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Inland Asset

Developers in the U.K. and U.S. are using barges instead of railways to move their biomass material
By Luke Geiver | April 03, 2012

David Lowe has been fielding an increasing number of inquiries from potential biomass energy developers lately at his Commercial Boat Operators Association (CBOA) office in London. The CBOA is tasked with increasing freight traffic on the inland and estuarial waterways in  the U.K., and the developers want to know about just one thing, he says: transporting biomass via barge on the country’s plethora of inland waterways.


Success in transporting woody biomass or processed wood pellets on an inland waterway always depends on a number of factors, Lowe says, such as the distance between load and unload locations, or the total volume of product going from point A to point B in a given timeframe. But in many instances, moving biomass on a canal or river system can save time and money and create a competitive advantage.


Benefits by Barge


Several factors make moving product by water a better option than by road, according to Stuart McKenzie, freight operations manager of British Waterways, an organization also working to increase the use of the country’s canals and waterway systems. “One of the biggest advantages is that roads and rail networks don’t actually go to the site where waterways do,” McKenzie says. But, although waterway transport provides environmental benefits, he says the biggest advantage is linked to savings.


According to Lowe, water freight is far more environmentally friendly, producing just 20 percent of the greenhouse gases that road transportation alternatives do. But, the real benefit comes from fuel costs and labor. The Freight Transport Association, a U.K. organization that advocates and supports all forms of freight transport from sea to air, estimates that 40 percent of the costs associated with truck transport stems from the fuel. For water transport systems however, fuel costs only account for 20 percent. “Water freight can be cheaper,” Lowe says. “Water can make better use of labor.” Not only can one or two men working a barge move more product than one or two men driving a truck, but the barge can get it done more quickly. 


The Chamber of Eco Commerce in Atlanta, Ga., has already highlighted the increase of inland water freight transport as an area ripe with potential. The chamber was created this year to provide consulting and advisory services, along with financial assistance for companies in the energy and environment sectors. Through the inland waterway transport project, the CEC is looking to help project developers with technical, organizational or financial support for such projects. According to the CEC, energy consumption per kilometer per ton of transported goods is roughly 17 percent less than that of road transport, and 50 percent of rail transport. And costs associated with water navigations, such as accidents, congestion, noise, air pollution and others, are seven times lower than those of road transport.


But McKenzie says several factors must be met before a freight-by-water approach will work. First, a product, biomass in this case, needs to be sourced and processed in close proximity to the waterway. “In other words, what we call waterside to waterside,” McKenzie says. Next, the navigation system needs to be large enough and rated to support the amount of biomass that needs to be transported to make the process economically viable.


Although that may seem obvious, McKenzie and Lowe are seeing a trend. Barges on the waterways of the U.K. can typically handle 500 to 600 metric tons (550 to 660 tons) of product, which historically has included steel, timber, aggregates, oil, coal and most recently, waste and recycling materials. The recent uptick in waste and recycling material transport has brought with it a change in the amount of product that can be transported on some of the waterways, making biomass transport attractive to those who need to move higher quantities of products.


Some companies not only believe the option of inland waterway freight transport is attractive, but they have plans in place to develop the system for their projects. One entity looking to transport biomass using a waterside-to-waterside approach is Dalkia. The European biomass giant has acquired the necessary planning permits to use the Aire & Calder navigational canal network to transport 360,000 metric tons of wood waste annually for use at a 53 MW power facility currently under development.

Lowe and his team at CBOA began discussing barge transport with Dalkia roughly four years ago. The company wanted to transfer  biomass approximately 15 to 16 kilometers (9.3 to 10 miles) for use at an existing pellet manufacturing facility.


It Makes Sense


Lowe and McKenzie’s time working with Dalkia has given them a better understanding of what it will take to transport biomass on inland waterways. In most cases, the barges already available will not require retrofit, Lowe says. Dalkia will utilize readily available shipping containers to ensure time-saving and efficient loading and unloading processes. “Conveyors can load the barges quickly, but it can sometimes be quite difficult to get that product out,” Lowe says. After the barges are loaded with the containers, a tug will push the barges from behind.


The pricing model used in the biomass transport system will be the same for other products, according to Lowe. A barge needs to earn a set amount per day. Factors that affect the price of shipment include the amount of time required for loading and unloading, and the time it will take to move the material. For example, the charge for going from Hull to Leeds, which is roughly 96 kilometers (59 miles) fully loaded is currently about £5 per metric ton ($7.92), plus handling costs, according to Lowe. For a 20-kilometer trip, the charge would be about £3 per metric ton, but in both cases, handling time remains the same, so quick loading and unloading would reduce costs.


The Dalkia project was formed around the possibility of inland waterway transport, as was a project in Louisiana primed to capitalize on European wood pellet demand. Point Bio Energy LLC chose the Port of Greater Baton Rouge for the future home of a wood pellet plant. The facility, announced in January 2011 by Louisiana Gov. Bobby Jindal, will produce 496,000 tons annually, and bring in some of the feedstock from an intercoastal waterway network that includes the Red River and the Mississippi River.


According to the American Society of Civil Engineers, 41 states (including all states east of the Mississippi River) are served by commercially available waterways. The U.S. waterway networks consist of four main systems, the Mississippi River, the Ohio River Basin, the Gulf Intercoastal Waterway, and the Pacific Coast system. In total, those systems include roughly 12,000 miles of navigable water. The Mississippi River accounts for 9,000 of those miles; the next largest is the Ohio River system at 2,800 miles, followed by the Gulf Coast Intercoastal Waterway at 1,109 miles, and the Columbia River system in the Pacific Northwest at 596 miles. In most waterways, commercial operators are charged a fuel tax of 20 cents per gallon, according to ASCE.


When Point Bio Energy builds a second facility in Louisiana to meet the demand for pellets, access to the Mississippi waterways will again play a crucial role, according to Bill New, CEO of the company. “It is critical,” New says. “The location gives us a competitive advantage because we can bring ships right to our plants.” New believes his barges will have to travel to the facility from an area outside 80 miles to make economic sense, with a lip or retaining wall so the wood chips don’t fall into the Mississippi. Unlike Dalkia, New doesn’t advocate for the shipping container method, but it is clear he supports the idea of improving biomass logistics with landlocked waterway rivers or canals.    


The company is already developing a pellet facility in Peru that will utilize barge traffic on the Amazon River network. “We will be sending pellets by barge and those will be contained and covered,” New says.


For McKenzie and Lowe, biomass transport on inland waterways is a possibility that is starting to make sense in the U.K. But is it repeatable everywhere? New might argue it is. Because the costs of traditional roadway transport are more closely tied to rising diesel fuel costs, it’s possible that the interest McKenzie and Lowe are seeing in the U.K. will spread everywhere inland water is available.

Author: Luke Geiver
Associate Editor, Biomass Power & Thermal
lgeiver@bbiinternational.com
(701) 738-4944

 

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