News | October 2018

Trying to keep up with all the latest news in the biomass industry can be a daunting task, however, with the help of Wood Bioenergy magazine and our ever-updating blog site—staying up-to-date has been made significantly easier.

For the latest in news, visit or blog site.

Pinnacle Pursues More Production

With new long-term supply agreements in place, Pinnacle Renewable Energy reports it is now focused on increasing its industrial wood pellet production capacity. The company expects to increase capacity at its existing facilities through its continuous improvement programs. Pinnacle also now expects to expand its production capacity by advancing development of greenfield and brownfield production facilities. The company may also partially fulfill new contracted volumes through the acquisition of existing production facilities in North America. 

On June 29, Pinnacle’s Entwistle, Alberta production facility entered into commercial production. The company will gradually ramp-up production at Entwistle to ensure all machine centers are performing optimally and expects to achieve full run-rate production of 400,000 metric tons per year in the second quarter of 2019.

Pinnacle continues to advance construction of the new Smithers, BC production facility and expects initial pellet production at Smithers to commence in the fourth quarter of 2018. Full run-rate production of 125,000 MTPY is anticipated in the third quarter of 2019.

Pinnacle signed new long-term contracts totaling $2.2 billion with new customers in Asia during Q2 2018, including its first long-term contract in South Korea, representing the first long-term industrial wood pellet contract to ever be signed in that market. With the inclusion of these new contracts, which have longer terms than Pinnacle’s existing contracts and extend past 2030, the weighted average remaining life of the company’s portfolio of off-take contracts has been extended from seven years to more than nine years.  

In South Korea, the Renewable Portfolio Standard (RPS) policy plans to increase the share of energy generated from renewable sources to 10% by 2023. The RPS mandates power producers that have power generating facilities with installed capacities more than 500 MW to produce a minimum proportion of their power using new and renewable energy sources.

Pinnacle secured four long-term, take-or-pay contracts with new customers in Japan, including Hanwa Co. Ltd., Sumitomo Corp. and Toyota Tsusho Corp.; and entered into a long-term, take-or-pay contract with CGN Daesan Power Corp., representing its first long-term supply agreement in the South Korean market.

Enviva Remains Bully On Wood Energy

Enviva reported three new 15-year take-or-pay off-take contracts with Japanese customers totaling 700,000 MTPY commencing in 2021 and 2022, and a 650,000 MTPY, five-year take-or-pay contract extension with Drax commencing in 2022.

“(Enviva now has) long-term, contracted volumes of almost 1.5 million tons per year with high credit quality Japanese counterparties and continue to progress additional off-take contracts supplying the fast-growing Asian market,” says John Keppler, Chairman and CEO of Enviva. “Long-term off-take contracts are expected to underpin substantial investment in new plant and port capacity that, together with the robust operational and production capabilities we demonstrated again this quarter, is the foundation for long-term cash flow growth.”

The company states its current production capacity is matched with a portfolio of firm off-take contracts that has a weighted-average remaining term of 8.5 years and a $6.3 billion product sales backlog as of August 1, 2018. “The strong growth expected in global demand for industrial-grade wood pellets is de­mon­strated by several recent significant events in the established European market and the rapidly developing Asian market,” Enviva reports:

The conversion of the fourth unit is expected to be completed over the summer, returning to service in the second half of 2018. The cost of conversion is significantly below the level of previous conversions, at around £30 million.

The company was created in response to widespread and devastating wildfires in the Western U.S. caused by forest debris and the rising demand for drop-in, cost competitive renewable jet and diesel fuels.

• In June, the European Commission, the European Council, and the European Parliament announced the agreement of key policy terms of the Renewable Energy Directive II framework, including a binding EU-wide target share for renewables of 32% in the energy mix by 2030, up from the target of 20% by 2020. The agreement also reconfirmed that energy generated from biomass counts towards the renewable energy target and is eligible for support mechanisms.

