Written By: Rich Donnell
Leadership from Enviva and Drax—perhaps the two most visible wood pellet production and biomass power generation companies in the world—spoke of continued renewable wood energy growth during the fourth Wood Bioenergy Conference & Expo held April 5-6 at the Omni Hotel at CNN Center.
The event, hosted by Wood Bioenergy magazine and Georgia Research Institute, attracted 320 industry personnel representing industrial wood pellets, biomass power generation, in-woods chipping and biomass fiber procurement. They heard nearly 40 speakers and experienced 70 equipment and technology exhibits in the Grand Ballroom North.
Enviva President and CEO John Keppler expressed dismay with those who are less than enthusiastic about the wood pellet industry. He nearly shouted to the keynote session attendance that wood pellet demand worldwide increased 13% in 2015 to 27.6 million metric tons. “Thirteen percent year-on-year growth!” Keppler said. “How many industries in the world have grown 13% year-on-year?” He said wood pellets produce about 4% of all electricity in the United Kingdom, which is where much of U.S. wood pellet production is exported, and pointed to the substantial growth of biomass power generation, adding that wood biomass accounts for 44% of all renewable energy in the EU.
Keppler said the continued growth depends on three factors: sustainability, affordability and adaptability.
“Sustainability is and has to be the foundation of what we do,” he said. “People are buying what we’re selling because we’re delivering the tangible benefit of an improved greenhouse gas emissions profile on a life cycle basis.
“We have to continue to invest in the sound science, continue to inform the regulators and policymakers about the benefits of our product. We’re a new and young industry. In the absence of information that vacuum can get filled with misinformation. Sound science continues to confirm that biomass lowers the long-term greenhouse gas emissions profile of energy generation as compared to coal and other fossil fuels.”
Keppler cited the Khanna study published last year that reported the GHG intensity of pellet based electricity is 74 to 85% lower than coal. “We displace coal. That’ what we do today,” he said.
Keppler emphasized the importance of the wood pellet industry to forestland management and that many people are misinformed about the wood-to-energy impact on timberlands. “Today we’re 2.4% of the removals in the Southeast U.S.,” he said. “We’re byproducts of traditional harvesting practices. We are an important part of making sure that forests remain forests because that landowner decision to keep his land in timber or change it to development, to make it into a parking lot or golf course, those are economic decisions and the view about the long-term sustainability of a market like pellets is a very valuable component to a landowner decision to keep that land forested and replanted.”
Keppler added: “We’ve built a pretty remarkable platform in the landowner base in our all our communities and the data continues to show that when pellet plants come into operation, forest stocks have typically increased not decreased.”
Operating six wood pellet plants in the Southeast with another under construction, making it the largest wood pellet production company in the world, Enviva has immersed itself into auditing practices and certification programs, Keppler stated, because it’s the right thing to do and because overseas markets expect it. “We have to embrace that and we have to embrace that at the landowner level, too. Is this a challenge for our supply chain? Absolutely. A pain for our loggers? Absolutely. But we can’t accept anything less because our customers can’t accept anything less. Ultimately they are paying a premium for that certification and sustainability.”
Keppler said that in the long run it comes down to affordability, and added there is no reason to believe that by 2025 the pellet industry cannot find itself in a cost competitive position with fossil fuels and natural gas fired generation. “The gap just isn’t that far. We’ve got work to do. And the people in this room are a key part of doing that work. We can get there. I believe we can bend the curve on costs and in so doing also benefit demand.”
Keppler said closing the gap with fossil fuels will come with greater wood pellet production capacity and yield, and better designed and operated facilities that produce a denser pellet to enhance transportation and shipment value.
He also added that this industry should not be built around bilateral agreements between individual parties in the long-term as the industry and its pellet product transforms into a worldwide trading commodity.
Pete Madden
Pete Madden, president and CEO of Drax Biomass Inc., told the story of the UK-based Drax Group’s transition from a coal-fired power generation facility to a vertically-integrated biomass energy company; as it closes in on the conversion of its third coal-fired burner to 100% biomass fuel at the largest power plant in the UK, and as Drax Biomass has started up two wood pellet facilities in the Southeast U.S., which contribute to the power plant’s status as the largest individual consumer of pellets in the world.
