State Highway 19 heads north out of Baton Rouge, Louisiana, unfurling in a nearly perfect straight line 35 miles to the Mississippi border. Once across the border, the road becomes Mississippi Highway 33 and continues northward through some of the densest inventories of southern loblolly pine in the United States, eventually reaching the small community of Gloster, Mississippi. This road, two-lanes for the majority of the 60 miles between Gloster and Baton Rouge, is a vitally important component of the supply chain Drax Biomass is building to keep wood pellets produced in the U.S. moving to its massive power station in England.&nbsp;&nbsp; Drax Biomass, a wholly owned U.S. subsidiary of Drax Group plc, is a part the transformation at the Drax Power Station from a reliance on coal and toward sustainable biomass. The future for single-asset power generators confined to coal inputs looks bleak in the United Kingdom as policymakers work to drive carbon out of the nation&rsquo;s power grid. Fully aware of the policy trajectory and its implications for the business, Drax began investigating repowering a portion of its plant with biomass as a strategy for compliance more than a decade ago. Now, this transition towards biomass has become a central business strategy, and the next phase of its evolution has Drax investing hundreds of millions of dollars in U.S.-based pellet production and transit facilities.&nbsp; Gloster is the site of one of two pellet production facilities currently under construction. The second pellet production facility is being built in Bastrop, Louisiana. Together, the facilities will produce around 900,000 tons annually, making Drax not only the world&rsquo;s largest consumer of wood pellets, but also one of its largest producers. &ldquo;We selected these sites for our facilities because of their close proximity to sustainable fiber resources and to existing logistical infrastructure, including transport routes to export facilities,&rdquo; says Ken Budreau, senior vice president, development at Drax Biomass. Drax Biomass must move its pellets as efficiently as possible to a port facility optimized to handle, store and load pellets onto waiting ships for delivery to England. Recognizing this, Drax Biomass is also constructing a terminal at the Port of Greater Baton Rouge capable of handling 3 million tons of pellets annually. The two production facilities and the port terminal represent a $375 million investment in Drax&rsquo;s North American supply chain. Drax&rsquo;s plans are to convert three of its six boilers to biomass inputs. Once complete, these boilers will require nearly 7 million tons of pellets on an annual basis. This demand is arguably a big driver behind the surge in the construction of industrial pellet production capacity all across the eastern seaboard of North America, primarily in the southeastern United States. Despite this robust level of development and construction activity, Drax feels complementing this build-out with its own investment upstream is vital to its business interests. &ldquo;The biomass supply chain is still in its infancy and requires significant investment to support the emerging demand for wood pellets by Drax and others. We saw an opportunity to invest upstream and assist in the development of the biomass sector,&rdquo; Budreau says. &ldquo;It has always been clear to us that the biomass market is only just emerging.&rdquo; The Learning Curve Drax&rsquo;s recent history more than supports Budreau&rsquo;s assertion, as the organization began active research with biomass fuels in 2003. In addition to understanding how wood pellets work in boilers, Drax has invested in pellet production in the United Kingdom, pellet receiving and handling infrastructure in some of the U.K.&rsquo;s biggest ports and has designed and commissioned the world&rsquo;s first rail cars optimized for moving pellets. These investments, largely confined to activities and operations in the U.K. until 2011, have proven invaluable as the company&rsquo;s North American strategy begins to take shape. The accumulated knowledge from these early efforts informs nearly every decision the team makes as it builds out its U.S.-based supply chain.&nbsp; Steve Drayton, senior vice president of engineering at Drax Biomass, has been in the U.S. since April 2012, just months after Drax&rsquo;s U.S. efforts got underway. Drayton, who started his career at Drax in 1992, has worked on virtually all of Drax&rsquo;s U.K.-based biomass efforts including a pellet production facility in Goole and the pellet handling infrastructure at the power station itself. &ldquo;Goole was a massive learning curve for all of Drax, especially me, as I was heavily involved in it,&rdquo; Drayton says. &ldquo;Learning how biomass behaves in a pipeline when we use pneumatic conveying. Learning how material grinds in a hammermill. Learning what kinds of combinations you can use and then also transferring that into the operations side. How many operators does it take to run a plant and what are the critical parameters that you&rsquo;ve got to measure? What are the true operating costs? What are the true wear parts that you really do need to pay attention to and, when you negotiate your contracts you get right, as opposed to what the manufacturers want to sell you that might sit on a shelf for 10 years? So, both commercially and technically, it was a massive learning curve.