallons of oil annually with 600 tons of pellets. That switch had cut the district's heating costs in half, he said.
SAD 58 purchases its wood pellets from Geneva Wood Fuels in Strong, within the district limits.
"To be able to have the energy product produced in the state of Maine, as opposed to reliance on a petroleum product says a lot about the ability of the state to support its own communities with resources that are here," Robinson said.
WOOD PELLETS AND CREOSOTE BUILDUP
1. Creosote Buildup
o In any type of wood-burning appliance, including pellet stoves, wood fires can leave behind creosote, a type of combustible residue that forms when wood gas is not completely burned off. Creosote resides in the chimney, where it must be cleaned regularly to avoid health and fire safety problems.
Pellet Stoves and Creosote
o Like fireplaces or wood stoves, pellet stoves burn actual wood, so some creosote buildup is possible. However, the amount of creosote build up in a wood pellet stove is minimal compared to other types of stoves, which is due in part to its high energy efficiency rating and its high combustion temperatures.
o In pellet stoves, creosote build up will appear as brown, sticky residue in your stove's flue. The website Pellet Stove Fires recommends cleaning your flue every two months while the stove is in use, which will remove any creosote build up and improve your stove's fuel efficiency. To clean the flue, contract a certified chimney sweep or purchase special creosote removal brushes, which must be inserted into the flue from the inside of the stove or from the exterior aperture. Go to the Chimney Institute of America website for to locate cleaning materials and a certified sweep in your area.
Finding Clean Pellets
o Wood pellets that are excessively damp or that contain impurities may also cause more creosote build up, so its important to know the content and condition of your wood pellets, according to the website Pellet Stove Fires. Wood pellets are offered in two grades: premium and standard. Premium wood pellets are made from more pure materials, such as core wood, and have less inorganic ash content. To determine if your wood pellets contain any impurities, the U.S. Department of Energy recommends examining your wood pellet bag for dirt or dust, which should not exceed 1/2 cup of dust for a 40 pound bag.
PSNH SEEKS LEVEL OF FIRE DAMAGE AT WOOD CHIP PLANT
March 1, 2011
PORTSMOUTH, N.H.—Officials with Public Service of New Hampshire say machinery at a Portsmouth wood-chip processing facility at the Schiller Station was heavily damaged by fire.
PSNH officials say the Monday afternoon fire was caused by friction in a wood pellet crushing machine. The fire burned over multiple floors of conveyor belts, chutes and ducts.
There were no injuries.
The fire shut down the wood chip generating unit, but not two coal fired generating units at the station. Each unit is capable of producing about 50 megawatts of electricity.
Foster's Daily Democrat says it took firefighters from Portsmouth and surrounding communities about 90 minutes to get the fire under control.
Information from: Foster's Daily Democrat, http://www.fosters.com
CURING MAINE'S ADDICTION TO HEATING OIL
Maine, USA -- Maine, New Hampshire, and Vermont have a unique and overwhelming dependence on home heating oil for heat. Dependence on heating oil drains money and jobs and tax revenues from Maine and its sister states. Their dependence on heating oil has already eroded their economies; and that dependence has the potential to destroy the foundations for growth and prosperity as they export more and more of their disposable income to places that are far away.
Maine Depends on Oil to its Economic Detriment
Recent data from the U.S. Census shows that 75.61% of Maine’s homes use #2 heating oil. This is by far the highest proportion of heating oil dependency of any state. The table below shows this fact and also shows that Maine has very limited access to natural gas (3.68% of homes).
Because of these states’ heavy reliance on heating oil, these states are the most petroleum dependent states in the United States (with the exception of Hawaii). See Figure 2, below.
Maine “exports” about $720,000,000 per year in what I call our “oil tax” because Maine homes use about 300 million gallons per year of heating oil and, according to the EIA’s Home Heating Oil Report for 2010, 78% of every dollar spent on heating oil leaves the Maine economy. If that money were to stay in the Maine economy it would produce about 41,000 new jobs that do not currently exist.
(Note: 41,000 jobs is based on an average annual pay and benefits of $37,000 and multiplier effects estimated by FutureMetrics. Job multipliers are based on detailed multiplier tables, by state, from the National Renewable Energy Laboratory, The Jobs and Economic Development Impact (JEDI) Model, revised in 2009. The multipliers’ aggregate increase in final demand is also modified by an assumed 35% tax rate. The median income of $37,000 is from the US Census, 2008. The 35% tax rate is an assumption that includes all taxes that reduce consumption (including but not limited to real estate, sales, income, and excise taxes. This job number does not include any new jobs created by the production of regionally produced fuel such as wood pellets.)
It’s important to consider where heating oil prices will be in 3 to 5 years so that Maine and its neighboring states can plan to mitigate the current and potential negative economic impacts that accrue from this addiction to heating oil.
Will Heating Oil Prices Increase?
Forecasting energy prices with any precision is impossible. However, trends in price movements over time can be estimated.
Heating oil is distilled from crude oil and therefore crude prices, along with domestic demand characteristics for distillate fuels (which include heating oil, diesel fuel, and jet fuel), strongly affect heating oil prices.
The relationship between economic growth and oil prices can be used to estimate future price trends. Based on expected growth rates for global gross economic product, FutureMetrics has estimated the expected crude oil price from 1999 to 2015. The chart below, which is difficult to read on this site, shows that expected prices will increase to at least $175 per barrel by November 2014.
Overall, while heating oil prices may fluctuate over time, the trend will be for increases. The expected price of crude suggests that Maine could see heating oil prices of $4.50/gallon over the winter of 2012-13.
What is the Effect of Higher Heating Oil Prices on Maine and the Region?
What would happen if heating oil reaches the price seen in 2008 (about $4.50/gallon)? A $1.50/gallon increase in heating oil prices from $3.00/gallon adds another $358,000,000 to Maine’s “oil tax.” That loss of disposable income will destroy another 20,700 jobs and would raise the current unemployment rate of 7.29% to 10.26%. (Note: my employment data is from the Maine Department of Labor, November 2010. The increase in the unemployment rate assumes that the civilian labor force remains at the November 2010 level of 696,360. Maine’s labor force has been falling slightly since 2007 (2008 average was 705,258, 2009 average was 704,134, and the 2010 average through November was 699,596.)
Jobs and businesses will suffer; but so will the governments of these states. The loss of more than 20,000 jobs in Maine will lower tax revenues. The state of Maine averages about $5,200 in total tax income per employed resident, according to the Maine Department of Labor and the Maine Budget Office.
The loss of 20,700 jobs would lower tax revenues and that loss would reduce state tax revenue by almost $106 million annually. That is a 3.21% drop in annual tax revenues. At the same time, the demand for services would increase as the increase in heating oil costs disproportionally burdens the poor.
Can the Region Transition off of Heating Oil?
There is a solution to the problem that can not only lower heating costs dramatically but can also eliminate the dependence on heating oil; and that solution can also keep the money spent on fuel in the local economy and stop our exporting hundreds of millions of dollars and destroying tens of thousands of jobs. The solution is to use fuel from our own forests and from dedicated energy crops grown on fallow land.
Maine is the most forested state in the United States and Maine sustainably harvests more than 16 million tons per year of wood from its forests (PDF). New Hampshire and Vermont have less forested land but Vermont has enough non-cultivated cropland that is idle from the decline of the dairy farm sector to grow more than 1.5 million tons per year of woody biomass from dedicated fuel crops. For more on the topic of land availability, see the sidebar at the bottom of this article.
The residential wood pellet fueled boiler experience in Europe can guide Maine and its sister states away from their dependence on heating oil. Pellet fueled boilers are different than pellet stoves. They are fully automatic (fuel and ash handling) and comparable to any modern home heating system for emissions. Whereas most homes in the U.S. that use pellets have stoves, most homes in Europe that use pellets have boilers.
Pellet fuel is also much cheaper than heating oil and propane.
The potential advantages of harnessing the region’s woody biomass fuel potential for heating homes and businesses are many; but job creation tops the list. Tens of thousands of jobs will be created by making the fuel locally, using cheaper fuel, and by eliminating the heating “oil tax.”
The net effect of converting 75% of homes that use heating oil to modern European style pellet boilers would be to create or sustain 79,000 jobs in Maine and almost 147,000 jobs in the three states most addicted to heating oil (based on heating oil at $4.50 per gallon).
We are facing a crisis in our region due to our addiction to heating oil. We saw a preview of this crisis in 2008 but, as with most addictions, pain is quickly forgotten and denial immediately takes over.
The benefits of converting a significant number of homes from heating with oil to heating with pellets are significant. The risks to our economy if we do not convert are also significant. Can we afford to sit on our hands and hope that oil prices won’t rise?
Inaction can only be a product of denial. Prices will rise.
Sidebar: Is there Enough Land?
While an important share of the non-cultivated cropland in the northern New England region produces hay that is necessary for livestock agriculture, and some of the pasture supports pasture-based beef and dairy production, as well as the equine industry, a significant part of both these land categories is used only lightly, frequently only mowed every year or two to keep it open. Assuming that 25% the non-cultivated cropland and pasture is converted to energy crops, and assuming that the average yield per acre is 4 dry tons per year, the table below shows the potential for additional feedstock (assuming 50% moisture to convert from green to dry tons).
Data is from the National Resources Inventory, managed by USDA's Natural Resource Conservation Service. Data is derived from a statistical sample of plots of land, based on observation of land cover from satellite and ground data.)
The article is an excerpt from a longer article that is available for download here.
The information and views expressed in this article are those of the author and not necessarily those of RenewableEnergyWorld.com or the companies that advertise on its Web site and other publications.
AS OIL PRICES RISE, CONSUMERS SEEK ALTERNATIVES
• By Curt Nickisch (@CurtNickisch)
• Feb 25, 2011, 11:26 AM UPDATED 1:40 PM
BOSTON — As the price of oil rises, business is picking up for Massachusetts sellers of alternative home heating fuels.
Wood pellets are back in demand. (WBUR)
Northeast Nursery in Peabody sells firewood, wood pellets and even coal. Thanks to all the storms, business has been good this winter. Now, it’s getting even better, says manager Chris Barboza.
