Idaho pellet project works to overcome challenges

By Anna Simet | June 01, 2016

Though an Idaho pellet plant project announced last spring hasn’t yet come to fruition, the project is still alive and working to overcome final hurdles.

Centennial Renewable Energy plans to build on 48 of 135 acres of the previous site of a Potlatch Lumber Co. timber plant that was built in the early 1900s and shuttered in 1979. “The Potlatch mill was one of the largest in the country…it was turned into a brownfield site in 1981, and nothing has operated there since,” says CRE CEO Rick Fawcett. “It was a mill town, everything was owned by Potlatch, and it’s been severely economically depressed ever since.”

The current plant design is for roughly 175,000 to 200,000 tons of pellets per year, but Fawcett said it isn’t likely CRE will operate on that scale. “The reason for that is there isn’t enough water at the location,” he explains.

That is, enough water for the technology CRE has selected, which is Andritz’s SteamEx black pellet technology. “If we do the steam explosion pellets—and that’s what our permit was submitted as—we’ll have to descope the project down to meet the availability of water,” Fawcett said.

As far as usable assets that remain on-site, Fawcett said there aren’t any, aside from some railroad that needs repairs. “The Washington-Idaho railroad was built to service the mill…Watco, which owns a lot of short lines, owns the railroad from Potlatch to the Washington state line, and from there, the Washington Department of Transportation owns it from the state boundary to Marshall, Washington.”

While the rail that the WSDOT owns is in good shape, the section from Potlatch to Washington—about 13 miles—is in pretty poor repair, according to Fawcett. “We’ve been trying to work with Watco to find a way to upgrade the line, as we’re planning on shipping in unit trains, 110 cars at a time.”

The initial strategy of CRE was to export product to Asian power markets, but Fawcett said that’s on hold in light of the devaluation of Asian currency and strengthened U.S. dollar. “There’s a lot of delta there in the market, as far as value is concerned,” he said. Part of the new strategy is becoming Biotech Energy Systems' exclusive fuel supplier. Owned by CHP Ventures Inc., Biotech Energy is a full-serve biomass technology provider. Under the partnership, CRE provides the fuel—Tiger Pellets and Tyson Creek pellets and wood chips—for the hot air generators and small- and industrial-scale pellet and wood chip systems that Biotech installs.

Though the domestic pellet market saw a tough year, he said CRE and Biotech will focus on areas where there isn’t natural gas. “Our strategy is to focus on smaller projects in those areas…as Biotech rolls out equipment and sets up its dealer network, we’ll set up a comparable [pellet] supply network,” he said.

CRE has a filed a permit to construct with the Idaho Department of Environmental Quality. Fawcett said a lead contractor has been selected, but CRE isn’t yet announcing which company it will be.  The construction timeline is still uncertain, but CRE would like to begin small-scale production late this year or early 2017, Fawcett added. “As far as full production goes, we’ve got to address those three barriers—water, rail and export market stability.”

Editors note: A previous version of the article incorrectly stated that Biotech Energy Systems was previously known as Chiptec. The companies are not affiliated.