Madden said the Drax UK facility was emitting more than 22 million MT/year of carbon dioxide in 2003 when it embarked on research and development with biomass. Ten years later it had converted its first coal unit to biomass, the second one followed in late 2014 and the third one is operating at 90% and should be totally converted later this year.
Drax has learned that wood pellets can provide power plant operators with a reliable alternative to coal; that biomass offers a flexible source of generation that can be dispatched to balance the intermittency of wind and solar; and that biomass has proven to be an affordable source of renewable electricity, Madden said. “Our research, and that of others, shows that…the ‘Whole System Cost’ for biomass is actually lower than that of onshore wind, offshore wind, or solar. It’s a good deal for taxpayers.”
The major Drax transition in the UK involved working with the rail infrastructure to secure rail paths to the plant and building specially designed railcars to carry 30% more raw material than conventional coal cars. Drax also worked closely with several UK ports to upgrade their facilities to handle biomass.
When all of those ports have completed their upgrades later this summer, Drax will have the ability to handle up to 12 million metric tons of pellets per year.
Working upstream, Drax formed Drax Biomass in 2012 in the U.S. and subsequently built two wood pellets plant in the Southeast, capable of supplying a combined 900,000 metric tons of pellets to the UK facility, while also building a port facility near Baton Rouge currently capable of handling 2 million metric tons of pellet per year.
Madden said Drax Power Station expects to increase its wood pellet demand to 7.5 million metric tons this year. As new sources of energy emerge in the Netherlands, Japan and several countries in Europe and Asia, by 2020 Drax is forecasting global demand of roughly 22 million metric tons of industrial pellets per year.
“This creates a growth opportunity for suppliers such as Drax Biomass,” Madden said. “The challenge is to make it through the next two years, as excess capacity is putting downward pressure on pellet prices, thereby straining those manufacturers that rely on spot market sales or don’t yet have fixed offtake agreements.”
Madden also addressed sustainable forestry and certification as core elements of the Drax Biomass culture. He said the Drax sustainability program is built around three objectives: documenting sustainable forest management practices; demonstrating and helping to maintain sustainable harvesting rates; and validating the contribution to Drax Power Station’s CO2 reductions.
Biomass Power
The conference also featured three keynote speakers from companies operating wood biomass fueled power generation facilities in North America. As he described in detail Ontario Power Generation’s conversion of its Atikokan Generating Station from coal fuel to white pellets to become the largest 100% biomass power generation station in North America, Brent Boyko, senior manager Business Development at Ontario Power Generation (OPG), said, “We’re proving biomass is not too good to be true.”
OPG removed coal from operations in compliance with Provincial regulations, Boyko said, and made Ontario the first jurisdiction in North America to fully eliminate coal as a source of electricity generation.
The Atikokan conversion project got under way in mid 2012 and was in service in July 2014. It required modifications to the boiler and new DCS, as well as new fuel handling and storage systems to keep pellets dry and to manage dust, as well as adding two 5,000 tonne wood pellet storage silos, and a new truck receiving and transfer house
Meanwhile at OPG’s Thunder Bay Generating Station, conversion of one of its units made it the first commercial “advanced” biomass power operation in the world, Boyko stated. Construction started in September 2014 and was completed in January 2015, when Thunder Bay GS became commercially available.
The plant receives thermally treated wood pellets, which he said repels water, creates less dust and can be handled much like coal using the same fuel handling systems, and has a higher energy density than white wood pellets.
The plant brought in test pellets from Norway in 2013 and monitored the impact of winter on pellet integrity in the storage pile. Meanwhile safety improvements and upgrades were implemented for dust management, to minimize static buildup, and for electrical equipment compliance. The project included modifications to the pulverizer and controls integration.
OPG has secured a fuel supply contract with Arbaflame of Norway. Thunder Bay GS can produce up to the unit’s full 163 MW capacity.
