Canadian Biomass Magazine

WASTE not, WANT not at Premium Pellet

March 29, 2012
By David Manly

Nestled deep in the British Columbia forests, about an hour away from Prince George, Vanderhoof

Nestled deep in the British Columbia forests, about an hour away from Prince George, Vanderhoof is a quiet town located near the geographic centre of the province. And just a few minutes outside of town is Premium Pellet Ltd., which produces high-quality and premium-grade wood pellets for industrial and domestic use.

Every part of the tree is used to create lumber, pellets or heat through processing from the Nechako group of companies.


Premium Pellet, established in 1998, is a subsidiary of L&M Lumber Ltd. (sawmill) and Nechako Lumber Company Ltd. (planer mill), which brings over 40 years of forest industry background to the table. All three companies are part of the Nechako Group, a fifty-fifty partnership between the Sinclar Group and local partners.

All reside in the same complex located outside of Vanderhoof, British Columbia, which Canadian Biomass visited in February.

Down to the very last bit
The expansion into pellets came from the group’s need to replace its beehive burner with a more environmentally responsible option. The first step was to add a wood-fired energy system to convert wood waste into heat for thermal oil for its lumber drying operations.

Premium Pellet Ltd., established in 1998, produces high-quality premium-grade pellets from sawdust and shavings produced locally.  
The pellets, once processed, are easily broken, and require cooling for the lignin to harden.


The goal even then was to turn an environmental liability into opportunity, by putting every part of the tree to use, as Alan Fitzpatrick, general manager and director of the Nechako group, explains.

“We were very similar to a conventional sawmill at the beginning – logs came in from the bush, were stored in the yard and were initially processed in the sawmill,” he says. “Then, lumber was sent over to the dry kilns, dried through various sources and then the finished lumber was processed through the planer and shipped to customers.”

But, the company decided to change that precise mix by integrating its biomass directly into the sawmill cycle, instead of burning it and creating waste, as many other mills were doing at the time.

“Traditionally, sawdust, shavings and everything else that wasn’t lumber was burned. But 12 years ago, we stopped burning any of the sawdust and shavings and added an energy system, and step one was to use the hog [fuel] to heat the thermal oil to dry the lumber.”

Installed by Del-Tech, the system both monetized a waste stream and reduced the mill’s carbon footprint by drying lumber with wood rather than fossil fuels.

Pellet production
The next step was to put in the pellet plant and totally eliminate the need for burning and potentially releasing harmful substances into the air. The addition of the plant allowed the sawdust and shavings from both the sawmill and planer to be sent down to the pellet plant for processing into a sellable product.

“It began with only two Bliss pellet mills in operation back in 1999, which expanded in 2006 with the addition of two more mills as well as a dryer, and we started bringing in additional sources of sawdust and shavings from outside mills,” says Fitzpatrick.

Then, at the end of 2011, pellet press number five was added.

The MEC dryer in the plant is powered by burning a small portion of the white wood waste that is used to make the pellets, to make sure the wood is adequately dried to 6% moisture content, before being screened and hammered into evenly sized particles. Then, steam is added to pre-condition the particles, before extruding them into a soft and shiny pellet.

Robert Tarčon, the chairman and president of the Wood Pellet Association of Canada and manager at Premium Pellet, says that the pellets at this stage are not done, and simply fall apart in your hand.

“They must be cooled down first to reset the lignin protein and form a hard and stable pellet that can be packaged, shipped and ultimately burned,” said Tarčon.

Constant monitoring
Safety is paramount at Premium Pellet, and that is never clearer than when discussing fire and spark prevention and containment.

 A small portion of white wood waste is burned to power the dryer, but Fitzpatrick hopes this will soon no longer be necessary, thanks to the use of the ORC.  
The sawdust is composed of white wood waste and is used to both power the dryer and create pellets.


Premium Pellet uses two spark detection methods in the dryer and hammermills, Grecon and Firefly respectively, to make sure there is as reduced risk as possible.

There are four mill operators that manage the pellet production system, and they are responsible for the entire site operation while on shift. “This includes the management of incoming raw material, process flow, production and maintenance employees,” says Tarčon.

“Our pellet mill operates 24/7 and runs four separate crews of four people on each crew, with 20 total employees.”

The pellet plant is also computerized, with a wide variety of conditions at every stage of production that must be met to maintain the highest level of pellet quality possible.

In October 2011, a series of upgrades were installed into the pellet plant to significantly increase production.

The improvements included the addition of a fifth pellet press, changing over the variable frequency drives to the in-feed, as well as upgrading various motors to allow for greater throughput of raw material.

“I would like to say we did these upgrades for ambition, but it came down to the fact that we found we had the capacity to use more material and produce more product – in today’s world, we must look to maximize every opportunity,” said Tarčon.

Step three and beyond
However, with the addition of mountain pine beetle-killed wood to the supply, a new problem arose: increased dryness and a lot of excess heat. “We went from, in some cases, 36 hours of drying time in the kilns to as low as four [with an average of 12 hours]. So, we ended up with a huge amount of excess heat,” Fitzpatrick explains.

Process flow for the Nechako group of companies


The problem could be treated one of two ways – cool the system down at a cost to the business, or channel the excess heat to be used somewhere else within the facility, possibly at a profit.

The solution came in the form of a new entity, Nechako Green Energy Ltd., of which Fitzpatrick is president. The $7 million project involves installing an Organic Rankin Cycle (ORC) generator by Turboden (a division of Pratt & Whitney), using its heat recovery capabilities to generate most, if not all, of the electricity needed to run the plant.