“There was a woman yesterday in the nursery who would have purchased additional heating oil to top off her tank, but she decided not to, [she decided] to waive off that delivery,” Barboza said.
She bought wood pellets instead.
Some area retailers say they’re already running low on some wood supplies. Barboza says it’s a nice boost at a time when business normally starts winding down.
But, Barboza says, the more people who shift their consumption away from home heating oil, the more prices for alternative fuels will go up, too.
VIRIDIS ENERGY INC. ENTERS LETTER OF INTENT TO ACQUIRE CONFLUENCE ENERGY COLORADO-BASED PREMIUM PELLET MANUFACTURER
Vancouver, BC – March 3, 2011 - Viridis Energy (“Viridis”)(TSXV: VRD, OTCQX: VRDSF) announced today that it has entered into a letter of intent to acquire 100% of the outstanding shares of Confluence Energy LLC. ("Confluence"), one of the largest wood pellet plant in the western half of the U.S. This transaction, subject to the applicable policies of the TSX Venture Exchange, will be structured as an earn-out and be accomplished through a share exchange of Viridis Energy common stock and the assumption of debt. The transaction is expected to close during the first half of the current year and is projected to be accretive to the Company’s earnings per share during the first year.
Confluence Energy is a Colorado based, wood pellet manufacturer and distributor with a capacity of 80,000 tons (expandable to 125,000 tons) per year of packaged wood pellets. Consistent with Viridis’s vision, Confluence manufactures wood pellets utilizing pine beetle kill wood (wood from trees killed by mountain pine beetle infestation), a biomass feedstock that is plentiful in the rocky mountain region. The company is a supplier to several large retail customers including national big-box home improvement stores. Confluence was featured in Forbes© magazine in September 2009 for its accomplishment in creating Colorado’s first pellet mill and its focus on creating an opportunity from a potential catastrophic situation, in turning trees decimated by the mountain pine beetle into a renewable energy source.
Mountain pine beetles infestation is predominately focused on western North America, from Mexico to British Columbia, where an estimated 29 million acres are threatened. In Colorado and Wyoming alone, mountain pine beetles are responsible for the destruction of an estimated 2,000,000 acres or 45-60 million of pine trees. Converting the resulting dead trees into high efficiency pellets to be used as fuel, not only serves as a clean energy source, but also helps forests regenerate faster. In addition, wood pellets are more efficient than cord wood for heating as they convert 85% of the pellet’s energy into heat, compared to 70% for cord wood, and generate less smoke and soot, making them more environmentally friendly.
“We evaluated several U.S. and Canadian plants for this stage of our development and selected Confluence as the best synergistic fit from the standpoint of consistent quality of product, customers and footprint. With the Confluence acquisition, Viridis more than doubles its production capacity and expands its distribution reach to both the East and West Coasts of the United States, providing a more efficient access to ports that serve international markets,” says Chris Robertson, chief executive officer of Viridis Energy. “Our mission is to aggressively expand our operations and achieve scale. We are in the midst of growing our business geographically as well as entering into new markets. The demand for clean, inexpensive alternative fuel is growing rapidly. ”
The Company also noted that Mark Mathis, Confluence’s founder and CEO, will continue to manage the Colorado operation, and assume a senior management role within Viridis upon the completion of the transaction.
Commenting on the proposed transaction, Mark Mathis added, “Joining forces with Viridis will strengthen our efforts to develop a solid national retail platform, while reinforcing Viridis’ vertical integration strategy and supporting its drive to achieve economies of scale that will yield cost efficiencies and expanded sales opportunities.”
The Company intends to disclose details on the transaction upon its completion.
About Viridis Energy Inc.
Viridis Energy Inc. (TSX: VRD-V) is a publicly traded, "Cleantech" alternative energy company specializing in the agricultural and wood waste biomass. Located in Vancouver, B.C., Viridis Energy operates Cypress Pacific Marketing and Okanagan Pellet Company, two acquisitions in the wood pellet sector, thus providing the company with vertical integration for distribution and manufacturing.
For more information on Viridis Energy Inc. please refer to the company website at www.viridisenergy.ca.
Certain statements in this release are forward-looking statements, which reflect the expectations of management regarding the Company’s future operations. Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding the future. Such statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements. No assurance can be given that any of the events anticipated by the forward-looking statements will occur or, if they do occur, what benefits the Company will obtain from them. These forward-looking statements reflect management’s current views and are based on certain expectations, estimates and assumptions which may prove to be incorrect. A number of risks and uncertainties could cause our actual results to differ materially from those expressed or implied by the forward-looking statements, including: (1) a continued downturn in general economic conditions in North America and internationally, (2) the inherent uncertainties associated with the demand for biofuels, (3) the risk that the Company does not execute its business plan, (4) inability to finance operations and growth (5) inability to retain key management and employees, (6) ; an increase in the number of competitors with larger resources, and (7) other factors beyond the Company’s control. These forward-looking statements are made as of the date of this news release and the Company intends to update such forward looking information in the Company's MD&A in the event that actual results differ materially from such forward-looking statements contained herein. Additional information about these and other assumptions, risks and uncertainties are set out in the “Risks and Uncertainties” section in the Company’s MD&A filed with Canadian security regulators.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SILVER BAY RESIDENTS TO VOTE ON BIO-MASS PROJECT
By Joe Kimball | Published Mon, Mar 7 2011 9:01 am
It's touted as the first of its kind in the world: a biomass-fueled power plant that would produce heat and energy for a waterfront industrial eco-park, which would also include a plant that would produce wood pellets for the retail market.
Voters in Silver Bay, on Lake Superior's North Shore, will be asked to vote in May on whether to go ahead with funding for the ambitious project, says the Duluth News Tribune.
Another potential anchor for the development, says the paper, is "a combination greenhouse and fish farm that would produce fish, fruits and vegetables for the local market and even algae for biodiesel production. Waste from the fish farm would become food for the algae."
Officials say the project would create 40 construction jobs and the pellet plant would employ about 15.
Voters can learn more during public forums on the project at 6 p.m. March 23 and April 19 at Reunion Hall in Silver Bay.
CREATING JOBS AND CLEAN ENERGY IN ATIKOKAN
Visit http://www.investinontario.com for further information
Ontario, Canada Re-Energizing Northern Forestry Sector
Submitted on 03/07/11, 07:21 AM
TORONTO – February 14, 2011 – Atikokan Renewable Fuels has accepted one of the Province's first new wood supply offers. They will produce wood pellets for domestic and international customers, which can be used to create heating and electricity. This will create up to 95 jobs, help sustain other jobs in the forestry sector and support the local economy.
In addition, with support from the Northern Ontario Heritage Fund Corporation (NOHFC), the company plans to convert an industrial site into a mill that will produce the wood pellets.
The wood supply competition is about putting Ontario's unused wood to work while the government takes steps to introduce a new forest tenure and licensing system. Helping build a stronger forest industry is an important part of the Open Ontario plan to create jobs and opportunities in Northern Ontario.
"Our government wants to support solid, innovative initiatives that will strengthen our forest industry. The allocations we're announcing in this first round of successful proposals will play a significant role in re-energizing Ontario's forest products sector," said Michael Gravelle, Minister of Northern Development, Mines and Forestry, and chair of the NOHFC.
"The crisis in the North American forest industry has required new approaches to job creation in this industry. That's why we are taking steps to transform Ontario's forest sector, creating new jobs and attracting investment in a way that will ensure our forests continue to be managed sustainably. I am excited by today's announcement and the jobs that will be created in Atikokan and Northwestern Ontario," said Bill Mauro, MPP for Thunder Bay-Atikokan.
"This offer of a wood supply allocation is an important step towards creating new forestry-based jobs in Atikokan and surrounding areas. The government has indeed taken bold steps in offering previously unused forest resources within acceptable haul distances from our production facility. The Rainy Lake Tribal Development Corporation, comprising area First Nation communities and their leadership, is also pleased that the selection process will allow their company, Rainy Lake Tribal Contracting, to commence operations as the primary fibre handling and processing contractor at the Atikokan facility," said Ed Fukushima, Atikokan Renewable Fuels.
• Atikokan Renewable Fuels has accepted a wood supply offer of 179,400 cubic metres per year of poplar and birch fibre. This is in addition to an existing offer of 100,000 cubic metres per year.
• Ontario is investing $1 million in the plant conversion through the NOHFC's Enterprises North Job Creation Program and $250,000 toward converting the plant's existing natural gas heating system to wood fibre-based heat through the Northern Energy Program.
• Ontario received 115 submissions in March under the provincial wood supply competition from existing and new forest companies interested in using provincially owned wood and investing in the province.
• The Province is converting the Atikokan Generating Station from dirty coal-fired generation to biomass by the end of 2014.
• Learn more about the Provincial Wood Supply Competitive Process
• Find out about Ontario's forests
• Read Building Our Clean Energy Future, Ontario's updated long-term energy plan
For more information, contact:
Patricia Pytel, Media Relations, Brand Marketing
Ministry of Economic Development and Trade
Lindsey Schober, Account Executive
REPORT: NORTH AMERICAN WOOD PELLET EXPORTS DOUBLE
By Anna Austin | March 08, 2011
Wood pellet exports from North America to Europe have grown as European Union countries strive to reach their 20 percent by 2020 renewable energy goal.
Wood pellet exports from the U.S. and Canada to Europe have doubled in the past two years, with 1.6 million tons of wood pellets shipped from the two countries to the Netherlands, U.K. and Belgium in 2010, according to a report by Wood Resources International LLC.
The report points out that, while Canada has been the major overseas wood pellet provider to Europe for the past 10 years, reaching about 1 million tons in shipments in 2010, exports from the U.S. have taken off since they began in 2008, reaching 600,000 tons in 2010.
The European Union’s goal of reaching 20 percent renewable energy by 2020 can be attributed to the increased demand, as many countries have ramped up their consumption of woody biomass in the form of wood pellets and wood chips in the past few years to meet the renewable target, the report said. More than 11 million tons of wood pellets were consumed in the EU in 2010, up 7 percent from the previous year.