“Biomass can provide a renewable and dispatchable energy solution for coal plant repowering,” Boyko said, noting OPG’s unique position as having executed coal to biomass conversions using both white pellets and advanced wood pellets.
Norm Johnson, manager of operations and maintenance, gave an overview of Dominion Virginia Power’s instillation of biomass power generation into its 24,600 MW electric generation portfolio. DVP now operates biomass power stations at four locations with a combined 232 MW generation as well as an energy center that co-fires coal and biomass. Those operations will require an estimated 2.5 million tons of woody biomass this year, with two of the primary suppliers WestRock and Enviva. Johnson said “safety” and “quality” throughout the process are two of the primary and constant considerations for the operation.
Brad Worsley, president/CEO, spoke on the evolvement of Novo Biopower in Arizona, stemming from forest catastrophies that revealed the obvious need for forest treatment and biomass removal.
In addition to the benefits from the plant—employment, local power generation, baseload consistency versus intermittent—Worsley emphasized the positive impact of biomass power and biomass harvesting on forest health restoration such as controlled burning savings and augmentation of the watershed.
Worsley noted the project was not without its setbacks early on, when the original build was taken back by the bank during the recession in 2008, and the paper mill that conjoined the facility went into bankruptcy in 2012.
As for current operations, he cited numerous challenges such as how dependence on the national forest to supply consistent fuel has forced them to adapt their fuel sourcing strategy. He also addressed the ongoing Four Forest Restoration Initiative (4FRI), the largest restoration project in the Western U.S. and involving four national forests and 2.4 million acres of ponderosa forest in Arizona. “We have a biomass bottleneck,” Worsley said, referring to the abundance of available biomass on the forests and the challenges of processing it.
Points Of View
Looking at the big picture of renewable wood energy as part of an “advanced bio-economy,” Dr. Richard Vlosky, director of the Louisiana Forest Products Development Center at the LSU Agricultural Center, noted that in the U.S. (in 2014) renewable energy accounted for 10% of energy consumption, and wood fuel sources accounted for half of that.
In the U.S., major drivers of renewable energy development are federal R&D programs, grants and trusts as well as tax policies, driven by the goal to reduce foreign oil dependence, Vlosky said, and related to that are the mandates, policies, incentives and subsidies in the European Union.
He reviewed the types of woody biomass in the U.S., including genetically modified woody crops, and noted the various industrial processes that utilize them, such as cogeneration, gasification, pyrolysis and co-firing, but emphasized that pellets is where the action is. Citing Silvio and Pöyry research sources, Vlosky said global pellet demand could reach 54 million metric tons in 2025. He added that more than 75% of U.S. wood pellet production capacity is in the Southeast U.S. and that 73% of U.S. industry pellet production is shipped to the UK, followed by Belgium (10%) and Netherlands (7%).
Vlosky addressed ongoing positive developments such as CoolPlanet’s conversion of woody biomass into engineered biocarbons and the Red Rock Biofuels’ refinery in Oregon that is expected to deliver jet fuel to FedEx next year as part of a FedEx-Southwest Airlines venture.
Vlosky didn’t hesitate to review a few “failures” in biomass energy, such as the Southern Energy 100 MW wood-fired power plant in Nacogdoches Texas, which idled in 2012, or the KiOR biofuels facility in Mississippi, which filed for bankruptcy in 2014, or the recent German Pellets bankruptcy including new wood pellet plants in Texas and Louisiana.
Wood energy is encountering numerous challenges, Vlosky said, pointing to gas and oil prices, clarity in U.S. regulatory actions, U.S. long-term public and private investment, changes in UK renewable energy incentives and environmental issues. “The situation is evolving,” Vlosky said.
Carlton Owen, president and CEO of the U.S. Endowment for Forestry and Communities, spoke of his concerns for the fragmentation in the U.S. wood product industry by product lines.
“We have to learn that we all, whether we make pellets or paper, are bound together by the tree. If we do that, we have enormous potential. But if we don’t, all we’re doing is undermining the power and potential of the tree.”
