Biomass is A Growing Business
March 29, 2012
By David Manly
Bioenergy Conference & Expo gathers experts
At the Bioenergy Conference & Expo held at the end of February in Georgia, a host of industry and business professionals met to discuss the growing interest and potential of biomass.
|Dr. Venkata Penmetsa from the college of forest resources at Mississippi State University spoke about water-resistant binders for torrefaction.
At the morning keynote session on the first day, a number of individuals presented on issues facing the bioenergy business: international markets, growth potential, manufacturing and job growth.
The first speaker, John Keppler, chairman and CEO of Enviva LP, focused on how best to expand the biomass industry onto the international stage.
According to Keppler, the best way is to focus on the main tenets of any manufacturing business – sustainability, safety, reliability, policy and risk management
“We have a great story to tell,” he said, “but it all starts on the ground, with the guys in the boots planting trees.”
The second session was presented by Jim Imbler, president and CEO of ZeaChem Inc., on the similarities between wood energy and oil.
His company is working on ways to maximize the biomass harvested from trees, as well as decreasing the amount of storage time in silos by harvesting and putting the biomass to use as soon as possible. This is being accomplished, he said, by investigating alternative sources of biomass, such as eucalyptus and poplar, which have a shorter growing cycle than traditional timber.
In the third address, Steven Walker, president and CEO of New England Wood Pellet, discussed the hard realities of pellet manufacturing. He stated that safety is paramount, and should be one of the biggest expenses.
Walker stated that more than 50% of pellet plants in the northeastern United States are gone due to the huge prevalence of bad information. There is always a learning curve associated with a successful business, he said, but the key is to benefit from it and move forward.
The final keynote of that morning addressed the commitment to biomass within the state of Georgia, which has among the highest volumes of biomass in the United States. Jill Stuckey, director of the Georgia Center of Innovation for Energy, said that the state has more than $1 billion worth of announced projects in the pipeline.
New torrefaction technology
One regular session of note that morning focused on recent research surrounding ways to make torrefied pellets that are as resistant to moisture as possible, while still maintaining their firm structure, energy capacity and price.
Dr. Venkata Penmetsa from the college of forest resources at Mississippi State University spoke about developing a water-repellent binder that will increase the amount of product that can be compressed into a pellet or puck, while still allowing it to maintain its impressive qualities and not increasing the price too drastically.
“What we have found is that the cost of the binder is only four to five dollars per tonne of pellets,” said Penmetsa. “And you can use pretty much anything to make a pellet, such as dust or prairie grass, since the binders are continuously improving.”
Using a 2% solution of binder to wood, the finished product could be compressed up to 764 psi (was torrefied at only 300 degrees), he said. As well, after being submerged for 14 days, it retained its shape and lost only 30% of its compressibility.
Most impressively, by adding the 2% binder solution, the overall BTU released from the torrefied pellets increased by approximately 5% (from 18 to 19 MJ).
The first presenter of the afternoon keynotes, Peter Vyncke, CEO of Vyncke Energietechniek, discussed viewing biomass energy production from a global perspective. Using his 100-year-old European company’s business plan as an example, he stated that they have plenty to teach those countries that are just starting out.
“You can learn from us,” he said, “ as we’ve been in business for 100 years. So, a successful biomass business can be done!”
The second keynote was by the president of FutureMetrics, Dr. William Strauss, who discussed the continuing emissions debate between burning wood and coal. The problem is that the studies that have stated that wood releases more CO2 emissions than coal possessed a few significant errors, he said.
“The combustion of wood from a sustainably managed forest is carbon neutral,” said Strauss. “You must look at the whole growth cycle, not simply post-harvest.”
He added that not all harvesting processes leave the area barren of carbon, as residuals such as stumps and slash will help recoup some, but not all, of the carbon lost.
The final keynote of the afternoon was a look at the future of biomass in North America by Seth Walker, the associate bioenergy economist with RISI, which used statistical models to determine the approximate state of the bioenergy and biofuel markets in 2016.
Through looking at announcements from companies, they predicted that over 200,000 pellet stoves could be used in the United States by 2016, with a consumption of 10 million pellets. They also predicted that cellulosic biofuels would be commercialized within the next five years, as, once proven effective, the production will skyrocket.
“The entire industry has the ability to double in size [of products consumed] in the next five years,” concluded Walker.
However, he warned that there are a number of hurdles to get over, such as the NIMBY (Not In My Backyard) movement, as well as the difficulty obtaining financing and power purchase agreements.
Meeting the demand
During the second day of the conference, there were a series of sessions exploring the difficulties associated with obtaining, utilizing and optimizing resources in a biomass facility.
Robert Synk, the manager of products with The Parton Group, discussed the complicated nature of how to maximize biopower availability to meet the ever-increasing demand. His solution was to expand the definition of what “biomass” is to include timberwood resources that are left underutilized from the solid wood manufacturing and pulp and paper industries.
“By expanding the biomass definition, there will be four times more biomass available if it includes whole-tree chips and underutilized pulpwood,” said Synk.
Following that, Richard Vlosky discussed a recent survey that he and his colleagues at the Forest Sector Business Development program at Louisiana State University completed to determine the possibility of forest landowners contributing to the biomass industry.
The survey, which contacted small acreage forest landowners, discovered that 90% plan to harvest their trees in the near future, and that 62% were open to the idea of using biomass for energy. However, the respondents had three prerequisites: that it not upset current markets, that a profit could be made and that it does not harm the environment (soil, water and wildlife).
“The money question,” said Volsky, “was would they be willing to participate in management activities geared towards biomass production? And only 51% said yes.”
“Therefore, further education and outreach is needed to sway public opinion.”
The final presenter of the session was Jonathan Rager from Pöyry Management Consulting on how to determine if a biomass plant is a viable business model and what can be done to optimize it.
According to Rager, with the biomass pellet market poised to triple (or quadruple) within the next 10 years, there are four easy steps that any supplier or consumer can take.
First is to know the entire market value chain, from output to input, and expand into non-traditional product development, for example, soy-based bio-foam, to help foster dynamic growth. The second step is to maximize the supply chain and decrease the costs of transporting your feed streams. Next is to rank the technological innovations that your company/plant has access to using a metric and to determine if those specific improvements are needed.
“The final step, and most important,” said Rager, is to determine “how to foster and utilize winning partnerships and relationships within your business.”
“You need to identify potential and attractive partnerships, evaluate their potential and screen them for the best fit to your business model.”
According to Rager, once all those steps are complete, you will have a suitable base upon which to build, expand and promote your biomass.
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