The report also predicts that higher oil prices will benefit wood pellet exporters in North America, and that shipments to Europe can be expected to increase during 2011.
BIOMASS PROJECT OF THE YEAR –
The Wild Center’s High Efficiency Commercial Scale Wood Gasification Boiler Integrated with a Solar Thermal Collection and Storage System
The Wild Center is a 54,000 square foot natural history museum in Tupper Lake, NY. In July 2009, the Center embarked on a project in which it built a 1.7-million-BTU Advanced Climate Technology boiler that would fired by locally produced FSC certified wood pellets. In addition the center incorporated a solar-thermal hot water array and storage system to further boost the efficiency of the heating system and provide low-emission heating in moderate-temperature months. The project was finalized in May 2010 and has won the 2011 Biomass project of the year.
The project combines a low emissions commercial scale wood gasification heating plant, the first of its kind and size manufactured in the U.S. and installed in a visitor experience facility, with a 0.35 million BTU/day solar thermal collection and storage system. The solar thermal collection system contributes BTUs to the wood boiler's hydronic heating water loop during the shoulder season heating months of April - May and September-October, reducing boiler cycling.
The project incorporated an unusual solution for the storage of wood pellet fuel. Rather than construct a tall and conventional silo-like structure on facility grounds, the museum opted to purchase a recycled 40-foot long shipping container and placed it on edge in 4 steel cradles, providing an inexpensive, yet practical and attractive alternative for storing 22 tons of wood fuel. (See image, above.)
The Wild Center also created and installed a public information display on the project including two tabletop exhibits that highlight the benefits of the biofuel and solar thermal technologies. Given the blending of two renenwable energy technologies, coupled with the exposure of the project to the museum's nearly 100,000 annual visitors, the project is a prominent and educationally valuable bioenergy/solar energy demonstration project.
SAVING MAINE FROM HEATING OIL DEPENDENCY
By Lisa Gibson | February 03, 2011
European countries that use residential wood pellet-fueled boilers could be the model for Maine to follow to reduce its dependence on fuel oil for heating.
With its sparse population in comparison with other states around it, Maine lacks the natural gas infrastructure employed in most areas. Largely because of that reality, the state has a serious and detrimental dependence on heating oil.
“It’s a unique and huge dependency,” says William Strauss, president of Maine-based consulting firm FutureMetrics. Strauss’s most recent paper, How to Cure Maine’s Addiction on Heating Oil: A roadmap to avoiding economic disaster in Maine and other regional states, laments the fact that $720 million will leave the state in 2011, to buy 300 million gallons of heating oil for its households. About 78 percent of every dollar spent on heating oil leaves the state’s economy, and more than 75 percent of households use No. 2 heating oil. Furthermore, if that money stayed in the state’s economy, it would create 41,000 new jobs.
The best fuel to replace heating oil is forest biomass, Strauss said. “Maine and the other nearby states have the resources and the infrastructure to convert most homes from heating oil to clean renewable fuel from our forests,” he wrote. “This is not a pipe dream.” The state could be known as the Saudi Arabia of biomass, he added, as it is the most forested state in the union and sustainably harvests more than 16 million tons of wood from its forests each year.
Strauss’s study focuses only on converting household heating systems to wood fuel, but that conversion can be guided by the residential wood pellet-fueled boiler experiences in European countries that already extensively use them, such as Austria. “They’re so far ahead of us on this,” Strauss said. “No homes are built there anymore for fossil fuel use.” In 2006, the European Union used almost 62 million oil equivalent tons of woody biomass, tens of millions more than any other renewable sources, including solar, wind, geothermal, hydro and biogas, according to the paper.
Pulp and paper has been Maine’s primary forest industry for more than a century, but with an anticipated decline in demand for paper in an increasingly electronic world, that supply chain and livelihood could dwindle. “It’s a transition that’s occurring,” Strauss said. “I think we’re going to see paper demand dramatically decrease.” But even in the face of that declining demand, the forest products sector can remain the mainstay of Maine’s manufacturing sector if value-added refined fuel gradually replaces some or all of the pulp production, Strauss wrote.
As current pellet production capacity in the state cannot support the volume needed to replace residential heating oil, more plants would be required, but there is certainly enough wood, he said.
The Northeast Biomass Thermal Working Group is diligently taking steps to contact policymakers in key states to get a strategy rolling that can incentivize the use of woody biomass. Policy paves the way for its use in the European countries that have adopted it extensively, as well as a willingness to pay a little more for the fuel in order to help transition from fossil fuels, Strauss said. “There should be some coherent energy policy that envisions a transition off this oil.”
ASHLAND HOSPITAL IS FAR AHEAD OF BIOMASS CURVE
by Joe Cadotte
An idea sketched on a napkin inside an Ashland restaurant 27 years ago has transformed the Memorial Medical Center into one of only two or three hospitals nationally that runs off of waste wood.
With 99 percent of the hospital’s energy needs coming from wood that might otherwise have been discarded, the Ashland hospital is many steps ahead of the biomass trend we’re seeing today.
In 1984, MMC administrators were looking for ways to restrain health care costs. Their plan was to use a wood burning boiler to supplement three gas boilers that were installed in 1972 when the facility was built.
“The whole project was designed on a napkin by one of our previous vice presidents and by the president of a heating and plumbing contractor. I knew from the start that the project would be a success,” said MMC Vice President Les Whiteaker. “We were looking for ways to save heating costs, and I think they had both heard of a system somewhere else in the country that was burning wood chips and creating heat from it for a hospital.” Using waste wood, however, was unique.
“There are hospitals that run off of wood heat, but they’re probably burning pellets and other types of things. There’s probably only a few of us in the country that are burning wood chips,” Whiteaker said.
During its design phase, Whiteaker was in charge of assessing the cost effectiveness of the boiler. “I thought it would take three to four years for the boiler to pay for itself,” he said. To his surprise, energy savings were sufficient to offset the $468,000 investment in just 30 months.
Over the years those savings have amounted to more than $6 million. By burning wood, the hospital annually saves $400,000, making medical services 22 percent less than the state average.
“We just pass it on in the form of lower prices. The private paying patient is the one that benefits from that. We set our prices based on our financial requirements. If we don’t have those expenses…it creates lower prices,” Whiteaker said.
“Anything that’s saved from operating costs goes right back into technologies. Medical equipment is always expensive. I know the money goes right back into that,” said Eric Gates, director of building operations.
There also are other benefits.
“A healthy and stable hospital drives a local economy and makes it easy for people to decide to re-locate there,” Whiteaker said. It also provides people with additional expendable income, “and that helps the economy.”
A wood burning boiler makes sense for Northwestern Wisconsin, but wouldn’t work everywhere.
“In our case, we’ve got a lot of wood chips up in this area, and it fits pretty well with the environment, the economy, and what people are doing for a living,” he said.
The sustainable aspects of a wood-burning boiler benefit the environment. One-hundred percent of the wood chips burned at the MMC are waste from White River Hardwoods in Mason, Wis. Eric Gates, who maintains the boiler, says much of that wood otherwise would be thrown away.
“We’ll get a 20-yard dumpster full of ash per month,” Gates said. “That’s used for soil amendments, local farms. It goes back to the environment in a good way. It used to go to landfills, but they found it to make a very good soil amendment.”
Whiteaker said MMC hasn’t received criticism for burning 350 tons of wood per month, but the Department of Natural Resources ensures the hospital adheres to emission guidelines.
“It’s definately cleaner than burning coal or oil, probably not as much as natural gas. We do have a DNR permit. We are regulated. Our stack temps have to be pretty well watched. We test once a day for carbon monoxide. We’re always looking for the cleanest burn we can get. You will never see any smoke because we have induction fans and equipment on the boiler that gives us one of the cleanest burns,” Gates said.
Gates also is director of building operations at the Memorial Hospital in Hayward, where a similar boiler could be installed within five years.
The Ashland boiler measures eight feet wide, 12 feet long, 15 feet high and supplies enough steam to heat the 200,000 square foot hospital year round. The steam is also used for cooking, heating water and sterilizing medical equipment.
EPA CALLS ON THREE OKLAHOMA POWER PLANTS TO SWITCH TO NATURAL GAS
March 8, 2011
Source: US Environmental Protection Agency
The U.S. Environmental Protection Agency (EPA) is proposing a clean air plan which will improve visibility and protect human health by reducing pollution at three Oklahoma power plants.
Operators of these oldest coal-fired power plants will be required to install technology or switch to cleaner burning natural gas to control sulfur dioxide (SO2) pollution. These plants were originally built more than 30 years ago, and federal law requires them to take practical steps to modernize their pollution controls.
The new limits are expected to reduce emissions of SO2 from the plants by about 95 percent, resulting in a reduction of approximately 61,000 tons of SO2 per year. These three power plants emit greater than one-third (36%) of all the SO2 pollution from the hundreds of industrial and utility sources in Oklahoma. Sulfur dioxide is toxic and can react with other chemicals to form small particles, which are harmful to public health.
“The steps we are taking to address the sulfur pollution from the oldest coal power plants will improve air quality for generations to come,” said EPA Regional Administrator Al Armendariz. "Everyone must continue to take efforts to reduce pollution, use cleaner sources of energy, and preserve our national wildlife areas."
EPA’s proposed Federal Implementation Plan (FIP) would reduce emissions at the Oklahoma Gas and Electric (OG&E) plant near Muskogee, the OG&E Sooner plant in north central Oklahoma and the American Electric Power/Public Service Company of Oklahoma plant northeast of Tulsa. These reductions are necessary to meet regional haze requirements under the Clean Air Act. The plants will have three years to add SO2 scrubbers, switch to natural gas, or use a combination of these approaches.
The Clean Air Act of 1990 requires states to control emissions that cause air haze. EPA has an obligation to create a federal clean air plan when a state implementation plan (SIP) does not adequately address Clean Air Act requirements.
EPA’s evaluation of the Oklahoma SIP found that all Oklahoma sources of air pollution except these three coal-fired power plants will meet the level of control needed to address these Clean Air Act requirements.
