Turning to Wood Heat Amidst an Energy Crisis

Much of the world is facing daunting challenges when it comes to energy, due to a number of influences that include rocketing prices, supply chain disruptions, lingering pandemic effects, inflation and an ongoing war. While the U.S. has not remained unscathed by any means, the severity in some other countries is of a much deeper extent. National media outlets report that Germany is rationing hot water, dimming street lights, reducing heating during the night, etc.—all measures aimed at minimizing an unprecedented energy shortage this upcoming winter. Firewood and wood pellet sales have been soaring—to the point of some suppliers rationing sales, too. Deutsche Bank issued a notice on the energy supply situation in mid-June, advising that if further disruptions of Russian natural gas supply to western Europe occur, German households will need to turn to wood heat. 

Here in the U.S., consumers face steep energy costs, with homeowners using fossil fuels projected to spend thousands more this year than in previous years.  In Maine, for example, one of the most heating oil-dependent states in the country, the cost of wood pellets per MMBtu as of Aug. 1 was $18.91—for heating oil, it was $34.97 per MMBtu. While the savings alone may be a motivator for some consumers to seriously consider a heating fuel switch, the current tax credit via the BTU Act may just seal the deal. Currently, it is at 26% and is set to expire next year, but the Inflation Reduction Act—which was just passed by the Senate and is headed to the House for a vote—reups the credit to 30% and extends it for 10 years, although it does cap the credit at $2,000.

As for expanding pellet production capacity in the U.S. and Canada to meet growing demand, much of what’s currently under construction or expansion will be funneled into the export market, though there are some domestic producers making investments in modest capacity expansions. While we work to update our 2023 U.S. and Canada Fuel Pellet Production Map, I put together a list of developing and active projects in our page-12 feature, “Building Out Capacity,” which also includes some closures and acquisitions (this is not an exhaustive list, however). The next map will be mailed out with Q1 2023 issues. 

The other feature in this issue, “Cutting Carbon Via Sails,” page 18, goes into detail about Drax’s partnership with MOL Drybulk, which has developed a cutting-edge sail technology that is expected to reduce carbon emissions of Drax’s wood pellet exports. Enviva has also partnered with MOL for a similar initiative, and a long-term goal of both us to integrate the use of alternative fuels as well.
On the operations and maintenance side of the equation, be sure to read “O&M Tips for Efficient Pellet Production,” on page 22,  well as “The Influence of Material Flow on Pellet Mill Performance,” on page 26. The latter is focused on dust control and management, but emphasizes that this isn’t just a safety topic—it can have big influence on the pelletization process and product quality.

Finally, Pellet Mill Magazine will be heading to Miami in October for the U.S. Industrial Pellet Association’s annual Exporting Pellets Conference. Hope to see you there—be sure to stop by our booth.

Author: Anna Simet
Editor
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