Webinar on market trends shows growing pellet markets
As of December 2011, 456 wood-based bioenergy projects exist in the U.S. that have either been announced or are operating, according to Forisk Consulting LLC. Of those, 159 are generating power, 62 are combined-heat-and-power projects, 20 are producing heat, 39 are making liquid fuel and 176 are producing pellets.
Those Forisk numbers, along with information on the market drivers behind woody biomass in North America calculated by RISI Inc., were provided during the final installment of a 14-part Biomass Thermal Energy Council webinar series.
The final webinar reiterated that several market variables still play a major role in the biomass industry, such as the low price of natural gas, the importance of offtake agreements for project finance or the slow progress of biomass power facilities due to the lack of state-based renewable energy goals. It also provided new statistical evidence showing that some areas of wood bioenergy are on the rise, while others are heading in the opposite direction.
According to information provided by RISI, half of all bioenergy projects in the U.S. are being developed in the South Central and Southeastern parts of the country where roughly 49 million tons of green wood per year is going toward 85 projects. The Northeast region of the country comes in at a distant second for green wood tons per year, totaling 11.8 million tons spread throughout 48 projects.
In its updated bioenergy model for woody biomass use starting in 2006 and ending in 2016, RISI decreased its forecast for biomass power applications by 22 percent compared with last year. But Amanda Lang, operations manager for Forisk Consulting, said pellet markets are on a much more positive path. “Pellet mills targeting exports to Europe are moving forward,” she said. “This is a hot market right now.”
Information provided by RISI backed up Lang’s pellet market statements. Seth Walker, associate economist for RISI, said by 2016 there could be 10 million tons of export capacity between the U.S. and Canada. And he indicated European demand is the obvious driver behind that market. As Walker noted, Europe can supply just more than 50 percent of the biomass needed for its renewable energy goals.
The 20/20/20 plan in Europe, which calls for a reduction in greenhouse gas emissions of 20 percent, combined with a 20 percent increase in both renewable energy and energy efficiency by the year 2020, all makes biomass a great fit for Europe. By 2016, Walker estimated that five Western European countries will make up the bulk of new growth areas for biomass. The U.K. will make up 74 percent of the growth, followed by the Netherlands at 9 percent, Italy at 7 percent, Poland at 6 percent and finally, Belgium at 4 percent.
When asked about the effect the European debt crisis could have on the biomass industry’s connection with European pellet imports, Walker provided an answer he indicated was fairly accurate by still yet to be determined. “As of the moment, we are assuming, unless absolutely worse case scenarios happen, Europe is going to go forward with their renewable energy targets.”
Other bioenergy trends Walker mentioned during the webinar included doubled wood fiber consumption by the bioenergy industries, and commercialization of cellulosic ethanol, both within the next five years.
Also joining Walker and Lang, was Jeffery Eppnik, president of Enegis LLC. Eppnik provided information regarding the Biomass Energy Analytical Model (BEAM) that Enegis developed to model biomass availability, pricing and logistics costs by region.
For more information on the final installment of BTEC’s 14-part webinar series, click here.