EXELON CEO: LEGISLATION NOT NEEDED TO TRANSITION POWER GENERATION TO CLEANER ENERGY
March 8, 2011
In a policy address hosted by the American Enterprise Institute, Exelon Chairman and CEO John W. Rowe said that no additional federal legislation is necessary to drive the nation’s transition to an economic clean energy future. Rowe said the combination of abundant natural gas, well-functioning energy markets, and EPA enforcement of the Clean Air Act is already working to modernize the nation’s electric generation fleet, improve air quality, manage costs and increase global competitiveness.
“Congress and the states, in well-intended efforts to clean the electric generation fleet, have enacted and proposed bills that would burden consumers, cripple markets and increase the federal debt, while doing little for air quality and nothing for the nation’s competitive position,” Rowe said. “I’m asking that Congress do nothing.”
Rowe said the United States already has the basic clean energy tools it needs, most notably natural gas, which has recently become domestically abundant and relatively inexpensive. He believes natural gas can make great advances in affordably cleaning up the country’s electricity generation fleet and enhancing our national security. But energy policy driven by mandates and subsidies for the most expensive forms of generation—such as new nuclear, cleaner coal, gas, wind, solar and other renewables—makes consumers pay more than they should.
“Cheap natural gas allows the energy market to work and technologies to compete without introducing new market distortions,” Rowe said. “When cleaner coal, wind, solar and new nuclear are forced into the market through mandates, they create an uneconomic, unfair playing field. It not only costs electric customers more, it also adds to the federal debt.”
He emphasized that Congress should not stop the EPA from enforcing the Clean Air Act, a law that has had strong bipartisan support for the past 40 years. Rowe also pointed out that the rules EPA is proposing are based on existing law, so they are neither new nor unexpected.
“EPA’s rules will level the playing field by putting a price on the cost of air pollution, which will put those companies that have not modernized their plants on par with those who have. By reflecting these costs, the market will pick the most inexpensive technologies to clean up the stack,” Rowe said. “The rules will affect only the smallest, oldest and most inefficient coal plants because they will no longer be able to compete with today’s newer, cleaner electricity generation.”
Chicago-based Exelon is moving forward with its own efforts to achieve a clean energy future through Exelon 2020, its plan to effectively eliminate the equivalent of the company’s entire 2001 carbon footprint by 2020. Exelon is now halfway to the goal, equal to taking about 1.5 million cars off the road every year.
Rowe is the electricity industry’s longest-serving chief executive, with 27 years as a utility CEO. He was among the first CEOs in the industry to focus on climate change, first testifying before Congress on the potential effects of carbon emissions in 1992. Rowe is the past chairman of the Nuclear Energy Institute and the Edison Electric Institute. He was co-chairman of the National Commission on Energy Policy and serves on the Secretary of Energy’s Blue Ribbon Commission on America’s Nuclear Future, a panel to provide recommendations on managing used nuclear fuel and waste.
GLOBAL CLEAN ENERGY UP 30% IN 2010 FROM 2009: BLOOMBERG REPORT
Clean energy investment worldwide during 2010 totaled $243 billion, a rise of 30% from 2009 and surpassed all previous levels since records began in 2004, according to Bloomberg New Energy Finance. The financial research group released the tally on March 2 when it announced the winners of its 2010 league tables of leading investors and financial service providers in clean energy and the carbon markets. The numbers showed promise for future growth, a Bloomberg New Energy Finance executive said.
The 2010 Clean Energy League Tables are based on results from Bloomberg New Energy Finance's database of financial transactions in clean energy and carbon markets. The tables provide a quantitative benchmark for clean energy investors, project financiers, investment banks, funds, carbon off-takers, and law firms.
NORTH AMERICAN PELLET EXPORTS REACH 1.6 MILLION TONS
March 09, 2011
Over the past two years, North America has become a major supplier of wood pellets to Europe. In 2010, an estimated 1.6 million tons of pellets were shipped from the US and Canada to the Netherlands, the UK and Belgium, according to the North American Wood Fiber Review. This is a doubling of volume compared to 2008.
The European Union has stated that by 2020, at least 20 percent of total energy consumption should be supplied by renewable energy resources. In an effort to reach this target, many countries have increased their consumption of woody biomass in the form of both wood chips and pellets the past few years. In 2010, just over 11 million tons of wood pellets were consumed, which was about seven percent higher than the previous year.
Demand for wood pellets in some European countries, including Sweden, the Netherlands, Belgium, Italy, Denmark and the UK, has outpaced domestic production over the past few years. This has resulted not only in increased imports from neighboring countries, but also from North America. Over the past ten years, Canada has been the major overseas supplier of pellets to Europe, reaching about one million tons in shipments in 2010, according to the North American Wood Fiber Review. The US did not start exporting pellets until 2008 when 85,000 tons were shipped to the Netherlands, but exports have since taken off, reaching almost 600,000 tons in 2010. In fact, the total shipments from the US and Canada have almost doubled in just two years.
The majority of North American pellets have been shipped the Netherlands, the United Kingdom and Belgium, with occasional shipments to Sweden and Denmark. In 2010, almost 50 percent of the Atlantic trade was destined for the Netherlands, while one-third landed in ports in the UK.
The entire review is available by subscription under www.woodprices.com.
GLOBAL TRADE OF WOOD CHIPS WAS UP IN 2010 AFTER SHARP DECLINE IN 2009
Hakan Ekstrom, Wood Resources International | Mar. 9, 2011, 2:24 PM | 17 |
Hakan Ekstrom is the President of Wood Resources International LLC.
• US, Canadian Log And Lumber Exports To China Up Over 150 Percent In...
Seattle, USA. The international financial crisis in 2009 had a major negative impact on worldwide demand for pulp and paper products. As a result, the consumption of wood chips and pulpwood for pulp production was lower, and global trade of wood chips fell accordingly. However, in 2010, pulp markets improved and global shipments of wood chips were up substantially.
Wood chip trade had increased on average five percent per year between 2002 and 2008, reaching an all-time high of approximately 33 million tons in 2008. This upward trend was broken in 2009, when trade fell 17 percent from the previous year. In 2010, wood chip shipment volumes went up by 25 percent to reach a new high. This was primarily thanks to a substantial increase in demand for wood chips in China, as reported in the latest issue of the Wood Resource Quarterly.
China has evolved from being a net exporter of chips five years ago, to being a major chip consumer, having quadrupled imports in just two ears. The country now imports over 28 percent of all chips traded in the Pacific Rim and is the world’s second largest importer of wood chips after Japan.
Trade of wood chips is still the highest in the Pacific Rim, accounting for almost 60 percent of the total global trade and over 95 percent of water-born trade. The major exporting countries in 2010 have not changed much from previous years, with Australia being the biggest exporter followed by Chile, Vietnam, the US and Thailand. These five countries together export just over 19 million tons, or 22 percent more than the previous year, according the WRQ. A majority of the shipments are Eucalyptus wood chips destined for pulp mills in Japan and China.
Trade of wood chips is likely to increase in 2011 as the global economy slowly recovers, and as a consequence, the demand for most forest products will improve. In addition, many energy companies in Europe are searching for new sources of biomass, which will further expand the overseas trade of wood chips, biomass chips and wood pellets.
Global timber market reporting is included in the 52-page quarterly publication Wood Resource Quarterly. The report, established in 1988 and with subscribers in over 25 countries, tracks sawlog, pulpwood, lumber and pellet prices and market developments in most key regions around the world
Wood Resources International LLC
Read more: http://www.businessinsider.com/global-trade-of-wood-chips-was-up-in-2010-after-sharp-decline-in-2009-2011-3#ixzz1GCqWxZsV
UNC CHANGES WOOD PELLET PROVIDER FOR MARCH TESTING
TRANSPORTATION ISSUES DELAY TESTS
By Melvin Backman | The Daily Tar Heel
Updated: 8 hours ago
The University has encountered another obstacle in its quest to become coal-free.
Facing further delays in its testing of wood pellets as a coal alternative, the University changed suppliers after Carolina Wood Pellets was unable to resolve transportation issues, said Ray DuBose, director of Energy Services for UNC.
The second round of testing had been scheduled to begin in November, but had to be pushed back to March when the company could not secure covered rail cars to deliver the pellets, DuBose said.
The new supplier, Woodfuels Virginia, was the only other eligible choice and, as the second place bidder, will cost the University $155 per ton, marking an increase of about 7 percent, or $10 per ton, from Carolina Wood Pellets’ bid.
Carolina Wood Pellets supplied 20 tons of pellets for the first round of testing in September. The company could not be reached for comment.
“The test in September was very successful,” DuBose said, “and we’re looking forward to the next test.”
The University chose March for the delayed second round of testing because it did not want to interfere with winter energy needs such as heating and steam.
UNC selected Woodfuels Virginia as its new supplier because it was the only other eligible bidder from a bid issued during the summer.
Lignetics, which had a lower bid price but did not have proper transportation arranged in time for the bid’s deadline, was not contacted about replacing Carolina Wood Pellets, said John Utter, Lignetics’ general manager.
“It’s certainly something we would love to be a part of,” he said.
DuBose said Woodfuels Virginia should be a dependable supplier, although he said he had a similar attitude toward Carolina Wood Pellets.
Carolina Wood Pellets is a company that normally produces bags of 5-millimeter wood pellets for domestic uses such as wood-burning stoves.
UNC would have been the company’s first customer for its larger 8-millimeter wood pellets intended for more industrial uses.
“I don’t have any reason to believe that (Woodfuels Virginia) won’t be able to deliver what we need,” DuBose said.
Jacob Blondin, general manager for Woodfuels Virginia, said the company has dealt with customers of UNC’s size before. He said the company has supplied wood pellets to other universities on the east coast, but declined to name any of them.
DuBose said the failure of Carolina Wood Pellets to complete its bid did not speak to a shallow market for wood pellets. He said the bid process for wood pellet testing had made the University aware of a wider variety of suppliers.
“By purchasing the wood pellets, we are still helping the market develop in this area.”
Contact the University Editor at firstname.lastname@example.org.
