Boralex Chips Away at Energy Challenges
Maine company employs creative business practices and a fleet of chippers to ensure a steady stream of feedstock is supplied to their plants.
Seeing the Forest for the Power
Founded in the early 1990s, Boralex is part of the Quebec-based Cascade Group, and one of the northeast's key producers of energy from wood residue. Feedstock materials include forest-based products such as bark, tree tops and branches, as well as recycled wood waste such as cable drums, pallets, recycled wood, railroad ties and tree stumps.
According to Eric Dumond, the company's procurement supervisor, Boralex, under the guidance of its founder, Bernard Lemaire, has an uncanny knack for recognizing value when it's not real apparent.
"The state of Maine built a large number of biomass plants during the oil shortages of the late '70s and early '80s," Dumond says. "They all had power contracts, but when the industry fell victim to deregulation and prices dropped, the contracts were bought out and the biomass plants essentially went idle. In the early '90s, Boralex came along and did what it's been shown to do best-see energy opportunities and capitalize upon them."
Today, Boralex owns and operates hydroelectric plants, biomass facilities, cogeneration plants and wind farms throughout the Northeast U.S., Quebec, Canada, and France, resulting in a companywide production capacity of better than 350 MW/hr.
Supplying the Suppliers
In Maine, the overwhelming bulk of the power generated by Boralex is through those five biomass plants, and ensuring a steady stream of material to feed them is an ongoing effort. While the company contracts with area loggers and land-clearing companies to purchase and stockpile the forest-derived material upon which it relies, Dumond says they still take steps to avoid interruptions to that flow. One of the ways they've done so is through a unique series of arrangements with many of their suppliers.
"Essentially, what it comes down to is this: we identify an area that needs logging, and, if there is no contractor in that area, or no one capable of handling additional work, we find someone, either through our own contacts or, more often, through Nortrax, our equipment supplier." Dumond says. "If necessary, we will purchase a piece of equipment-anything from a chip trailer, to an excavator, to a chipper itself-and the contractor will pay it off in dollars per ton across our scales. So, for example, we might buy a Morbark 50/48 chipper, and sign a five-year, low-interest agreement with a contractor based on a 40,000- to 50,000-ton-per-year volume. He supplies the trucks, chip trailer any other support equipment, goes to work, and for every ton that he delivers across our scales on a daily basis, we take a percentage off for payment on the machine. At the end of five years he owns the machine outright, we've gained an additional supplier, and we got the added volume we needed."
Dumond adds that, during Maine's "mud season," which consists of four to eight weeks where work is near impossible due to snow melt and inaccessibility of the areas, the company waives payment.
"This entire approach has done a couple things for us," he says. "First, it has ensured the consistency of our deliveries; we can look out several months and know that the plants will have the fuel they need. More importantly, however, we've gone from seeing those contractors as suppliers to viewing them as partners and that's been important for all parties concerned."
Going for the Chips
To a large degree, the nature of the material Boralex demands for its feedstock dictates the type of equipment used to process it. Because most of that material is hardwood, chippers have generally been the preferred equipment and of those, Dumond says Morbark has been the manufacturer of choice in the overwhelming majority of cases: nearly 40 units in the past five years.
"Everyone has their preferences, so we really leave the choice of equipment to the supplier himself," he says. "But because of the reputation Morbark has in this area-both for production and reliability-that's the brand most often chosen. We have everything out there from a Hurricane 18 Brush Chipper to their newest chipper, the Model 40/36. Again, we will provide whatever they'd like, but there's no denying we welcome a Morbark choice. The level of support we get from Bud Iverson and the folks at Nortrax and the excellent parts availability from Morbark itself are outstanding-and critical to our operation. Without those two things, you risk the potential of having an expensive piece of iron sitting in the woods costing you money instead of making you some."
To illustrate that point, Dumond cites several units from a European manufacturer that have been tried in the past. "We were assured that support would be solid and parts would be available at a moment's notice," he says. "Well, we had an equipment failure in the field and quickly found that neither has been true. So we've made our dissatisfaction known and will stay away from that manufacturer in the future. It's just not worth the headaches-or the lost production."
In addition to the arsenal of chippers, Boralex also has a couple of Morbark's horizontal grinders-a Model 4600 and a track-mounted Model 3800-at work in the forests of Maine.
While each type of equipment has its benefits and advantages, Dumond believes that in Maine the ideal scenario would be one in which both are used.
"There is a huge variety of tree species here, making the upper slopes with their hard woods ideal for a chipper, while the lower slopes, which are mixed with both hard and soft woods, are better suited for a horizontal grinder," Dumond says. "Up to this point, chippers have really ruled the day, mostly because wood chips offer a better [British thermal unit] value. But we have a couple of horizontals out there and they are doing a great job for us. Plus, having a track-mounted grinder allows us to work deeper into mud season which will be a real plus for us."
In what seems to be the true Maine spirit, most of Boralex's suppliers are small logging firms, committed more to doing a good job than they are to quickly expanding and getting rich overnight. Dumond says Boralex works hard to ensure any one supplier doesn't overextend himself with regard to growth.
"We are certainly open to a company wanting to take on more business," he says. "A good example of that is Terry Theriault, owner of Theriault Tree Harvesting out of Stratton, Maine. He is a logger who works on both private wooded lots and industrial forest lands for large land owners. He purchased a chipper on his own about a year ago, but was comfortable taking on more capacity. So he asked to go through our program and recently took delivery of a new Morbark 50/48 Whole Tree Chipper. They are an outstanding company and we have no doubt they will manage the added business just fine."
Such is not always the case, however. Boralex is continually monitoring situations to determine the best course of action. For example, if they are at a point where they know they need more material, should they seek out a new contractor or ask one of their existing ones to ramp up? "There are a lot of variables to consider," Dumond says. "If we are looking at an existing supplier, we have to ask: ‘Is he maxed out?' If he is, we certainly don't want to throw another piece of equipment at him to bog him down even further. We always want our suppliers to be efficient."
In the past, he adds, they've had suppliers who were doing really well with one machine but, with the addition of a second unit, actually lost production across the board.
"We never want that-we always want to ensure a steady stream of material to the plants. And we feel that the programs we have in place, coupled with our reliance upon reputable, well-supported equipment manufacturers, will serve us well as we continue to contribute to the growth of biomass in the area."
Larry Trojak is president and owner of Trojak Communications. Reach him at firstname.lastname@example.org.