• Germany recently established a highly anticipated official task force, the Special Commission on Growth, Structural Economic Change and Employment, which will determine the approach for the phase out of coal-fired generation. Germany needs to stop using coal to generate electricity in order to reach its goal of becoming greenhouse gas-neutral by mid-century.

• In July, the Japanese government approved the country’s fifth Strategic Energy Plan prepared by the Ministry of Economy, Trade, and Industry. In addition to confirming renewable energy’s target share of 22 to 24% in Japan’s 2030 energy mix, the plan designated renewables, including biomass, as a main source of power generation, indicating a major shift in government policy that recognizes renewable energy’s role as a baseload power source.

• In the UK, the National Infrastructure Commission, in its recently published National Infrastructure Assessment, called for renewable generation to make up 50% of the country’s electricity systems by 2030 and recommended limited government support for nuclear generation, which currently makes up approximately 18% of total electricity generated.

Meanwhile Enviva continues to construct the 600,000 MTPY production plant in Hamlet, NC, which is expected to be operational in the first half of 2019.

In the UK there has been an 84% reduction in coal-fired power generation in the last five years as low carbon generation has increased.

Enviva continues to invest capital in the recently purchased wood pellet production plant in Greenwood, SC and expects to increase production capacity to 600,000 MTPY.

Enviva continues to analyze the development of a deep-water marine terminal in Pascagoula, Miss. and a wood pellet production plant in Lucedale, Miss. Enviva expects to make a final investment decision on these facilities in late 2018 or early 2019. In addition, Enviva continues to consider building wood pellet production plants in Epes, Ala. and Taylorsville, Miss.

Enviva also reports that nearly 3,000 acres of wetlands, critical bottomland hardwood forests, and Waccamaw River frontage have been acquired by the North Carolina Coastal Land Trust. The project was made possible thanks to the support of a dozen partnering organizations, including the Enviva Forest Conservation Fund.

Northeast Loggers Step Up For Biomass

Forest Resources Assn. NE Region Coordinator Eric Kingsley reports in his blog that in July about 200 loggers, truckers and other participants in New Hampshire’s forest industry gathered in a logger’s garage. The governor had just vetoed legislation that would have supported six stand-alone biomass power plants, threatening the market for about 1.7 million tons of wood annually.

Kinglsey notes that biomass plants have long been an important market for low-grade wood in the state. In the 1980s, eight wood-fired power plants began operations; six of them remain. In 2005, the state’s largest utility converted a coal plant to biomass, and in 2013 a new biomass power plant opened at the site of a closed pulp mill. During this same period, the state lost two pulp mills, and some pulp mills in nearby Maine reduced production or closed.

“As regional markets for wood have changed, biomass has become an increasingly important outlet for landowners, loggers and mills operating in New Hampshire,” Kingsley says. In 2004, biomass was 23% of the state’s harvest and pulpwood was 39%. In 2016 (the last year with full data available), those figures had basically reversed—41% of the state’s harvest volume was biomass, and only 24% was pulpwood.

Billed as a rally for the forest products industry, this was really a class in grassroots activism, Kingsley says of the gathering. Organized by the NH Timberland Owners Assn., the evening featured a number of speakers on the importance of contacting legislators, developing broad public awareness, and making the industry’s voice heard.

• A simple and concise summary of the legislation was developed, focusing on strengths of the biomass plants—energy diversity, the purchase of local fuel, and jobs created in the supply chain.

• Petitions were circulated for loggers, mills and others to use to gather signatures in support of the veto override. The NHTOA will be gathering and presenting these to legislators in advance of the veto override vote.

• A map showing the location of biomass plants, suppliers, sawmills and others that are part of the supply chain has been widely circulated. This map is important because it visually demonstrates that biomass is a statewide issue, and not confined to one area of New Hampshire.

• A series of rallies at biomass plants has been organized, to be capped by a large rally in front of the statehouse in the days before a veto override vote is taken.

• A letter-to-the-editor campaign has been initiated, targeting daily and weekly papers across the state.

