Biowood Norway wood pellet plant to close
November 23, 2012, Averøy, NO – Biowood Norway announced plans to close its wood pellet factory at Averøy by the end of the year.
The plant with an annual capacity of 450,000 tonnes annually, the largest in the world, has struggled with a variety of problems since opening in 2010, including stone content in wood chips and claims that traces of beetles were found in the chips, something that was never conclusively proven.
“Overcapacity and low prices in the pellets market as well as technical challenges in the plant have made the production to run at a loss. The Board has considered different measures, but found no basis for long-term profitable operations. The production is expected to be terminated by the end of the year,” said the company in a statement.
Other problems encountered by the facility included a quay for receiving wood chip deliveries that was the incorrect size, damage to machinery from stones (the stone catcher was removed from the original design), consistency of pellet production and a fire caused by a lightning strike.
The closure will leave Biowood Norway’s owner, Hafslund, the country’s largest utility, with a loss of approximately $10 million.