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BCAP Program Gains Momentum
The federal government’s Biomass Crop Assistance Program (BCAP) is expanding and being implemented across the country, as the list of cogeneration, wood fuel pellet, pulp and paper and other biomass-consuming operations certified by the U.S. Farm Service Agency (FSA) as eligible Biomass Conversion Facilities (BCF) now includes more than 80 locations.
California leads all states with 18 operations certified as BCFs under the program, followed by Maine, which has 12.
As part of the 2008 federal Farm Bill, the BCAP aims to support and develop biomass crop production for bioenergy by assisting agricultural and forestland owners and operators in the collection, harvesting, storage and transportation (CHST) of biomass with matching payments up to $45/ton for the sale and delivery of eligible material to BCF operations certified under the program.
Launched in summer 2009, the program is initially scheduled to last two years, and was funded with $25 million for this year.
The BCAP process begins with a facility qualifying as a certified BCF by using eligible biomass material to produce heat, power or advanced biofuels on-site, or creating bio-based energy products that may be sold or transferred to other operations.
First move is for a facility to apply with its county FSA office, a process that must ultimately be approved at the FSA national level. Requirements include the BCF must be an entirely separate legal entity from eligible material owners, conduct purchases using arms-length transactions, and purchase only on a dollar per dry ton weight equivalent basis. A qualifying BCF must also agree to provide the eligible material owner a signed scale ticket clearly indicating total tonnage delivered and total dry weight tonnage equivalent purchased, along with the BCF’s authorized representative signature.
Forestland owners and biomass producers such as loggers and others who harvest and haul biomass to certified BCFs must also apply and be approved for the program before any qualifying shipments or sales or matching payments can be made. Operators must provide documentation such as sales contracts, purchase commitments and letters of intent to sell or deliver to a qualified BCF.
Timber industry consultants Forest2Market recently followed up a newsletter report on BCAP with the suggestion for producers to ensure all supply contracts with BCFs specify a price per dry ton to avoid any confusion or errors in converting green ton prices to dry tons. In addition, contracts should specify a price per ton based on moisture level, and the moisture measuring method should be agreed upon by both parties.
American Loggers Council Executive Director Danny Dructor believes the BCAP program offers opportunity to develop alternative fuel resources, but hopes mills won’t use the matching payments as an excuse to reduce delivered biomass prices.
“If the program is allowed to work as designed, both the landowners and the loggers who are growing and producing the biomass could have the opportunity for a greater return on their investments in forest management and timber harvesting businesses by participating in the program,” Dructor says. “If the net result of the program is a severe reduction in delivered prices for the eligible biomass, then there will be no additional benefit to forest landowners or logging contractors.”
Extensive information about BCAP is available on-line through the U.S. Dept. of Agriculture’s FSA web site at: http://www.fsa.usda.gov.
Trends, Challenges Addressed In Study
Norbridge Inc. predicts biomass will grow quickly as a green fuel in the power generation industry. The firm has released a study of “trends and challenges” in the solid biomass market for power generation. Sixteen utilities/power generators operating in 27 states and 17 state agencies geographically diverse, both with and without RPS legislation and/or potential biomass supply, participated in the study. Specific issues covered included current biomass usage, plans for future biomass usage, preparation required for future biomass use, and issues with supply chain.
Currently, biomass is the fourth largest source of energy, following behind the more traditional coal, oil and natural gas. Biomass is considered carbon-neutral by the Intergovernmental Panel on Climate Change and is considered a green fuel. This green status is an important aspect of current and future biomass use, as 24 states and the District of Columbia have Renewable Energy Portfolio Standards (RPS). Five others have renewable energy goals, and 13 more are considering RPS legislation. Congress is also considering federal RPS. Similarly, cap-and-trade legislation is also an important influence.
The study found that although 75% of the utilities/power generators interviewed use renewable fuels, only 25% are using biomass. The reason appears to be simple—traditional fuels are more cost effective at this time.
However, 69% are interested in increasing biomass use. The study lists government mandates (such as RPS and court rulings), government incentives (such as tax credits and cap-and-trade), the scarcity of other renewable alternatives, and fuel diversification as driving forces. One interviewee commented, “Our state RPS mandates use of renewables. Because our local wind and solar resources are weak, we are now studying use of the most attractive renewable option for us, biomass.”