&rdquo; While it is clear that Drayton and the Drax team accumulated a wealth of knowledge from the construction of the Goole facility, the facilities Drax is building in Gloster and Bastrop are much larger than the 100,000 ton-per-year Goole operation. This step up in scale brings new challenges. &ldquo;It&rsquo;s about scale when you get over 150 and 200 trucks a day coming onto your site. That is a huge challenge, so logistics is one piece of it,&rdquo; Drayton says. The size of the facilities affects equipment sizing and procurement as well. Drayton explains saying, &ldquo;The other thing is, you&rsquo;ve got to look at your single point failures. Obviously, when you get big, there are limits to some of these machinery capabilities. Dryers, for example, when you are on the cusp of going from one to two machines. Making sure that in the design parameters, you are actually optimizing that single point, as opposed to building in a single point of failure.&rdquo; Drayton and his team selected a general contractor in September 2012 and gave Jacksonville, Florida-based design-build firm Haskell the notice to proceed a few months later. The team mobilized in January 2013 and construction began. Work on the two production facilities is slightly staggered, with Amite BioEnergy scheduled to come online about three months before the Morehouse facility, and both facilities to reach full capacity in 2015. As construction on the two facilities nears completion, Drayton and his team have already begun to stockpile inventories of wood. &ldquo;We&rsquo;ve got long-term contracts with a couple of counter parties and they&rsquo;ve started bringing in wood for the Amite facility already. We&rsquo;ll have sufficient supplies on hand when we start up,&rdquo; Drayton says. &ldquo;We have about 5 to 10,000 tons of logs on site right now in the log yard. As we start chipping and bringing the pellets online we&rsquo;ll start ramping up wood deliveries so that when we are at 65 to 70 percent capacity we&rsquo;ve got wood flowing in at the same rate.&rdquo; Staffing Strategy As state-of-the-art as each of these facilities is, they do not operate themselves. Drayton and the Drax Biomass team had to develop and deploy a staffing strategy alongside the engineering and construction effort. &ldquo;We began staffing up nearly 18 months ago when we brought in our vice president of operations for the Gulf as well as the manager at Amite,&rdquo; Drayton says. The team relied on these first hires to identify and recruit successive levels of supervisors, managers and operators at each production facility. &ldquo;All of these guys have been through successive levels of safety training and operator familiarization, and we&rsquo;ve sent them around the country to pellet mills to observe similar equipment, so that when we do start up, the guy operating each machine knows what he&rsquo;s doing.&rdquo;&nbsp; A different approach was taken at the pellet terminal. &ldquo;At the port, we looked at it very closely and we had a plan to recruit internally, but stevedoring is a different wheelhouse than pellet manufacturing. We&rsquo;ve actually engaged a third-party expert to run that facility for at least the first three years.&rdquo;&nbsp; Within a year&rsquo;s time, both Amite and Morehouse will be at full capacity, moving nearly 75,000 tons of pellets through the pellet terminal on a monthly basis to firmly establish Drax as one of the largest pellet producers in North America. That said, Drax continues to hint at even more production and logistics investment in the U.S. In July, during a midyear investors call, Drax Group CEO Dorothy Thompson said, &ldquo;As mentioned at our preliminary results in February of this year, we are also evaluating options to build more pellet plants and port facilities with the aim of securing attractive returns and greater control of sustainable supply chains that we can leverage to our commercial advantage. We have identified the potential to accelerate investment in a third pellet plant in the U.S. Gulf region and we are evaluating the possibility of a U.S. East Coast pellet operation.&rdquo;&nbsp; It is clear that Drax has determined that amassing its own deep experience in pellet production and transport is vital to the success of its transition to biomass generation. Budreau underscores the importance of this experience saying, &ldquo;Drax has been burning biomass for over a decade and during that period we have spent a significant amount of time getting to understand the global fiber market. By operating our own facilities in the U.S., we will continue to learn more about biomass sourcing and processing, so that we can operate our business efficiently and sustainably.&rdquo; ---------- Author: Tim Portz Executive Editor, Pellet Mill Magazine 651-398-9154 <a href="mailto:tportz@bbiinternational.com" target="_blank">tportz@bbiinternational.com</a>

RISING UP IN GLOSTER:  Draxâ€™s Amite Bioenergy began to take shape near Gloster, Mississippi, earlier this summer. The material handling, fuel preparation infrastructure and pellet lines are visible on the right and the woodyard and log crane are ta

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A PLACE FOR EVERY PIECE:  Equipment awaits installation at the Amite BioEnergy construction site. Storage bins with explosion panels are visible on the right, with the dryer tube and the cyclones just beyond. 

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FEEDSTOCK PREP AT AMITE: Workers install equipment on the dry hammermill line. Inbound material moves to the top of one of three platforms and works downward, exiting at the bottom to be conveyed down the production line. 

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OCEAN ACCESS: The mobile ship loader shown here at Draxâ€™s Baton Rouge Transit facility allows ships to be loaded without repositioning, thus reducing vessel time in port. The deepwater Port of Greater Baton Rouge accommodates Panamax-sized vessels.

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UK's Drax Group pushes to bring two production facilities and a pellet terminal online in 2015.

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