HEATING OIL USE FALLS AS PRICES, IRRITATION RISE
CLARKE CANFIELD, Associated Press
Updated 07:25 p.m., Saturday, March 12, 2011
Read more: http://www.ctpost.com/news/article/Heating-oil-use-falls-as-prices-irritation-rise-1077362.php#ixzz1GZyphf00
PORTLAND, Maine (AP) — No longer are Tom Wright's heating costs tied to events a world away over which he has no control. Faced with a $10,000 heating bill, he got rid of his oil furnace and brought in a wood pellet stove to heat his home and office.
Oil and gasoline prices are sky-high, and heating oil use is tumbling as people find alternative ways to stay warm — evidence that Americans' efforts to wean themselves off oil can bear fruit.
"It's more than just watching the price of oil," said Wright, a former construction company executive who now heads a nonprofit that works with at-risk children. "It's watching what's going on in the world and how much is affected by the need for oil."
Millions of U.S. households use oil to heat their homes, but the Northeast has a higher proportion of people who use it as their primary heating source than any other region. Nowhere is the dependence greater than in Maine, where oil heats three out of four homes.
Heating oil prices have shot up 32 percent over the past four months in Maine. But consumption has fallen by more than a third in the past five years, according to the U.S. Energy Information Administration. Nationally, sales of residential heating oil have fallen 26 percent.
Unrest in the Middle East and high worldwide demand for oil have pushed crude prices to around $100 a barrel and pushed gas prices to nearly $4 a gallon. But with heating oil, inventories are at a five-year high even though demand is down, said John Kerry, director of Maine's Office of Energy Independence and Security.
He blamed oil traders of artificially driving up prices because of the political turmoil in the Middle East.
"The fundamentals of the marketplace, in my estimation, do not justify the high prices we're seeing today," Kerry said.
In 2004, Americans bought nearly 6 billion gallons of heating oil. The use in 2009 use totaled about 4.4 billion gallons, according to the EIA.
At the same time, residential heating oil consumption in Maine fell from 361.2 million gallons to 233.7 million gallons — a drop of 35 percent. In New England as a whole, heating oil use fell 17 percent from 2004 to 2009.
The price of heating oil for the most part tracks the price of crude oil. Residential heating oil was selling for an average of $3.20 a gallon in the U.S. in January — the highest it's been since October 2008, shortly after crude oil skyrocketed to nearly $150 a barrel.
Frustrated with such prices, people are making their homes more energy-efficient, supplementing with space heaters, buying more efficient oil furnaces, or simply switching to natural gas, wood pellets or some other fuel.
Some consumers have simply decided they're going to wean themselves off oil after living through wild price swings and uncertainty, said Jamie Py, executive director of the Maine Energy Marketers Association.
"It's a simple 'I'm going to reduce my consumption,'" he said.
Wright needs to heat his home in Freeport, as well as his office in a barn — all told, about 7,000 square feet.
The oil company wanted $10,000 up front to heat his house this winter under a pre-paid contract, he said. Instead, he expects to buy 8 or 9 tons of pellets, which have been selling at $210 a ton as of late.
Besides the cost savings, Wright likes the idea of buying a Maine-produced product rather than foreign oil.
As the price of oil goes up, he is convinced he made the right decision. His high-end furnace cost $24,000, but he's expecting to make that up in five to seven years. Heating oil was selling for an average of $3.65 gallon in Maine on Monday, up from $2.76 at the beginning of November.
Suzanne Sayer weatherized her two-bedroom ranch house in Kittery last fall by adding insulation in the attic and basement, replacing two doors, resetting a window, and closing a gap between the chimney and the house. Sayer has oil delivered twice in a typical winter, but this year she hasn't had to have a delivery since her tank was filled in August.
"I wanted to see if could go the entire winter without a delivery," Sayer said. "I'll probably wait until summertime, when the price has gone down, to buy more oil."
The price volatility takes a toll on oil dealers, who are seeing their oil sales drop and have to gamble on when to buy oil, Py said.
"The market is driving people to do what makes sense for them," Py said. "We've been successful in telling people to conserve."
Read more: http://www.ctpost.com/news/article/Heating-oil-use-falls-as-prices-irritation-rise-1077362.php#ixzz1GZybEvCS
Wood Pellet Exports from the US and Canada to Europe Reached 1.6 Million Tons in 2010, a Doubling of Shipments in Just Two Years
Published: Sat Mar 12, 2011
Seattle, WA, March 12, 2011 --(PR.com)-- The European Union has stated that by 2020, at least 20 percent of total energy consumption should be supplied by renewable energy resources. In an effort to reach this target, many countries have increased their consumption of woody biomass in the form of both wood chips and pellets the past few years. In 2010, just over 11 million tons of wood pellets were consumed, which was about seven percent higher than the previous year.
Demand for wood pellets in some European countries, including Sweden, the Netherlands, Belgium, Italy, Denmark and the UK, has outpaced domestic production over the past few years. This has resulted not only in increased imports from neighboring countries, but also from North America. Over the past ten years, Canada has been the major overseas supplier of pellets to Europe, reaching about one million tons in shipments in 2010, according to the North American Wood Fiber Review. The US did not start exporting pellets until 2008 when 85,000 tons were shipped to the Netherlands, but exports have since taken off, reaching almost 600,000 tons in 2010. In fact, the total shipments from the US and Canada have almost doubled in just two years.
The majority of North American pellets have been shipped the Netherlands, the United Kingdom and Belgium, with occasional shipments to Sweden and Denmark. In 2010, almost 50 percent of the Atlantic trade was destined for the Netherlands, while one-third landed in ports in the UK.
Higher demand for oil by Asia and Latin America and the uncertain situation in the oil-producing counties in the Middle East and northern Africa has boosted oil prices about 28 percent the past three months. Higher oil prices will benefit wood pellet exporters in North America, and shipments to Europe can be expected to increase during 2011.
The North American Wood Fiber Review has tracked wood fiber markets in the US and Canada for over 20 years and it is the only publication that covers both pulpwood and biomass markets in North America. The report includes prices and market commentary for 15 regions on the continent, and is an essential source for anyone that needs to track pulpwood, wood chips and biomass prices in the largest and most dynamic wood fiber market in the world.
Wood Resources International LLC
BRITAIN'S BIGGEST POWER STATION GOES BIOMASS
Britain's biggest coal-fired powered station is also the country's biggest emitter of the greenhouse gas CO2
Britain's biggest coal-fired powered station is also the country's biggest emitter of the greenhouse gas CO2. But it has another claim to fame - it burns more biomass than any other power station in the world.
Drax Power Station in the north of England burned a million tons of biomass last year -- generating 12 percent of its electricity.
Peter Emery says they are already in transition - they're going green.
[Peter Emery, Drax Power Station]:
"We are a coal-fired power station and we want to contribute to moving towards a low carbon economy and we see biomass as a way to do that. Carbon Capture and Storage as well may have a role but we see that as five and ten years down the road and if you are trying to reduce CO2 today, urgently, then this is a good way to do it."
Drax has invested more than 130 million dollars in biomass infrastructure including this automated pelleting plant.
[Peter Emery, Drax Power Station]:
"We tend to burn material that is already produced but is not being put to good use and that is how you industrialised this process and how you keep it cost effective."
But farming for energy is a controversial and growing activity - helping to push up world food prices according to critics.
Chris Bradley is one of 100 farmers in this part of the country growing Miscanthus or Asian elephant grass for Drax - but not on premium land.
[Chris Bradley, Farmer]:
"I think putting this on grade one or two land is probably not an option and possibly not even morally right, I wouldn't know. But certainly on the lower grade soils like I've done -- yeah, it is a good option."
While there is much attention focused on the green credentials of solar, wind or wave power as possible solutions to the world's search for a clean energy supply, it seems the established electricity industry is already cleaning up its act with a fuel found in abundance the world over.
CANADIAN ENERGY COMPANY IN NEGOTIATIONS WITH KREMMLING PELLET PLANT
Viridis Energy Inc. enters letter of intent to acquire Confluence Energy
By Reid Armstrong
Grand County, CO Colorado
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Doug Shaw watches bags of wood pellets come out of the packaging machine at the Confluence Energy pellet plant in Kremmling shortly after the plant opened in 2008.
Byron Hetzler / Sky-Hi Daily News file photo
KREMMLING — Confluence Energy recently announced plans to merge with Canadian-based alternative energy company Viridis Energy Inc.
Viridis is a publicly traded company specializing in agricultural and wood waste biomass. Headquartered in Vancouver, B.C., Canada, Viridis operates Cypress Pacific Marketing and Okanagan Pellet Company, two firms in the wood pellet sector.
Kremmling-based Confluence Energy has one of the largest wood pellet plants in the western United States, with a capacity of 80,000 tons (expandable to 125,000 tons) per year of packaged wood pellet,. It manufactures its wood pellets utilizing the region's abundant resource of pine beetle kill wood.
“We evaluated several U.S. and Canadian plants for this stage of our development and selected Confluence as the best synergistic fit from the standpoint of consistent quality of product, customers and footprint,” said Chris Robertson, chief executive officer of Viridis Energy. “With the Confluence acquisition, Viridis more than doubles its production capacity and expands its distribution reach to both the East and West coasts of the United States, providing a more efficient access to ports that serve international markets."
Viridis entered, March 3, into a letter of intent to acquire 100 percent of Confluence energy's outstanding shares. The deal is expected to close by June.
Mark Mathis, founder and CEO of Confluence, said he's been working with Viridis Energy in recent months to co-market products.
“We have a similar vision of where the industry is going,” Mathis said. “We both think consolidation is important and felt this alliance made sense. And, it's been proven that we've been able to add volume to each other's facilities with what we've done already.”
Viridis has hundreds of existing accounts, Mathis said: “They are exporting product, and we can backfill into the residential markets.”
Mathis said Confluence has been operating five days per week this winter and hasn't had loads of product on the ground like last winter.
“Things have improved,” he said. “We were profitable last year and we have been profitable (so far) this year. ... We are making traction on getting our past due accounts paid,” he added. “But, it's still a tough market.”
Mathis said he thinks higher oil prices could push more people toward alternative energy next year and believes that if all goes well with the merger he will start running the plant 24/7 by the beginning of May.
