The Wood and Fiber Supply Chain Experts
Bioenergy News
From the March 2009 Forest2Mill newsletter.
Until September 2008, announcements of new bioenergy facilities were
flying around like livestock in a strong tornado. In our conversations here at Forest2Market, we
often wondered if the laws of gravity and the realities of manufacturing—huge capital costs,
financing difficulties, drawn out permitting processes and a 50 percent “go live” rate—still
applied. In the last quarter of 2008, we saw a dramatic decrease in the number of new bioenergy
facilities announced and multiple deadlines passed for plants that never made it off the ground.
Indeed, we have seen some evidence of these realities reasserting themselves. In late
January, the 40 MW Biomass Gas & Electric plant scheduled to be built in Tallahassee ran into “
not-in-my-backyard” trouble. The company is now looking for a new site. Rollcast Energy was on
track to build a wood-to-electricity facility near Enon Grove in Heard County, Ga. Residents voiced
strong protest, however, and now the site has been moved to LaGrange, Ga. In September of 2008,
Green Hunter Energy bought a 14 MW Telogia, Fla. power plant. Just five months later, they’ve sold
the plant to Multitrade Biomass Holdings, LLC in order to improve their liquidity position.
While the best laid plans of these facilities have gone awry, other companies are emerging
as solid participants in the field. Multitrade is one of the many companies expanding, and this may
be due to their long experience in the industry (The company opened what was the largest
stand-alone wood-fired power plant in June 1994 in Hurt, Virginia). Multitrade is working on
multiple power plant projects planning to extend their reach beyond Virginia to
Georgia and Florida.
Since the beginning of 2009, new bioenergy announcements are defying gravity and taking
flight once again. Wood pellet plants have been announced for Stone County, Miss. (where Piney
Woods Pellets will produce 50,000 tons/year), DeKalb County, Ala. (where Lee Energy Solutions LLC
will produce 75,000 tons/year), and Camden, Ark. (where Phoenix Renewable Energy plans to use
700,000 tons of wood per year to make pellets; they also plan to build three more plants across
Ark.). Dailey Wood Products has just announced a new pellet facility on Bolon Island, Ore. as well.
Other notable additions include the announcement of the first projects from ADAGE, a joint
venture between Duke Energy and AREVA to build biomass power plants. ADAGE and Energy Northwest
have reached a preliminary agreement to develop 50 MW plants in Wash., Ore., Mont. and Idaho that
would convert wood waste from the timber industry into electricity. The plan calls for the first of
these plants to be operational as early as 2012.
Right now, the bioenergy market is being propelled forward by wood pellets and electricity
generation. The majority of wood pellets produced in the U.S. are exported to Europe, to countries
that have adopted the Kyoto Protocol and are burning the pellets in large scale commercial and
industrial facilities. The wood-to-electricity sector, local and primarily small scale in the U.S.,
will be a growth industry as long as more and more states adopt Renewable Portfolio
Standards.