Examining global project development session hits its mark
The global project development plenary session May 4 at the International Biomass Conference & Expo in St. Louis, earned its name, incorporating development aspects from multiple foreign markets, as well as addressing opportunities for domestic industrial wood pellet markets.
Christian Morgen, general manager of global sales and marketing for Inbicon, stepped back 20 years to explain the start of Denmark’s robust biomass market. In the 1990s, the country clamped down on open burning of wheat straw in fields, instead directing the feedstock toward energy use. Denmark began to cofire the biomass with coal, Morgen explained, although that has a 15 percent limitation. The country also developed a system to pay boiler manufacturers to build wheat straw-compatible boilers for 100 percent biomass feedstock, and also began washing the straw to help eliminate problems with boilers, although that left operators with wet feedstock.
So today Denmark has a robust biomass power market, but also sells cellulosic ethanol to its drivers. Clearly, the political decision in the 90s spurred the development of several technologies for cleaner energy. Inbicon has a 1.5 million-gallon cellulosic ethanol demonstration plant in Kalundborg, Denmark, that uses 30,000 metric tons of wheat straw annually. Morgen took his audience on a tour of the plant through his slide show and said it’s the largest of its kind in the world. “And I can definitely tell you it’s the most expensive one,” he said. “When we build plants in Denmark, we do tend to spend money on looks and architecture.” He did admit, though, that the country is the worst place in the world to start producing cellulosic ethanol because of its robust biopower market. “We see an increasing interest now in building projects in Denmark,” Morgen said.
Inbicon is looking to continue global development in Brazil, Japan, Canada and of course the U.S. “You guys are sitting on a pot of gold,” Morgen said of the U.S., saying there is an “extreme” amount of valuable biomass material.
Fellow presenter Simon Parker, CEO of DP Cleantech Co. Ltd., walked the audience through the development of biopower markets in China, where DP Cleantech excels in its development. “DP Cleantech rode on the back of a tiger,” he said. Parker touched on a reoccurring topic in the plenary session: feedstock supply. He said it’s the biggest component of development and in China, the potential relies primarily in ag residues. Over the past year and into the next two, a major step change is occurring in ag residue to heat and power, he said. “It’s a very exciting time to be a participant.”
Mascoma Canada Inc. weighed in, too, with vice president of research and development Brad Saville discussing the company’s endeavors with its flagship biomass preparation technology, as well as its pretreatment and cellulosic ethanol plant development. The company has worldwide experience with multiple feedstocks, including in Italy, Spain, China, France, and the U.S. and Canada.
Saville said more than 95 percent of Mascoma’s revenue comes from outside its home country of Canada and offered advice for developers looking to expand to global markets. Local partners are helpful, he said, and recommended a diverse workforce that can manage language barriers, as well as understand the culture and business practices. In keeping with the theme of feedstock supply, Saville said, “Nothing happens if you don’t have a secure access to feedstock.”
Finally, the plenary session attendees heard from Seth Ginther, executive director of the U.S. Industrial Pellet Association, which was organized just this year to address a few factors: U.S. domestic policy concerns related to supply and exporting issues; safety and logistics operations; and to “professionalize” the U.S. industrial pellet industry, Ginther said.
Wood pellet demand in Europe is growing quickly and is expected to continue, he emphasized. “Folks, this is a huge opportunity to create jobs; to put people back to work.” Each new exporting pellet plant could employ about 60 people in the facilities themselves and more in the forests. “It’s a great economic driver,” Ginther said. “There’s lots of demand coming down the pike and estimates say this will grow.”
Sustainability is key when shipping pellets to Europe, he cautioned, as buyers want to make sure the material is coming from good forestry practices. “This is something we have down to a science in the U.S.,” he said, adding that it gives the U.S. a significant advantage over competitors. Cheaper shipping costs from the southeast U.S. give us another edge over foreign suppliers.
Ginther said he’s often asked if there will ever be a domestic industrial pellet market in the U.S. His answer, he said, is yes, but it will take work and time. It revolves around policy. Significant challenges must be overcome, Ginther emphasized, but wood pellets possess tremendous potential. If the U.S. replaced just 1 percent of coal use with wood pellets, it would require about 17 million metric tons per year, he cited. “If we could move that needle just 1 percent, it would open up a tremendous market for producers."