“This will create the jobs and the economic development we've wanted this entire time. It's really a benefit to everybody,” he said.
Mathis will continue to manage the Colorado operation and will assume a senior management role within Viridis upon the completion of the transaction.
“My job here won't change much,” he said. “But I will have some new responsibilities.”
As part of the purchase deal, Viridis Energy will assume Confluence Energy's debt and then Confluence will have to perform at certain levels to get payout, Mathis said.
Viridis will also invest some capital into the facility to help solve a few bottlenecks in production.
"Our mission is to aggressively expand our operations and achieve scale. We are in the midst of growing our business geographically as well as entering into new markets. The demand for clean, inexpensive alternative fuel is growing rapidly,” Robertson said.
“I think it's a great opportunity,” Mathis added. “Both pellet plants (in the region, including the plant in Walden) have been struggling. This gives us a leg up, allows us a better reach. We can apply some of the learnings (from Viridis), reduce cost and improve our footprints.”
Viridis intends to disclose more details about the transaction upon its completion.
For more information on Viridis Energy Inc., refer to the company website at www.viridisenergy.ca.
WORLD'S BIGGEST BIOMASS PLANT PLAN APPROVED
1:30pm Wednesday 16th March 2011
TILBURY could soon be home to the world’s largest biomass plant after its power station got permission to start vital works.
The RWE N Power station, off Fort Road, is currently coal-fired, but plans to run entirely on wood pellet biomass fuel by the end of the year.
The plant could have a generating capacity of about 750MW, in comparison to 265MW at Alholmens Kraft Power Station in Finland, currently the world’s largest biomass power station.
On Monday, Thurrock Thames Gateway Development Corporation approved the installation of two vacuum ship unloaders on the station’s jetty, the relocation of the old ship unloaders for coal, plans for the extension and enclosure of an existing conveyer junction tower, and a new dust separator and conveyors, all essential for the switch to biomass.
A spokesman for the power station said: “We are delighted we now have the necessary consents in place to develop the option of converting our existing power station.
“Work to convert all three of the station’s units to generate power from sustainably sourced renewable wood pellets until the closure of the power station, by the end of 2015, is now likely to start in the summer.
“The converted plant is expected to be fully operational towards the end of 2011.”
Biomass is considered a much cleaner fuel, substantially reducing the creation of ash.
The power station already uses some biomass fuel in place of coal – under European regulations, the coal-fired station must close by 2015.
The spokesman said the firm is looking at a “range of options” for the power station after this.
REPORT: NEGLECTED ENERGY SOURCES VITAL FOR DEVELOPING NATIONS
By Julius N. Uma
March 16, 2011 (JUBA) - Developing nations are not fully utilising biomass fuels which could enable them to fight poverty, create jobs, gain energy independence and help to both limit and adapt to climate change, a recent report has revealed. The London-based research organization, International Institute for Environment and Development (IIED) published the report on 10 March 2011.
The report urges such nations to take advantage of the fact that they are already dependent on biomass fuels. The infrastructure which utilises these resources, such as wood and charcoal, can be developed in a move towards a greener economy in which the poor benefit from producing sustainable, clean energy.
The IIED statement further says that reliance on biomass fuels will increase from 10 to 30 percent of global energy consumption by 2050. There are new technologies which will aid this with the capacity to convert wood to liquid and gaseous fuel; and to produce wood bundles or pellets that can be ‘gasified’ to make electricity. In Austria 80% of new homes are reportedly equipped with wood pellet boilers and Denmark plans to double its use of biomass energy to help become carbon neutral by 2050
The report says that developing countries tend to treat biomass energy biomass fuels as traditional, dirty, unhealthy, and threat to forests. It also shows how they can turn their already heavy biomass dependence into an advantage. According to the report, biomass energy can meet a wide range of energy needs: from irrigation pumps, illumination, agricultural processing, refrigeration, transport, telecommunication and more.
“Many governments in developing nations dissuade people from burning wood or charcoal as fuel as they think it is backward, but this just criminalizes poor people for their energy needs and does little to limit deforestation,” says Duncan Macqueen, a senior researcher in IIED’s natural resources group and co-author of the report.
He added, “Instead government should embrace and legalize biomass fuels as a source of energy and enact policies that make supply chains sustainable.” The report explains that biomass can be a renewable and sustainable source of energy if nations manage their forests correctly and carry out replanting. Biomass, explains the report authors, produces lower emissions of greenhouse gases than fossil fuels as biomass energy. Also, its production is labour-intensive it can offer employment options to reduce poverty, while the potential health hazards can be easily solved by better processing and stove technologies. “Fossil fuels are running out and threatening our global climate in the process, so the hunt is on for greener more sustainable energy,” says Sibel Korhaliller, co-author of the report.
“Developing nations that get serious about biomass energy and end any historic prejudices against such fuels will greatly serve their national interests. This will need a new approach that legalizes and secures sustainable production by and for the millions of poor people who both produce and depend on biomass for energy,” Korhaliller adds.
WORLD'S LARGEST WOOD PELLET PLANT TO OPEN IN GEORGIA
By Bill Esler
Added: March 16, 2011
WAYCROSS, GA – The world's largest wood pellet plant for biofuel is expected to open later this month in Waycross, GA. Initially announced in January 2010, it is the result of collaboration between RWE Innogy of Germany and BMC of Sweden that will create 75 jobs and represents a $150 million investment in Waycross, GA.
The wood pellet production plant is expected to produce 750,000 tons of wood products annually for export to Europe, to fuel biomass power generators like the one shown here. RWE served as an investor in this project, while BMC carried out the development of the new facility. RWE and BMC plan to create the world’s largest renewable energy capacity of wood pellets produced at the new facility. Once they are shipped to Europe, RWE will use the wood pellets to meet the growing European demand for renewable energy.
Updated: Today at 8:20 PM
Maine Voices: Another solution to our oil dependence: geothermal heat
FINANCING CAN EASE THE INSTALLATION COST, WHICH CAN BE FURTHER OFFSET BY VASTLY REDUCED HEATING BILLS.
RAYMOND - Les Otten, in his excellent article about pellet heating systems in the March 5 issue of the Portland Press Herald ("Wood pellets can help with oil crunch, says industry entrepreneur"), correctly observed that pellets are naturally available in Maine, and that pellet heating is lower cost than other fossil fuel options.
ABOUT THE AUTHOR
John Logan, B.Sc., Ph.D., is regional director in Maine of Water Energy Distributors Inc. in Raymond.
He also claimed that pellet heating is half the cost of electric heat, which is not necessarily true. Only with electric resistance heaters is that statement accurate.
In fact, when electricity is used in ground source heat pumps, pellet heat is not half the cost of "electric" heat, but actually twice the cost of electrical pump heat. That's because ground source heat pumps require only 1 unit of electricity to produce about 4 units of heat to the home. Further, most of the heat supplied by these heat pumps comes for free from a continual supply of clean, renewable solar energy stored in the ground every day.
Sometimes called "geothermal" heat, this infinite source of thermal energy stored in the ground is indeed the "sleeping giant" of low-cost, clean heating available in Maine.
Some detractors claim that although geothermal heat is indeed the least expensive heat in Maine, it is more expensive to install. However, when geothermal installations are financed, rather than being paid for as a lump sum up front, it can be shown that homeowners start saving money the very first day when they turn on their heat pump.
As Mr. Otten points out, northern Europe is way ahead of the United States in terms of smart approaches to heating. In addition to pellet stoves and boilers, ground source heat pumps have been installed in Europe for many years. In fact, currently in Sweden, 85 percent of all new home construction uses ground source heat pumps for home heating. The remaining 15 percent of new homes are in communities with centralized district heating, using biofuel. Smart Swedes have no dependence on foreign oil for their domestic heating, something they started planning for in the 1980s.
Geothermal heat pumps' low- cost heat is one of the best-kept secrets in Maine. In fact, installation of these systems started in the Bangor area in the 1970s. Every time there has been a spike in oil prices, there was a blip in heat pump installations in Maine. This happened in the '70s, the '80s, the '90s, and again in the early 2000s. In 2008, when oil costs took off, heat pump installations increased by some 400 percent, but eased off somewhat as oil prices subsided. However, the federal 30 percent tax rebate for geothermal installations from 2009 through 2016 has kept the growth of heat pump installations alive. Indeed, an exponential growth can be expected this time around, rather than a short-lived blip.
The predominant form of ground coupling for geothermal systems in Maine is by means of a drilled well. Many times the same private well is used by homeowners for their own domestic water. Maine's distributed settlements without town water, its geology, and its overdependence on heating oil make ground source heat pump heating systems ideally suited to the state.
For new residential construction, as in Sweden, geothermal systems should be the lowest-cost heating technology of choice. Also, for existing dwellings, the following favorable set of statistics applies:
• Currently 80 percent of Maine residences heat by oil. This provides a huge potential geothermal retrofit market.
• 70 percent of residences are owner-occupied, giving great incentives to invest in low-cost heat.
• 50 percent of residences already have their own well for domestic water. Hence, they may have the ground coupling part of their geothermal system already available, and paid for.
• The average cost of oil in Maine is $3.65 per gallon. Compare this to geothermal heat, with electricity at 15 cents/kwhr, which would provide the same amount of heat to the home as would oil at about 93 cents per gallon.
As in 2008, there is now clearly a high motivation to switch from oil to geothermal heat pumps, simultaneously cutting heating bills by about 75 percent -- a huge saving by any measure.
The message for Mainers is: Let's be as smart as the Swedes and use heat pumps to wean ourselves forever from foreign heating oil.
-- Special to the Press Herald
RHI MEANS BIOMASS HEATING SYSTEMS ALMOST FREE FOR BUSINESSES, FARMERS AND PUBLIC SECTOR
Following the announcement of the £860 million Renewable Heat Incentive (RHI) last week, businesses, farmers and the public sector could effectively benefit from free installation of biomass heating systems and free fuel for 20 years.
