Standardizing Capacity to Satisfy Growing Markets

By Tim Portz | October 24, 2012

In a Sept. 26 news story titled “Biggest English Polluter Spends $1 Billion to Burn Wood,” Bloomberg News’ Karl Lundgren reported that Drax Power Station, a coal-burning facility in the United Kingdom that provides nearly 7 percent of the U.K.’s electric power, is converting to pellet feedstocks. To continually supply this facility with pellets, Lundgren notes that it would annually require biomass from an area four times the size of Rhode Island. That's a staggering mental picture, and it is interesting that Lundgren did not use a country or region in Europe to illustrate the amount of acreage that will be required to produce the incredible volume of pellets this facility will need. He could have described it as half the area of of Wales. Instead, he chose an American state and, whether intentional or not, he made the connection that nearly everyone in European power and American pellets has already made: Europe’s migration toward a “carbon-lite” energy platform will rely largely on woody biomass commodities sourced from other parts of the world, likely led by producers in the U.S.

A customer of this size, with others like it on the way, is certain to change the trajectory of the established North American pellet industry.  How then, will the industry evolve to satisfy the huge opportunity presented by stations like the Drax facility, while continuing to develop and expand domestic markets?

This issue of Pellet Mill Magazine is well-timed. As we seek answers to that question, we explore not only the evolution of industry-wide standards developed to guarantee European utilities boatloads of consistent and uniform pellets, but also the progress made by a small group of industry advocates to firmly establish domestic markets typically served in truckloads. Luke Geiver’s “Waiting for Standards” examines efforts to create an industry-wide pellet rating system to guarantee customers―foreign and domestic―that the pellets they buy consistently meet established criteria. Anna Simet’s “A First for Thermal” tracks the successful effort in New Hampshire to establish parity for renewable thermal energy to protect and grow a domestic market the policy’s proponents believe has plenty of upside. 

As producers are increasingly being called upon to serve two very different masters, it will be interesting to watch the industry develop practices and policies that support the growth of both market segments.