The new ORC system will take in the excess heat produced by the existing energy system, instead of having it transferred into the cooling tower to fan the heat and blow it out at cost.

“The ORC is a closed-loop system,” says Fitzpatrick, meaning no fluids are added or removed from the process. It also requires little to no maintenance.

The ORC works by applying waste heat to a dense fluid that vapourizes at a lower temperature than water and is blown through a turbine, generating electricity. The fluid is then cooled and condensed and brought back to the beginning of the cycle to complete the loop.

The implementation of the Turboden ORC at Premium Pellet is the first in Canada, and aims to be completed in fall 2012, according to Fitzpatrick, with energy generation occurring almost immediately.

The ORC, in addition to providing much-needed electricity and lightening the power load needed for the facility, can also have other uses within the company. The heat produced by the ORC could be used to heat buildings or even help pre-dry fibre destined for the pellet mill. And by eliminating that consumption at the pellet mill dryer, more sawdust can proceed into the pellet mill, producing more product.

Fitzpatrick adds: “When we’re finished putting all this [the green energy plan] together, every single bit of fibre and dust – dust extraction systems, baghouses, collection points for sawdust, shavings, etc. – that we use will get down to the pellet plant.”

The sawmill will also undergo a major addition, with $24 million to be invested to add a new state-of-the-art breakdown line in late 2012. “Once all the upgrades are complete,” Fitzpatrick continues, “we will harvest 850,000 m3 of logs and will produce 250 million board feet of stud lumber, 190,000 metric tonnes of pellets and generate electricity via the ORC.”

The entire sawmill, planer mill and pellet plant require approximately 5.3 MWh of electricity to function at maximum capacity, with the pellet plant requiring 2.5 MWh. With the addition of the ORC, which will be able to generate a maximum capacity of 2.2 MWh, the cost savings potential is significant.

“However, with some efficiencies we are working on in the pellet plant we can close that gap. We’re looking at changing some screen sizes, hammer sizes, and more efficient ways to run our machinery, which will decrease the capacity of the power load that is required,” says Tarčon.

“So, we could actually end up in a balanced situation in which Nechako Green Energy will run Premium Pellet.”

Supply and demand
With all the lumber, sawdust and pellets being packaged and delivered to customers every day, sustainability is key, as is evident by Premium Pellet’s slogan –“Completing the cycle.”

The process begins with L&M Lumber, which harvests lodgepole pine and spruce logs from a sustainable forest base, as well as mountain pine beetle-destroyed trees that were otherwise doomed to rot or burn. 

He adds that although Premium Pellet currently obtains residuals from existing production sites, such as Canfor and Conifex, nothing is guaranteed in such a volatile market. Therefore, other supply stocks are currently being investigated in preparation for the scenario where they might not have access to those materials anymore.

The pellet market, however, is steadily growing.

“We’ve gradually gone from a 50,000-tonne-per-year operation to a 110,000- and then to a 150,000-tonne-per year operation,” says Tarčon. “And now, we expect a capacity of 185-190,000 tonnes per year of pellets produced.”

Only a small portion of the total product is sold domestically, about 15,000 tonnes annually in British Columbia, and approximately 5-7,000 tonnes in the northern United States. The bulk of the pellets are shipped overseas to European markets.

“The balance of our material is split between the U.K. and Northern Europe, and also to Italy – we have industrial pellets that are shipped to the U.K. and Northern Europe markets for power production, and we have a domestic product that goes to Italy that is to be rebagged and sold.”

While the market for biomass amounts to a slow burn instead of an inferno, the use of renewable energy and sustainable processing is what will allow such companies as Premium Pellet to thrive.

The cyclical nature of biomass production is something that Fitzpatrick is immensely proud of.

“Everything from one end of our facility to the other is used to create heat, pellets, electricity or lumber,” he says. “There is hardly any waste.”

Full recovery model
Premium Pellet’s key tenet is making sure nothing is wasted, and this is achieved through computerized scanning and monitoring of all aspects of production through the sawmill, planer and pellet plant.
“We use all the hog, all the logs, there is no beehive burning being done … basically, we use everything of the fibre that comes in with a very low carbon footprint,” says Alan Fitzpatrick, GM and director at the pellet plant and lumber operations.


When logs enter the sawmill and are de-barked, they are scanned using a Comact OLI line with C1/C3 Scanner system. The primary breakdown system scans the logs for shape and a wide range of defects, creates a log breakdown decision, adjusts the cutting tools accordingly, and then re-scans and adjusts the log’s position on the fly, all in real time.

This high-tech emphasis on volume and value recovery continues throughout the rest of L&M Lumber’s operations, and into the Nechako Lumber planer mill, where trimmer optimizers maximize recovery around a host of defects, some specific to processing dry mountain pine beetle-damaged wood. In all of this, processing speed and piece counts are maintained at an extremely high level to remain competitive in today’s soft markets.

The companies have created a low carbon footprint, closed-loop operation where the highest value products are extracted using high-speed, high-recovery technology, and residuals are continually transferred to other value-added operations, from pellets to heat, and soon, power.

Logs are scanned and broken down using a Comact OLI line C1/C3 system, which scans for log shape, size and defects, creates a sawing solution, re-scans, and adjusts log position on the fly to maximize lumber recovery.  

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