FOR IMMEDIATE RELEASE
PRLog (Press Release) – Mar 22, 2011 – Woodpecker Energy UK, a full service provider of domestic and commercial biomass boilers, has welcomed the announcement of the £860 million Renewable Heat Incentive (RHI) last week, saying that businesses, farmers and the public sector could effectively benefit from free installation of biomass heating systems and free fuel for 20 years.
The first scheme of its kind, the RHI has been designed to reduce the UK’s dependence on fossil fuels. Under the scheme, commercial, agricultural and civic and public sector buildings will be eligible to install renewable energy technologies, including biomass. The RHI provides a financial incentive, with payments being made for each kWh of renewable heat produced. Tariffs for using renewable energy sources will be paid for 20 years for Microgeneration Certification Scheme (MCS) accredited renewable heat systems commissioned after 29th July 2009.
The RHI holds real financial benefits and is a major opportunity for heating engineers and indeed commercial end users to upgrade their heating installations, particularly in off-grid locations. Woodpecker Energy has calculated the following potential scenario, in which a 100kW biomass boiler installation running at a 15% load could result in a surplus of £4,728 when RHI tariffs are taken into account:
Capital cost (estimate) £ 60,000
Interest (based on an interest rate of 10% over five years) £ 15,000
Fuel (based on 30 tonnes per annum) £120,000
Less payments from the Renewable Heat Incentive (RHI) - £199,728
Surplus on 100kW biomass heating installation over 20 years (not including maintenance) £ 4,728
The RHI is expected to lead to a significant take-up of biomass technology by businesses, farmers, and the public sector. Woodpecker Energy UK, a full service biomass heating specialist, has already achieved MCS accreditation for their boilers, and is an MCS accredited installer. The company is also training selected non-accredited installers to enable them to achieve MCS accreditation under sub-contract.
Woodpecker biomass boilers are designed to integrate with existing heating systems, are easily installed and low-maintenance, require minimal loading and have also been specified for use in several district heating systems. They are fuelled by wood pellets, which can be “blown” into the hopper via an air pump from a bulk tanker and burn very efficiently. Woodpecker boilers give a near gas or oil boiler experience - their controls are easy to understand, the boilers have roughly the same space requirements as an oil boiler, and the fuel (i.e. the wood pellets) can be fed into the boiler over several months, without manual refilling. When properly specified and installed, using locally produced fuel sources, biomass heating systems are truly carbon neutral and sustainable.
Tim Rook, Executive Chairman of Woodpecker Energy UK, said: “Biomass heating systems can play an important role when it comes to shifting away from fossil fuels, reduce our carbon emissions and encourage growth in the renewable energy sector. We are delighted that the Government has now announced the details of the Renewable Heat Incentive, and that the non-domestic sector is set to benefit from this year onwards. We are proud to say that Woodpecker Energy is the only MCS accredited UK installer and manufacturer of wood pellet boilers that is RHI ready.”
WORLD’S LARGEST PELLET PLANT EXPORTS FIRST SHIPMENT
Written by Argus Media
Mar. 22, 2011, Rotterdam, The Netherlands – Russian pulp and paper company Vyborgskaya Cellulose has exported its first shipment of wood pellets from its 900,000 tonne/year production plant in the western Russian city of Vyborg. Global forestry marketing firm Ekman, which is the exclusive sales agent for the plant, told Argus that a 4,000-tonne cargo left the port of Vyborg to be discharged at Helsingborg for buyer Oresund Kraft, a Swedish utility.
The new production facility, which is near the border with Finland, represents a substantial increase in global pellet production and will have an immediate effect on the market, with a steady flow of shipments scheduled to depart.
“We will follow this (shipment) with a lot more in quick succession,” Arnold Dale, Ekman vice-president of bioenergy, told Argus. “We will have at least one shipment departing every week from Vyborg, with another 4,000-tonne shipment next week and 6,000 tonnes the week after.”
The plant experienced a few minor problems with debarking and chipping during its start-up. Despite ice problems in the Baltic region adding to concerns, the firm kept delays to the plant's start-up to less than a month.
The new Vyborg plant will increase Russian pellet capacity to 3.1 million tonnes in 2011 from 840,000 tonnes in 2009.
ARK ALLOY COOKING UP A NEW LOCAL BUSINESS
Ken Leiviska, Times-Press | Posted: Wednesday, March 23, 2011 10:00 am |
Ark Alloy opened it's new shop in Reedsburg several weeks ago. Formely named Royall Manufacturing, Ark Alloy still produces the same Royall lines, including their up-and-coming wood pellet grills. Above, Ark Alloy President Matt Kouba stands next to several of the grills his company manufactures in their retail space at 325 S. Park St. Ken Leiviska / Times-Press
Downtown Reedsburg has attracted another business to fill a vacant location, thanks to some gentle nudging from a local committee and a company president's vision.
Matt Kouba, president of Ark Alloy, wanted for some time to change the image of his Elroy business, Royall Manufacturing. When the Reedsburg property, at 325 S. Park St. in the downtown district, opened up after B&H Lumber left last year, he packed up his Elroy factory and headed to Reedsburg.
"This building came up," he said. "I saw expansion possibilities."
The business molds steel into desired products that customers order on contract. It also produces its own line of Royall products made from steel.
The business will employ about 11 to 13 people in its first few months here, Kouba said, but could grow to as many as 17 or so in about a year. A core group of about six people will move from Elroy, but Kouba said he will be looking to hire help.
Reedsburg Industrial and Commercial Development Commission Chairman Don Lichte was instrumental in getting Kouba interested in coming into town.
"It's a nice industry to bring into Reedsburg," Lichte said.
He said it was impressive how quickly the city was able to fill the vacant lot downtown. He added that Ark Alloy should be a good business, especially considering the company's new retail aspect.
"We had never had retail before," Kouba said. "That makes it a whole new game."
Although the recession took a toll on the company, knocking employment down from 38 employees to 17 in the space of a year, Kouba said it was growing in other ways -- and adding retail could help advance the potential.
In addition to its established Royall brand of boilers and furnaces, a new line of equipment has emerged.
"My wife and I just found out we were pregnant," Kouba said. "I went to grill some steaks and I left it for a while and then it just took off. My wife saw flames 6 feet in the air."
The uneven cooking on a charcoal grill led Kouba to wonder if his company could produce a grill using forced-air unit technology. After creating some prototypes, he had his answer: a wood pellet grill.
"This grill is unbelievable," Kouba said. "The flavor of the food is without a doubt the No. 1 reason for owning one."
Although it takes longer to cook a steak, hamburger or the company's famous beer-can chicken than on a propane grill, he said the flavor and smells are unmatched. Unlike a charcoal grill, it's almost impossible to burn anything cooked on it, Kouba said.
And even though boilers, furnaces and fuel tanks might bring in a larger profit for Ark Alloy, Kouba said the potential for growth in the food industry is practically limitless.
"People love to eat," he said. "People love barbecuing. It's a pastime."
Kouba said he expects the popularity of Royall wood pellet grills to continue. Being able to sell grills and other products directly at his store in Reedsburg will provide a huge advantage, he said.
"The walk-in traffic," Kouba said. "Reedsburg has 10,000 people. We didn't have those numbers in Elroy."
The showroom is still under development, but Kouba demonstrated a few grills and furnaces already on the floor.
"On display will be the grills, the boilers and furnaces," he said. "That is our flagship."
In the future, Kouba said he hopes to have fuel tanks and skid-steer attachments along the fence bordering Railroad Street. If successful, expansion opportunities are possible across the street, he said.
New signs and renovations to the former lumber warehouse have been made and are still in progress. The warehouse will be converted into a factory in which all of Ark Alloy's products will be manufactured. Kouba said he hopes to have the plant fully operational by April 1.
PROPOSED ORDINANCE WOULD LIMIT USE OF WOOD FURNACES
5:05 AM, Mar. 27, 2011 |
LANCASTER -- A Lancaster City Council committee is drafting an ordinance that would restrict use of outdoor wood furnaces after complaints were made about the smoke produced by the devices.
A draft ordinance in the council's law committee would regulate the material that can be burned, the distance the furnace must maintain from property lines and chimney height. If the committee approves the ordinance, the council will vote on the regulation at one of its regular meetings.
Outdoor wood furnaces serve as a wood-fired boiler that pipes heat into a home.
"The devices we're dealing with have caused detrimental effects to businesses in the area," said Terre Vandervoort, the city's law director, at the meeting.
The city has received at least three complaints, two from businesses and one from a residence, about the smoke created by the machines, Vandervoort said.
One of those complaints came from Kumler Collision Inc., 2313 E. Main St., where smoke has been so dense at times that employees have called the fire department.
"It literally will burn your eyes," said Dean DeRolph, owner of the auto body shop. "It would make you sick."
At times, the smoke from a nearby outdoor wood furnace is so dense it halts work in the body shop, DeRolph said. Kumler's paint system sucks air from the outside, puts it through a filter and uses it to paint cars.
But when smoke rolls in from the outdoor wood furnace, the paint system cannot filter the dense particulates and smoke fills the paint chamber, he said.
"If the air is laying low, it's not going to let the smoke rise," said Roger Walker, who owns the outdoor wood furnace at 2257 E. Main St. "It's lighter than the atmosphere, so the smoke isn't going anywhere."
Walker said he installed the wood-burning furnace about three years ago to save on his gas bill, which ranged from $300 to $400 per month to heat his home in the winter and his swimming pool in the summer.
In the winter, Walker said he burns a combination of coal and wood, creating a heavier smoke. But, during the summer and on the weekends, he said he burns only wood.
"It says 'wood-burning stove,' but I think I've read where you can burn coal," he said. "It's not something you want to load nothing but coal. We mix wood in with the coal."
The council's current draft ordinance would not expressly outlaw burning coal. Painted, varnished and coated wood, garbage, plastic materials, rubber, newspaper, cardboard, paper with ink or dye products and other items outlined by manufacturers all would be prohibited.
To receive her vote, Melody Bobbit, D-1st Ward, said the ordinance will need to ban coal burning.
"If you don't have an ordinance that tells you what you can and can't do, then the individual can do whatever, and maybe they don't have to comply with you when you go out," said Bobbit, chairwoman of the law committee.
