Canadian Biomass Magazine

FutureMetrics model helps boiler operators compare the economics of white and black wood pellets

January 9, 2024
By Canadian Biomass staff

By Erin Voegele

FutureMetrics LLC on Jan. 2 published a new white paper and accompanying dashboard that serves as a decision-making model to help power boiler operators who are considering a switch from coal to wood pellets determine if white or black pellets are the optimum choice.

Within the white paper, FutureMetrics president William Strauss explains that black pellets produced using either torrefaction or steam treatment have been touted as a better solution than white pellets for more than a decade. Despite that perception, however, the industrial fuel sector remains dominated by white pellets. Strauss explains there are two primary reasons for that continued dominance. First, the thermal treatment of wood fiber results in both mass and energy loss. Second, the technological processes for producing torrefied or steam treated pellets have often been unreliable and/or unsafe. As a result, he said potential end users are often skeptical of black pellet projects.

According to Strauss, some of the cost of production differential has been reduced for steam treated pellet production via the production of biochemicals from the mass losses that has created some net positive additional cash flow. Research and development work is also underway to create value-added products from the syngas created in the torrefaction process. With these developments, he explains there are now a few examples of steam treated and torrefied pellet plants successfully operating at commercial scale. While Strauss said skepticism of the technologies should remain in place, he also noted that “after due diligence, some technologies will pass muster in terms of reliability, safety and the consistency of cash flows.”

“The security of fuel supply is essential for the end user,” Strauss wrote. “The white pellet sector is large with many dozens of production facilities. The delayed start for reliable black pellet production means that the black pellet sector is small with limited production facilities.

“This analysis focuses on the economics of choice. However, when considering the use of torrefied or [steam treaded] pellets, the buyer should engage in due diligence and include a focus on supply chain robustness.

“This is not an insurmountable hurdle,” he added. “Just like the typical project development model in the white pellet space, if the end user can commit to a known demand at a fair price, then multiple producers can make investment decisions for the new supply demands. Furthermore, there is an efficient pathway to “bolting on” the thermal treatment equipment to existing white pellet plants. This would leverage the already robust white pellet supply chain.”

Within the white paper, Strauss explains that the decision to use white or black wood pellets ultimately depends on which fuel yields the lower total cost per megawatt hour (MWh) generated. The dashboard that accompanies the white paper can help complete the necessary calculations. In general, however, the paper explains that low capacity factors will often result in black pellets being favored. In addition, constraints on pulverizer capacity that result in significant derating with white pellets will also often results in black pellets being favored.

A full copy of the white paper is available on the FutureMetrics website.

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