Owen talked about checkoff programs, which are research and promotional endeavors funded by a respective industry while overseen by the USDA Agricultural Marketing Service. He cited checkoff success stories with meat, milk and most recently the softwood lumber industry. He said great effort was put into forming a checkoff program for the hardwood lumber industry, but that the industry was too splintered and refused to come together. “That checkoff is dead,” he said.
Owen said the Endowment is involved in a new effort for a checkoff program for domestic and export pellets and biomass power production. “We’re working right now with some of the people in this room,” Owen said. “We’re hoping that late this year we’ll be able to move that to actual consideration for a vote. If we can’t get our act together about what we all do and how we benefit society for jobs and the environmental opportunities, we’re not going to make it. We’re all in the crosshairs of folks who believe that the only good tree is a tree that’s never harvested. It’s our century if we choose to take it.”
Cormac O’Carroll, London-based director at Pöyry Management Consulting, spoke on the European pellet market. He cited a range of factors influencing its future, including the U.S. Clean Power Plan, slowing European demand, growing Asian demand, Dutch subsidies, emerging competition in Brazil and Russia, sustainability and carbon footprints.
O’Carroll said by 2020, according to Pöyry’s “central scenario,” European demand for industrial pellets is expected to be in the range of 18 million tonnes. If that scenario prevails then a significant chunk of the announced worldwide pellet mill investments (most of them located in the U.S.) would not be required to meet expected demand. However, it is clear that whatever scenario prevails, the U.S. will be the biggest supplier for European industrial pellet consumers.
His graphics showed U.S. production capacity could reach almost 20 million tonnes annually by 2020, if projects “under construction and planned” reach fruition, with the rest of world production at about 10 million tonnes, again including existing, under construction and planned. Pöyry’s “high scenario” puts European demand at about 27 million tonnes in 2020.
Technical Sessions
The Wood Bioenergy Conference included numerous technical sessions, one of which addressed advanced and second generation products and technologies.
President Jerry Ericsson spoke about Diacarbon Energy’s new combination white wood pellet and torrefaction facility in Merritt, BC that is beginning to produce “biocoal” for industrial co-fire applications. Ericsson reviewed the pilot plant commissioning in 2011, industrial scale biofuels testing in 2012, commissioning of the wood pellet plant in 2014 and the upcoming commissioning of the torrefaction part of the facility.
He said the advantages of biocoal include greater energy density than wood pellets, excellent grindability in coal mills, cheaper storage and transport than pellets. He said biocoal has an energy density of 21-25 gigajoules per tonne compared to 15-19 for wood pellets and 21-28 for coal. He also touched on briquetting as another way to densify torrefied wood. The facility operates a belt dryer, which is technology more common to Europe.
In addition to coal-fired utilities, Ericsson said cement production and CHP and district heating are viable markets for biocal. Cement production is the largest coal consumer in British Columbia, Ericsson said.
What are barriers to commercialization? Ericsson cited risk averse investors, cost of capital as hard to sustain given commodity margins, and competition with fossil fuels.
The Merritt facility has increased wood pellet capacity to 72,000 per year, and will have a biocoal production capacity of 35,000 tonnes to be delivered to a cement producer (Lafarge) and tested in utilities. He added that biocoal export opportunities are substantial.
“Torrefaction could transform wood pellet and solid biomass utilization,” Ericsson said. “Torrefaction is not a unicorn, and we’re also not out of the woods.”
Sylvain Bertrand, CEO of Airex Energie, described his company as a technology provider of biomass torrefaction systems and a producer of biocoal, while currently scaling up production capacity at its plant in Becancour, Quebec.
The heart of the operation is the company’s proprietary CarbonFX technology for biomass torrefaction which close-couples a pre-drying system, conditioning chamber, combustion chamber and cyclonic bed reactor. Feedstock includes chips and sawdust, and end products range from biocoal pellets, to white pellets, biochar and torrefied wood flour. The company is looking for partners in the U.S. It promotes its CarbonFX system for its simplicity and reduced footprint.