Legal burning material would be limited to natural wood, wood pellets, corn products, biomass pellets or other materials that are specifically outlined by manufacturers, according to the draft ordinance.
If adopted, new wood furnaces would have to be located at least 50 feet from the property line and at least 100 feet from a home that does not use the furnace. Chimneys for all wood furnaces will have to extend at least 2 feet higher than the tallest home within 300 feet of the furnace.
"If the ordinance was passed the way it reads now, most people in Lancaster would not be able to have outdoor wood furnaces," Bobbit said. "Their lots just aren't large enough."
The ordinance the committee is considering was adapted from one suggested by an industry group, Vandervoort said. The current draft does not outline potential penalties for violators.
"I think we need to look pretty seriously at some kind of measure to somehow regulate these things," said Ken Culver, council president. "We can't have two major businesses now in two years suffer continually."
In 2010, the Ohio Environmental Protection Agency considered rules that would regulate the type of fuel burned in an outdoor wood furnace, but those regulations never were adopted, said Heidi Griesmer, a spokeswoman for the agency.
The council considered banning the heaters in 2009, but that ordinance was withdrawn.
Hardy Heaters Ohio, based in Corning, an outdoor wood furnace retailer, has sold about 900 of the devices in Fairfield County, said Rick Stoughton, the company's owner. About 30 of those are in Lancaster, he said.
The problems that have arisen are not the fault of the machine or the owner, Stoughton said, but of the weather.
"You're going to have a problem one day out of the month, when the wind's blowing the wrong direction, but there's nothing you can about that. God's got say over that," he said.
WOOD PELLET PLANT IN TRIAL RUNS IN WARE COUNTY
It will produce for Europe, where product is used as a cleaner fuel
Posted: March 27, 2011 - 12:00am
By Mike Morrison
A factory touted as the world's largest wood pellet plant is set to start production this summer in Ware County.
Georgia Biomass, located at the county's Industrial Park five miles west of Waycross off U.S. 82 and U.S. 1, will use forest products from the area to produce some 750,000 tons of wood pellets a year.
Wood pellets are used as fuel - a cleaner-burning substitute for coal - primarily in Europe. Georgia Biomass is a subsidiary of RWE Innogy, one of the top five electricity and gas companies in Europe.
"It's going to create 80 jobs here, but that's not the big story," said Bob Hereford, interim director of the Okefenokee Area Development Authority. "The big story is everyone who is growing pine tress in South Georgia is going to have a market in which to sell them so they can be turned into wood pellets and shipped to Europe."
A ceremony opening the plant will be May 12, Hereford said.
Meanwhile, the plant's roof, piping and other equipment already extend well above the pines growing around it.
All the jobs have been filled and the plant already is producing pellets in a "pre-commissioning" stage, said Sam Kang, chief financial and operational officer for Georgia Biomass.
''Our actual go-online date will be some time in the second quarter of the year," Kang said. "We plan to begin shipping pellets at the end of the second quarter or the first part of the third."
Using wood pellets cuts down or eliminates certain pollutants emitted when coal is burned, including sulfur dioxide and nitrogen oxide. And unlike the fossil fuel coal, wood pellets are made from renewable resources.
Hereford said he can't nail down the exact economic impact the plant will have on the area, but it will be substantial.
"That's hard to calculate, but it's not going to be just the people who harvest pine trees who are going to benefit," he said. It's going to affect trucking companies and fuel companies and other local businesses, too. This is a big deal for us."
A big enough deal for Gov. Sonny Perdue to fly in for the ground-breaking a year ago.
Kang said the company already has had a tremendous impact on the local economy.
"During the construction phase, the hospitality industry benefited," he said. "It was almost impossible to find a hotel room or a rental in the area. All of those contractors and construction workers needed a place to stay. It really helped the restaurants, too, and there was a hardware store that was about to shut down, but we came in and really revived its business."
Ground was broken on the plant March 24, 2010. Situated in the heart of pine plantation country, it's ideally located to take advantage of the area's natural resources, Hereford said.
"We've got plenty of pine trees and plenty of water, so we're in the catbird seat," Hereford said.
Kang said the company will purchase 1? to 2 million tons of pulp wood a year, which will be processed and compressed into pellets. The pellets will be loaded onto railcars and hauled to the Port of Savannah to be shipped to the United Kingdom and the Netherlands, where RWE will use them in its power plants.
Wood pellets have been accepted in parts of Europe as "part of the solution to renewable energy," Kang said.
The opening of the plant will give Ware County status internationally that could lead to more good things, Hereford predicted.
"We're on the cutting edge of green energy," he said. "Once people see the success of this project, it will generate more interest in our area."
Read more at Jacksonville.com: http://jacksonville.com/news/georgia/2011-03-27/story/wood-pellet-plant-trial-runs-ware-county#ixzz1HoBkGJlr
LOGISTICS SUPPORT VITAL FOR US WOOD PELLETS EXPORTS TO EUROPE
By Kenneth Norris, Contributing Editor, Pulp & Paper International
NEW YORK, April 4, 2011 (RISI) - The southeastern US is betting on its combination of superior logistics and an overabundance of raw materials to support expanding wood pellet production facilities. Exports of wood pellets from the US to Europe are expected to grow significantly through 2020. To meet this demand, existing wood pellet production facilities in the US are increasing production to all-time highs. And new production facilities are being planned or are already in the process of construction.
Because margins remain slim for wood pellet production, the region's existing logistics infrastructure is proving vital. Many earlier pellet plants built close to wood sources but far from logistics centers went bankrupt during the recession. Now, new facilities are learning for those mistakes, understanding the importance of transport costs and taking advantage of existing infrastructure. This could prove especially important since a substantial volume of US wood pellet production is destined for European power plants.
The southeastern US is ideally situated to help meet European growing demand for wood pellets in the effort to meet the EU's goal of 20% renewable energy by 2020
Largest production facilities in the world
As EU countries ramp up biomass consumption to meet future goals for the reduction of carbon dioxide emissions, nearly all the existing pellet plants in the Southeast US are increasing production. High-profile wood pellet plants in Florida and Louisiana are some of the leading suppliers in the country. Green Circle Bioenergy in Cottondale, Florida, announced in August 2010 that they had achieved full production of 560,000 tons of wood pellets, the largest production facility in the world. Green Circle has also looked at opening a second wood pellet mill in the southeast.
Georgia is currently building an even larger production facility, expected to go online later in 2011. Georgia Biomass, a partnership of RWE Innogy of Germany and BMC of Sweden, is expected to supply 750,000 tons annually if production begins as expected in the third quarter of 2011. An existing wood pellets plant in the state, Fram Renewable Fuels, currently operates the largest wood pellet plants in Georgia and has targeted 200,000 tons of wood pellets for 2011, rising 40% from 2010 levels.
Dr. Leonhard Birnbaum, Member of the Executive Board of RWE AG, one of the companies that own Georgia Biomass, said in a January 2010 release that the Georgia plant was "a strategically important step towards safeguarding the supply basis for the constantly growing biomass market in Europe. This is because we will be unable to achieve targets for reducing CO2 emissions in Germany and Europe without biomass."
The Georgia Biomass plant, currently being completed in Waycross, Georgia, is projected to be the largest wood pellet facility in the world, overtaking Green Circle. When production begins in 2011, the approximately 750,000 tons of pellets per year will go almost exclusively to replace hard coal input in Europe, initially replacing up to 30% of coal consumption at power plants in the Netherlands. Additional wood pellets exports could go to support biomass facilities and power plants in Germany, Italy and the UK.
When choosing Georgia for the new facility, RWE was swayed by the pine growth rate in the southeast and the region's efforts in logistics and sustainable forestry. "The growth rate of the pine in the U.S. is extraordinary due to long vegetation periods, high temperatures and rainwater," said Thomas Wiedenhoefer, chief technology officer for Georgia Biomass in an interview with Site Selection Magazine. "Trees grow twice as fast as in northern Europe."
With 24 million acres of forests, Georgia is one of the states with the experience, infrastructure, and access to feedstock to be a leading producer of wood pellets
Importance of existing infrastructure
The Southeastern US can offer wood pellets at a competitive price mainly because of the existing infrastructure of ports, rail, and roads to deliver wood pellets to nearby deep-water ports. Along with the availability of sustained wood sources from local plantations and year-round harvesting, this combination provides important benefits over the northeastern U.S. and Canada. The region's pines, hardwoods, grasses and logging scraps, are enticing lures to many domestic and foreign companies investing in wood pellet production.
"Green Circle in Cottondale is brilliantly situated because they have a contract rail rate to run their freight down to Panama City for not more than $7 per ton," said James Baldwin Jr., Manager, Southern Sails Louisiana and Honorary Consul of Norway. "Their FOB costs are dirt cheap," says Baldwin, referring to Freight on Board or the costs of shipping the pellets from the production facility to an export port.
These southern states have a long history of wood chip, lumber, log, and pulp and paper exports, providing existing logistics support for new plants and facilities. In less than 6 years, the wood pellet industry in the southern U.S. has grown from nearly zero to over 2 million tons in 2010.
Georgia Biomass specifically chose its location close to the Port of Georgia in Savannah specifically to limit FOB costs. "The Savannah folks are going to try to dominate," says Baldwin, "again because of the FOB costs. If you make pellets in ‘Timbuktu' and have to spend $25 per ton to get to a load port, you're dead in the water when competing with Savannah or Cottondale."
"Pellet makers made the mistake of installing their pelletizers as close to the wood source as they could, rather than to a blue-water ocean port," Baldwin continues. "The trick in all of this is to get as close to a Mobile, New Orleans, or Savannah as possible with your pellet machines." Some companies have started the process of buying used pelletizers out of bankruptcy and installing them close to the sea.
Coupling European buyers with Southern US facilities has also turned wood pellet production into a year-round operation. As Baldwin explains, industrial buyers from Europe are using wood pellets primarily for energy sources, co-generating with coal to conform to clean air standards. This means that wood pellet production in no longer a seasonal activity, further supporting increased production through new and existing facilities.
Kenneth Norris is a US based contributing editor to PPI magazine and the RISI community website and can be contacted at: email@example.com