Utilities and power generators interested in increasing biomass usage are trying to figure out the logistics for potential biomass conversions at their power plants. Norbridge reports that while most plants will have capacity of less than 100 MW, some of those planned will have capacity of 300 MW or more. One utility even expects 5-10 million tons of biomass consumption annually by 2015.
According to Norbridge, “most utilities are in a ‘holding pattern’ until federal or state legislation clarifies economics and/or mandates to act.” Currently, the utilities and power generators interviewed are considering many potential sources of biomass. Most frequently considered are pelletized and non-pelletized woody biomass. During the 16 interviews, wood-based biomass was mentioned eight times. While the BTU content of pelletized fuel can be double that of low-energy-content biomass, this type of fuel can be much more expensive than its non-pelletized competitors. The study lists wood vs. agricultural sources, virgin vs. unmerchantable wood, re-growth time frame, and marginal vs. productive land as major sustainable forestry and land use issues that are factoring into decision-making.
Interested utilities and power generators face even more challenges, including potentially scarce supply of biomass and its high cost. Access to biomass supply was mentioned 10 times as an overall biomass challenge. One interviewee commented, “We are looking into biomass options now because we expect competition among utilities for biomass resources to heat up soon.”
Other challenges to biomass conversion are transportation and logistics. The study found that utilities and power generators are facing “significant impacts on transportation, handling and storage requirements.”
The study also interviewed 17 state agencies and found that more than 70% are very interested in biomass. There are various biomass initiatives being promoted by some states. State tax credits, subsidies and other assistance were mentioned 11 times as initiatives; supply and feasibility assessment were mentioned eight times; biomass task force was mentioned five times.
The study found that 18 biomass projects are either planned or under way. Fourteen of these projects are less than 60 MW, but three are in the 81-100 MW range and one is above 100 MW. Norbridge lists using reclaimed land from coal mines for energy crops, switching tobacco farms to energy crops, and using 20 million tons of biomass annually by 2025 as plans under consideration by various states.
Norbridge Inc. is an independent consulting firm, which works in transportation, logistics, energy, mining and pharmaceuticals. Visit norbridginc.com.
World’s Largest Pellet Plant Goes Under
Dixie Pellets, Selma, Ala., at one time touted as the world’s largest pellet mill, has ceased operation and filed for Chapter 11 bankruptcy protection, citing more than $100 million in debts.
The plant is reportedly 86% owned by a unit of Harbert Power Fund III, an affiliate of Birmingham’s Harbert Management Corp., whose companies invest in stocks, real estate, power plants and other assets
The plant, built adjacent the Alabama River, was designed to produce 520,000 metric tons per year of wood pellets, primarily for markets in Europe. The cost to build the facility was reported as $75 million. The plant early on reportedly experienced issues with the dry recycled fiber it brought in, causing production setbacks and mechanical issues. Quality issues allegedly caused a European customer to refuse a recent shipment.
The plant, which ran two green lines and a dry line, reported it was running 70% of capacity this spring. The plant started up in January 2008. Harbert purchased it in spring 2007. The original owner was New Gas Concepts.
Pacific BioEnergy Eyes Pellet Mill
Prince George-based Pacific BioEnergy purchased the Kitwanga Lumber Company, including a closed sawmill, and says it will not only restart the sawmill but also build a pellet plant in the region to use the wood waste from the mill.
Pacific BioEnergy points to large quantities of decadent hemlock suitable only for pellet production and the fact that there is not a large pulp industry to compete with for mill residues. The company is seeking financing and a location for the new pellet plant. The sawmill location isn’t suitable because it doesn’t have rail access, according to the company.
Record Turnout At PFI Conference
A record-breaking crowd of pellet fuel industry insiders met at the Sawgrass Marriott Golf Resort & Spa in Ponte Vedra Beach, Fla. for the Pellet Fuels Institute (PFI) Annual Conference on July 26-28.
“Our industry is in the exciting position of providing consumers with an efficient, renewable energy source, and this conference is key to bringing the industry together to discuss ways in which we can bring our products and our positive message to public,” says Jeff Thiessen, president of PFI.
This year’s conference included a 35% increase in exhibitor displays and a strong educational program that was attended by 325 industry professionals. Overall, 173 companies were represented.