Ryan Davis, technical manager with Zilkha Biomass, spoke on second generation solid biofuels and steam explosion, an alternative technology to torrefaction, that Zilkha uses at its Black Pellets production facility in Selma, Ala. He said the steam explosion station includes a surge bin hopper, plug screw feeder and vertical continuous reactor.
Davis cited similar product advantages such as water resistance, outdoor storage, handles like coal, grindability and energy performance.
“Each tonne of black pellets will always hold 15% more energy than a tonne of white pellets,” Davis said. “Each ship will always hold 15% more tonnes of black pellets than of white pellets.”
Davis described the production process at the 275,000 tpy Selma plant, which has been shipping pellets under contract to Europe. A partnership with Valmet sets the stage for Zilkha Black Pellets to achieve commodity scale, Davis said. He also offered some detail on Zilkha’s Black Pellet Licensing Program.
Andrew Johnson, vice president of TSI, spoke on the current status and future challenges of torrefaction. TSI is one of the most experienced torrefaction technology providers.
“The debate about ‘can woody biomass be torrefied?’ is largely over,” Johnson said. “The next challenges and questions are: quality of product, scalability of equipment, robustness of process, and capital and operating cost.” He said it will take several years to “shake out.”
He said some attributes or properties of second generation pellets need better definition, such as what does “waterproof” mean. How much of a real problem is “leaching and odor”? He said the search is on for better alternative binders, noting torrefied pellets lack lignin in a thermoplastic form and thus need an added binder, most commonly starch.
Two speakers addressed EPA’s recent Clean Power Plan and its potential impact on the biomass industry. Carrie Annand, vice president, External Affairs, with Biomass Power Assn., reviewed EPA’s introduction of the CPP in June 2014. It called for major reductions in emissions from electric utility generating units (fossil fuel power), called for states to submit plans to meet GHG reduction targets set by EPA, and didn’t clarify the role of biomass in the plan.
The revised CPP announced in August 2015, she said, still left the roles of biomass unclear and left unanswered questions as to what feedstocks qualify, the factor of forest sustainability, the possibility of biomass co-firing, etc.
Annand said an ensuing meeting of the EPA Science Advisory Board emphasized that whole trees are not used for biomass and that biomass emissions are 60-70% better than coal. Various federal and state politicians have stepped up as strong supporters for biomass.
Wes Younger, managing consultant with Trinity Consultants, also spoke on biomass as part of EPA’s Clean Power Plan. He didn’t mince words. “The country’s long-term energy future is being set right now, and as it stands it does not include a significant role for bioenergy,” Younger said. “I want everyone here to know where their industry is being pinched and what they can do about it. Otherwise we will have an export-only bioenergy industry for the long term.”
Younger first noted that the implementation of the CPP was stayed (frozen) by the Supreme Court earlier this year pending hearings. He said an adverse administration entering power in 2017 could put the rule on EPA’s back burner.
CPP as proposed calls for the reduction of CO2 emissions from power facilities by 32% from 2005 levels by 2030. States are required to develop and implement their own plans. One of the ways to get there according to the plan is to shift energy production away from greenhouse gas emitting existing sources (coal, natural gas) to new zero-emitting renewables (wind, solar).
“Wait. Where’s bioenergy?” Younger asked. “CPP renewables does not include bioenergy,” he answered.
He pointed to the Clean Air Act as the roadblock, noting that due to the language of CAA being written when air pollution was a local/regional problem on short time scales, it does not allow EPA to give special treatment to biogenic CO2. “EPA’s hands are tied. CAA wasn’t set up to handle this kind of issue. For bioenergy to make any progress in the U.S. market, Congress will have to amend the Clean Air Act.”
Amending CAA is not just a critical need for bioenergy, it is an urgent need, Younger stated, adding, “This is a major change point for the power industry—a time to make master plans for the net 50-100 years.” But it will take a major lobbying effort with support of the broadest coalition to push Congress into amending CAA, which was last amended in 1990.
Always a key component of the conference is the air emissions control and dust control and safety sessions. Presenters represented Process Combustion, NESTEC, Fisher-Klosterman, Kice Industries, SonicAire, Firefly and GreCon.
