Biomass boiler business rapidly expanding

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Web exclusive posted Sept. 9, 2008 at 2:08 p.m. CST

The Lipten Co., a Wixom, Mich.-based engineering, procurement and construction company that specializes in energy solution projects for its industrial clients, is one of a few Michigan companies currently hiring employees, according to sales operations and marketing director Frank Casteel. The company recently added seven members to its biomass division due to the rapidly increasing market for biomass boiler systems, he said, adding that the company is looking at adding at least another 5 people to keep up with new business opportunities.

"Projects are popping up every day," Casteel said. "Biomass boilers are the latest and greatest opportunity that everyone's talking about." In the past year, Lipten has experienced a rapid increase in orders from industrial and commercial companies, including ethanol production facilities, which originally installed natural gas boiler systems but are now scrambling to find a more cost-effective system for their plant. Sometimes the most cost-effective thing for a plant to do is to install one piece of equipment rather than an entire system, but Lipten is willing to provide engineering studies for customers that result in a "shopping list" of possibilities, Casteel said.

Lipten employs approximately 35 people according to Casteel, so they tend to focus on smaller contracts, typically between $3 and $5 million but sometimes up to $50 million. Upfront costs to convert a system from natural gas to biomass are substantial for a plant owner, he said, adding that financing is the single largest issue facing owners. For example, a natural gas system that would cost $12.5 million to install could easily cost $30 million for the equivalent biomass system "and if you still owe $100 million on the plant how do you get the bank to give you $30 million more," Casteel said. However, once installed, that same natural gas system could easily cost an additional $20 million per year in gas bills, which makes the argument for the initial large investment in biomass more easily stomached, he added.

While financing is tricky for some, it's apparent by Lipten's booming business that plant owners are finding money somehow to make the switch to using biomass. Casteel said 95 percent of the biomass division's business is currently conducted outside of Michigan and the company is optimistic that next year will be even better. Lipten's services are ideal for ethanol plants and any industrial or commercial business that generates steam. Casteel said the company is currently working on an ethanol plant/landfill project and has begun engineering work on a cellulosic ethanol facility. "Whether it will be built or not, who knows," however Casteel added, the company's future looks bright.