• Members of the state’s forest industry and legislative supporters have visited newspaper editorial boards in order to highlight the effort.

“It is far too early to tell if the veto override will be successful,” Kingsley says. “Getting two-thirds support in both the NH House and Senate is tough, particularly when the governor is working against the bills.”

Astec Alters Wood Pellet Business

Astec Industries reports that it is exiting its obligations in the new Highland Pellets plant that is operating in Pine Bluff, Ark. Astec and Highland decided it was in both parties’ best interest, as the decision was driven by unresolved issues that have inhibited the plant’s ability to meet contractual provisions by the date required by Astec’s sales contract with Highland.   

Under the terms of the agreement to exit the contract, which was effective on July 20, 2018, Astec agreed to pay $68 million in cash and forgive $7 million in receivables. In exchange, Highland agreed to release Astec from all contractual obligations related to the Arkansas wood pellet plant. Astec remains available for onsite and telephonic technical advice.

In connection with the agreement to exit the contract with Highland, and in consideration of the historical impact of the wood pellet business on Astec’s overall results, Astec has re-defined its wood pellet plant strategy to limit its participation in the wood pellet plant market to offering proven technology for sale as an equipment supplier, and not as an Engineer, Procure, Construct (EPC) organization or a participating lender on wood pellet plant projects. Astec will continue to offer for sale aftermarket parts and service support for wood pellet plants.

The Highland plant shipped its first train load of pellets in April 2017. Its announced production capacity is 600,000 metric tons annually when operating four lines, each with Astec’s pre-dryer/dryer technology.

Drax Converts Fourth Power Unit To Biomass

Drax has switched on its fourth biomass generating unit—taking the power station at Selby, North Yorkshire, UK a step closer to achieving its coal-free ambitions.

Work got under way on the conversion as part of a planned maintenance program in June, with Drax’s team of engineers completing the work required, on schedule, in just over two months.

Having already upgraded three of its coal units to use biomass, Drax is already the biggest decarbonization project in Europe. The conversion of a fourth unit means it is on course to be off coal before the government’s 2025 deadline.

To convert the unit the project team has re-used some redundant infrastructure left from when the company was first co-firing biomass with coal on a large scale, around eight years ago.

A trial last year confirmed that by modifying the old co-firing fuel transportation system, compressed wood pellets can be delivered in the quantities required to fully convert the fourth generating unit.

Andy Koss, Drax Power CEO, comments, “It is testament to the engineering expertise, skill and ingenuity we have at Drax. The team has developed some very innovative solutions for this upgrade, using all the knowledge we’ve gained throughout the work we have done so far to transform the business using sustainable biomass.”

The cost of conversion of the fourth generating unit is significantly below the level of previous conversions, at around £30 million.

Drax has already invested around £700 million in upgrading the first three units and associated supply chain infrastructure to use sustainable biomass instead of coal.

Drax will now continue its work to replace its remaining two coal units with gas-fired power generating units. The Combined Cycle Gas Turbines it is looking to develop could deliver up to 3.6 GW of capacity, as well as up to 200 MW of battery storage.

Drax’s plans for the gas project have been submitted to the Planning Inspectorate, which accepted the application for examination. The proposals will now be examined by the Planning Inspectorate and then considered by the Secretary of State for Business Energy and Industrial Strategy with a decision expected in 2019.

In the UK there has been an 84% reduction in coal-fired power generation in the last five years as low carbon generation has increased.

Velocys Biorefinery Project Moves Ahead

Velocys plc (VLS.L), a renewable fuels company, reports that the U.S. Dept. of Agriculture (USDA) has issued a Finding of No Significant Impact (FONSI) on the environmental assessment report for Velocys’ planned Bayou Fuels biorefinery in Natchez, Miss. With the FONSI process completed, Velocys will now focus on the next steps in the project’s development, including securing the state-level permits that will be required to construct and operate the biorefinery.

