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Wood biomass pellets: US and UK blossoming

12/13/13 10:23 PM

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Wood biomass pellets: US and UK blossoming

Bioenergy Crops

US boiler manufacture and wood biomass pellets production are both
blossoming in United States as well as UK legislation moves forward to
increase co-firing. U.S. pellet producers who are selling into export

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markets in Europe are coming off an eventful year that’s seen demand
continue to grow—though not as quickly as some had hoped—and some
certainty gained concerning the UK market and its renewable energy

Mlgs VB

utilization goals going forward. Meanwhile, industrial pellet capacity in
the U.S. continues to zoom upward as new plants came on line last year,
while even newer plant projects were announced. Exports of wood pellets
from the U.S. to the European Union (EU) doubled from 2009-2011, and

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the EU took in an estimated 1.5 million tons of U.S. wood pellets in 2012,
according to Wood Resources International (WRI). Projections for the
future of EU pellet consumption vary, but all are pointing well upward,
from a rough consensus among third-party observers of 15-20 million

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Wood pellet consumption in the USA and Canada. Recent Tweets Pennsylvania rounded out the top three. Numbers from 2007 onwards are estimates. See full report of EIA h er ee. But also residential consumption in US is increasing Costs Environment Page 2 of 7 .S. Missouri was the second largest residential consumer of w ood biom ass ass. with approximately 1. RISI C4 grass CAM Cardoon UNITED KINGDOM: In 2012. Source: Seth Walker. in millionbiopower tonnes. According to the EIA. which accounted for 450 trillion Btu Tags of output. to projections by some European interest groups of 12/13/13 10:23 PM Photos from Flickr pellet usage in the 60-80 million ton range across the EU by that time. EIA releases consumption. price data for wood and waste biomass.Wood biomass pellets: US and UK blossoming tons annually by 2020. Source: (Melin.076 million cords. of residential consumption.3 trillion Btu consumed in 2011. with 1. Associate Bioenergy Economist. A cord is roughly equal to 128 cubic feet of stacked wood material. biofuels Biomass C3 grass Forecast of wood pellet exports from North America 2007-2017.166 million cords.5 trillion Btu. California’s consumption equated to approximately 33. Total U. a big impact on North America’s industrial http://bioenergycrops. or 23. with 1. residential consumption of wood equaled 22.5 million cords.665 million cords consumed. California led the nation with residential wood biomass pellets consumption in 2011. or 21.3 trillion Btu.

they need to concentrate on biomass (as they understood was the case before heavy lobbying by the Big Six energy companies. the DECC’s decision going forward favors the continued growth of biomass co-firing and biomass conversion at existing UK coal-burning power plants. The non-legislative cap. The Government may be convinced that there will be an equal split between technologies. is set at 400 MW for new. America. let alone the UK. plus £5/tonne at either end for the handling at the dock. As part of the decision. and because of inherently better energy utilization ratios. which generally means pellets. dedicated biomass power plants. persuaded them otherwise). particularly of scale. It is likely that highgrade pellets can be produced in these countries for around £110120/tonne in 2012 money. combined heat and power generating facilities (CHP) are exempt from the UK’s dedicated biomass generating cap once they receive certification under the DECC’s CHP Quality Assurance Program. energy and feedstock costs. Russia and Brazil enjoys some advantages. That puts the cost of importing these pellets above the cost of using British pellets in most circumstances at the http://bioenergycrops. who sell electricity and don’t sell biomass. if they genuinely want to deliver on renewable Page 3 of 7 .Wood biomass pellets: US and UK blossoming 12/13/13 10:23 PM UNITED KINGDOM: In 2012. and the supplier has to distribute the pellets to the final user. And the scale of the resource and limited local demand suggests that they can supply tens of millions of tonnes sustainably. The businesses involved have to cover their overheads. Germany and Sweden. dedicated biomass generating capacity that will be supported under the country’s Renewable Obligation Certificate (ROC) system. the size of boat involved will cost over £20/tonne for the shipping. DECC officials believe there will be more progress made in the process of taking coal-fired generating capacity off-line (or converting it). But at the moment. Production in countries like Canada. a big impact on North America’s industrial pellet industry came from the United Kingdom’s Dept. or even a skew in favour of heat pumps. And boatloads of pellets have to be put into storage while the stock is gradually run down. which covers the next five years. adding another £10-20/tonne of cost. of Energy and Climate Change (DECC). Given the constraints on the native resource in the UK. they will need to rely heavily on imported biomass. which published a “consultation” decision on the direction of British renewable energy policy for the near future. even over Austria. but history says that. the pellet-heating market in the UK is too small to ship the pellets efficiently. so they have significant additional costs getting the pellets to the port. ethanol fertilizers grasslands Logistics Marginal lands news pellets perennials Short rotation Coppice Wastes dedicated biomass generating capacity. while placing a cap on generating capacity coming on line for new. Most of the pellet plants in these countries aren’t near the sea.By establishing the 400 MW cap on new. while at the same time upholding ROC value. In essence. If the market can only absorb a few thousand tonnes at a time.

Fortunately.000 tonnes of wood pellets per year.5% of the UK’s electricity). and market factors (2012) Analysis of U.Wood biomass pellets: US and UK blossoming 12/13/13 10:23 PM moment.000 homes. given the relative efficiencies and carbon savings). The one threat to this scenario is if governments subsidise biomass power generation by so much that they start sucking up all the excess pellet production. policies. so if governments place the interests of the economy and environment ahead of the interests of big business. For example. residential wood energy consumption: 1967–2009 (2012) Evaluation of wood pellet application for residential heating in British Columbia based on a streamlined life cycle analysis (2013) Technical and economic assessment for the production of torrefied ligno-cellulosic biomass pellets in the US (2013) Economic impact of wood pellet co-firing in South and West Alabama http://bioenergycrops. Som e g ood ar ticles and publications on US and UK pellet m ar k ets can be found h er e: UN ITED STATES Developments in international solid biofuel trade—An analysis of volumes. imports should become competitive and import volumes should expand rapidly to supply the excess demand. But as the delivered cost of British pellets rises above £200/tonne. even as demand exceeds native production. We need to keep the pressure on them to remind them where their priorities ought to lie. so far. That is enough to heat around one-third of the off-grid residential properties in the UK.000. The amount of the energy in the pellets that would be wasted up the chimney (15 TWh) would be enough to heat around 1.S. if half (1.000. they will hopefully maintain the differential that ensures that wood pellets are worth more for heat or CHP than for power. and the size of the market enables the use of larger boats (which could save £10/tonne of shipping costs).5 GW) of Drax power station were converted to biomass (as is being considered) and run at a load factor of 68% (producing around 9 TWh or 2. It is in no one’s interest to encourage inefficient use of the biomass resource. biomass generation has not been subsidised sufficiently to enable it to pay more for pellets than biomass heat (quite Page 4 of 7 . That is why we anticipate that imports will prevent prices escalating beyond around £200-220/tonne (in 2012 money). it alone would need the equivalent of around 5.