Henry Spelter, USDA Forest Products Laboratory Economist, reviewed data on the status of the industry and Bill Holmberg of the American Council on Renewable Energy (ACORE) spoke to bolstering awareness of sustainable, renewable biomass.
Firm Sees Two-Thirds Of Projects Failing
Wood Bioenergy South from Forisk Consulting estimates actual expected new wood demand from bioenergy in the U.S. South at 13.1 million tons annually by 2020, implying that 68% of the 100 currently announced projects will fail to become fully operational. Visit foriskstore.com.
Pellet Plants Part Of Investment Fund
Governor Edward Rendell announced that Pennsylvania has approved nearly $18.4 million for 31 projects throughout the state as part of the $650 million Alternative Energy Investment Fund.
In Carbon County, Keystone Pellet Inc. will receive a $770,000 loan and $220,000 grant for new equipment and to construct a wood pellet manufacturing operation in Palmerton, Lower Towamensing Township. Keystone Pellet expects to manufacture 35,000 tons per year of hardwood pellets for use in home heating. The company anticipates creating 22 jobs. The capital invested will generate 35,000 tons of alternative fuel that will replace 4 million gallons of heating oil per year and prevent more than 33 million pounds of carbon dioxide emissions, according to the government. Keystone Pellet will invest $2.5 million in matching funds for the $4.9 million project.
In Fayette County, Tri State Biofuels LLC will receive a $716,500 loan and $360,000 grant to construct a factory to produce wood pellets on a 140 acre brownfield site in North Union Township. This facility will produce 65,000 to 78,000 tons of wood pellets per year. The funds will be used to purchase and install equipment and for site preparation. The total cost of the clean energy project is $2.5 million. Tri State Biofuels will provide $1.2 million in matching funds.
Biomass Plant Planned At Domtar Rothschild
We Energies plans to construct a $250 million 50 MW biomass-fueled power plant at Domtar Corp.’s Rothschild, Wis. paper mill. The project will be funded by We Energies.
Under Wisconsin law, utilities statewide must use renewable energy to meet 10% of the electricity needs of retail customers by the year 2015.
The project is expected to create 400 construction jobs and 150 permanent jobs in the surrounding community, including independent wood suppliers and haulers from northern and central Wisconsin who will secure waste wood for the project.
We Energies will file an application for a Certificate of Authority with the Public Service Commission of Wisconsin in early 2010, requesting approval for the biomass plant. If approved, the plant is expected to be completed in the first half of 2013. Visit we-energies.com.
Renewable Energy Project Digs In
Phoenix Renewable Energy has broken ground on a $100 million renewable energy project in Camden, Ark. The venture is located on 44 acres at Camden’s Energy and Renewable Resources Park on the former site of an International Paper plant.
The Phoenix project includes:
a 20.3 MW biomass Combined Heat and Power (CHP) plant that will produce excess electricity for the grid, steam for its second facility, and excess steam available for a another renewable energy company.
a wood pellet mill producing 180,000 tons of pellets annually to be shipped from the Port of Camden.
a wood processing yard with two cranes, a debarker, chipper and conveyors to the power plant and pellet mill.
Biofuels Projects Grants Announced
Auburn University of Auburn, Alabama, is the recipient of a grant worth up to $4.9 million from the U.S. Dept. of Energy. Auburn University will design and demonstrate a high productivity system to harvest, process and transport woody biomass from southern pine plantations. Specific project objectives are to develop design improvements in treelength harvesting machines for energy plantations, configure and assemble a high-productivity, lowest-cost harvesting and transportation system for biomass, and demonstrate at full industrial scale and document performance of the systems.
Show Stirs Interest, Exhibitors Signing Up
Providers of equipment, systems, supplies and services are increasingly showing interest in Timber & Biomass Expo Southeast and more than a dozen have booked space in the live event. Exhibitors have a choice of live, static or tent locations.
As of late September, exhibitors included Bandit, John Deere, Tigercat, Vermeer Southeast and Yancey Brothers (Cat), Cutting Systems, GCR Tire Centers, Rayco Mfg., Cleanfix Reversible Fans, Great American, Haglof, Hawkins & Rawlinson, Ritchie Brothers Auctioneers and Stihl. Hatton-Brown Publishers, sponsor of the exhibition, is the parent company of Wood Bioenergy and other magazines in the forest products industry.
