Intrinergy boosts German, Belgian wood pellet markets

By Ron Kotrba
Low oil prices haven't stalled growth in the European wood pellet markets, as evidenced by new construction and expansion projects taken on by Intrinergy LLC and its German subsidiary CompacTec KG.

In November, Intrinergy announced it was doubling capacity at its CompacTec wood pellet plant in Straubing, Germany, taking production from 60,000 metric tons (66,139 tons) to 120,000 metric tons (132,277 tons) per year. To facilitate the production hike, a new combined-heat-and-power (CHP) plant was built adjacent to the pellet mill. It's designed to burn wood residues and produce 16 megawatts of thermal energy, which is then used to heat the dryers and generate 1.1 megawatts of electricity for sale to the local grid.

Intrinergy Executive Vice President Thomas Meth said the CHP plant is complete and the added dryer capacity, along with the expanded pellet press line, should be installed by March. The pellets are made from sawdust and other types of wood residues.

Intrinergy also further developed a �34 million ($47.1 million) wood pellet CHP plant in Belgium by closing financing, and signing an engineering, procurement and construction contract with France-based Areva. Meth said the project will produce up to 5 megawatts of electricity for sale to the grid, and enough thermal energy to run the on-site wood dryers.

The facility is expected to produce between 50,000 and 60,000 metric tons (55,116 and 66,139 tons) per year. Groundbreaking is expected by April, and plant commissioning is anticipated in the second quarter of 2010.

Both pellet mills are intended to serve the European domestic heating markets, along with the "medium-sized" market of hotels, hospitals and apartment buildings with a centralized heating unit, Meth said. "Most of our buyers are families that use four to five tons of pellets per year for heating and hot water," he said. "We've focused on the domestic market because it allows us to lower our price when our raw material costs go down but also to increase our prices when our costs go up. In pure industrial markets, it's very, very difficult to do that."