The 160-page environmental assessment report details the impact of the proposed facility across 15 potential aspects including: land use, water resources, air quality, wildlife, visual impact, noise, transport and public and occupational health. In each case, the report concludes the plant would have “none”, “none to minor,” or “minor” impacts during construction and operation.

The FONSI was issued as part of Velocys’ ongoing development of a 100 acre site in Natchez that the company secured in October 2017. The site will be home to a biorefinery that will use Velocys’ technology to produce low-carbon transportation fuels from the wood wastes of lumber operations and tree plantations—enough renewable fuel to meet the demands of running 40,000 diesel and gasoline trucks.

David Pummell, CEO of Velocys, comments, “This is a significant step in the permitting of the Bayou Fuels biorefinery as well as an important milestone for the overall development of the project. The environmental assessment provides independent confirmation that the project will not give rise to any significant environmental impacts and reflects our commitment to responsible and safe project development.”

Public Hears Details On Proposed Plant

Northern Energy Solutions Ltd. (NES) invited the public to attend an open house at the Beaverbrook Kin Centre, Miramichi, New Brunswick in early October. The company provided information on a proposed wood pellet plant, explained the requirements of the application for approval, introduced the NES project team, and answered questions. 

The proposed plant would produce up to 275,000 tonnes of pellets per year, exported to Europe, and be located at the former UPM pulp and paper mill site on Curtis Rd. The plant would employ 60.

NES reports it is close to signing an outtake deal on its pellets production.

Skeena Bioenergy Taking Shape

Skeena Bionergy is the name of the new $20 million pellet plant (and company) being built next to hemlock lumber producer Skeena Sawmills in Terrace BC. Construction started in June and is expected to be completed in December 2018, with commissioning in January 2019.

Skeena BioEnergy is being built in an existing building that used to house a veneer company. Skeena Sawmills owns the site and the building. It operates a large saw­milling operation in Terrace and its need for an adjacent pellet plant was clear—an in-house market for its sawdust and hog fuel, especially as the sawmill continues to invest in increased production. Currently the bark component is landfilled and the whitewood is sold to a distant pellet manufacturer.

The company is looking at Asian markets, which is also a focus of its lumber business. Upon completion, Skeena BioEnergy will employ 12–15 and is expected to produce 75,000 tonnes of pellets a year.

Prodesa is Skeena BioEnergy’s chosen production equipment supplier, including three pelletizers and two infeed lines. The plant will use a low temp belt dryer. The VETS Group is supplying the dust filtration system, which also includes fire protection and explosion control. SonicAire is supplying a dust control system for inside the plant. 

Skeena Sawmills and Skeena BioEnergy are owned by Roc Holdings.

Unilever Installs Biomass Boiler

South Africa’s largest fast-moving consumer goods manufacturer, Unilever, unveiled a R50-million biomass boiler at its Maydon Wharf Factory in Durban.

“Our new biomass boiler at Maydon Wharf is illustrative of the seriousness of our commitment to sustainable living,” comments Unilever South Africa Executive Vice President Luc-Olivier Marquet. “We have previously unveiled our Unilever Sustainable Living Plan (USLP), which commits to reducing our environmental impact by half by 2020. This can only be achieved by putting sustainability at the core of our strategy. An important part of achieving these goals is to manage our electricity and water use, and to ensure that no non-hazardous waste goes to landfill. The biomass boiler is our latest step on this journey.”

The boiler is fueled by wood pallets, waste wood and off-cuts from local furniture and door manufacturers. The boiler consumes on average 940 tonnes of biomass a month—“roughly the weight of 375 medium-size African elephants!”

The boiler cost R50m to install, and the company estimates it will provide a saving per annum of R17m per year. This figure factors in fuel savings, and will reduce the facility’s carbon footprint. The boiler will lead to a reduction of over 30% in CO2 emissions and is projected to save 14,000 tons of CO2 every year.

The company is actively looking at the re-use of condensate, heat, water waste and flash steam in its factories, as well as new soap-making technologies that use less energy in production. Further, the company is examining the feasibility of a new dryer vacuum and solar power.

^ Top