The event will take place on a natural stand located nine miles south of Vidalia just west of the intersection of Georgia highway 15 and U.S. 1.
This is the first time the show name has included biomass in its title, but it is most fitting, given the rapidly emerging wood biomass markets in the region.
For more information, visit www.timberexpose.com or call Dianne Sullivan at 334-834-1170.
IP Considers Biomass Project At Riegelwood
International Paper is partnering with Sterling Planet Holdings Inc. to evaluate the feasibility of a combined heat and power (CHP) project at the company’s Riegelwood, NC mill. If it’s a go, Sterling Planet will build and own a boiler and turbine generator at the mill site that will produce electricity from biomass consistent with the North Carolina Renewable Energy and Energy Efficiency Portfolio Standard (REPS). IP will provide biomass and consume a portion of the steam generated by the process. Sterling Plant will sell the renewable electricity generated by the process to utilities in the region.
IP says it currently produces more than 70% of the power needed to run its U.S. mill system from carbon neutral bioenergy, and the company has reduced its purchased fossil fuel by about 35% since 2000.
The biomass would consist of wood materials such as branches, sawdust, bark and other wood fibers that are not typically used in pulp and paper production.
The project could be operational in 2013. In determining the project’s feasibility, forest sustainability and wood supply in the region will be critical elements.
Railroad Support Firm Buys Energy Group
B.H.I.T. Inc., a railroad support services company in Boca Raton Fla., has acquired The Wood Energy Group Inc. in St. Louis for $6.4 million.
Wood Energy reclaims railroad ties for railroads and then disposes of the ties to either energy cogeneration or landscape markets.
Castleberry Gets Nod From Magazine
Castleberry Logging, Inc. (CLI) of Castleberry, Ala., has been selected as the 2009 Logging Business of the Year by Timber Harvesting & Wood Fiber Operations, an affiliate magazine of Wood Bioenergy. The award was presented to members of the Castleberry family September 29 at the annual meeting of the American Loggers Council in Flagstaff, Ariz. Ezell Castleberry, CLI president, served as president of the group in 2008.
Pellet Plant Planned For MDF Site
New England Wood Pellet LLC (NEWP) is buying Norbord’s Deposit NY land and property and will commence construction of a wood pellet manufacturing facility.
Norbord’s intentions are to continue manufacturing medium density fiberboard at the facility until before the closing. NEWP will then begin significant site modifications and construction of a 100,000 ton per year pellet manufacturing plant once all state and local permits are secured.
NEWP owns manufacturing plants in Jaffrey NH, the site of its corporate headquarters, and in Schuyler NY. NEWP also owns and operates a rail-based packaging and reload facility in Palmer, Mass.
The new operation is expected to commence production in fourth quarter 2010 and reach production capacity in the first half of 2011. NEWP expects to use certain buildings, wood yard equipment and other elements of the existing Norbord facility.
Biomass Group Launches Campaign
Biomass Power Assn. (BPA), composed of biomass power companies, launched a $250,000 public relations, advocacy and advertising campaign to demonstrate the vital role that biomass power can play in reducing greenhouse gases and creating jobs across America, especially in rural communities. The campaign, which focuses on Washington, DC, highlights the economic and environmental benefits of biomass power, as well as the importance of extending tax incentives essential to maintaining existing biomass power facilities and creating jobs.
BPA supports a strong renewable electricity standard of 25% by the year 2020.
East Texas Coop Plans Biomass Plant
East Texas Electric Cooperative (ETEC) finalized a contract with North American Procurement Company (NAPCO) to develop a wood-fueled biomass plant in Woodville. The plant will produce 50 MW.
ETEC plans to build the biomass plant adjacent NAPCO’s operations in Woodville. ETEC has licensed NAPCO as the sole provider of wood chips and other wood materials to fuel the plant.
ETEC is made up of 10 not-for-profit electric distribution cooperatives.
British Government Okays Biomass Facility
The Tees Renewable Energy Plant, located at Teesport, and being developed by British company MGT Power Ltd., has received consent from the British Government. At 295 MW capacity, the plant will generate enough electricity to meet the needs of approximately 600,000 homes and will be one of the largest biomass plants to be built in the world, according to the participants.
The plant is expected to enter commercial operation in late 2012. The plant will use 2.4 m tonnes of wood chips annually. MGT Power was established in December 2007.
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