Enviva inks multi-year wood pellet supply agreement with E.ON

By Luke Geiver | February 06, 2012

The European power, gas and renewable energy provider E.ON must have been paying attention to an announcement made by Enviva LP roughly one month ago regarding the biomass provider’s first shipment of wood pellets from its Port of Chesapeake biomass facility to Europe. In December, Enviva sent a shipment of 28,000 metric tons of wood pellets to a European-based customer. Now, E.ON has agreed to a multi-year supply purchase agreement of 240,000 metric tons of wood pellets per year to be supplied by Enviva, starting in 2013. Agreements with companies like Enviva, according to Jan Groeneveld, manager of biomass sourcing at E.ON, that are based on growing the biomass supply and sustainable energy, “are essential for us to invest in biomass generation.”

E.ON’s purchase agreement shows the growth patterns currently seen in the U.S. wood pellet exports market, a pattern John Keppler, chairman and CEO of Enviva, believes will only continue based on energy provider’s like E.ON’s continued investment in alternatives to fossil fuel used to provide heat or power. “Our partnership with E.ON reinforces the economic and environmental benefits achievable from renewable biomass,” he said. With 8 GW of renewable energy capacity already in place, E.ON plans to invest roughly $9 billion in renewable energy generation and climate protection projects over the next five years, according to the company.

“Biomass is one of the lowest-cost renewable solutions available and is a key part of helping us ensure that the lights stay on at a price that is affordable while helping to protect the climate,” Groenevel said. The price of the purchase agreement between Enviva and E.ON was not disclosed at this time.

Enviva currently has 750,000 metric tons of annual biomass production capacity, with plans for more production facilities in the mid-Atlantic region. The deep water terminal at the Port of Chesapeake already includes a 157-foot-by-175 foot wood pellet storage dome that can hold approximately 50,000 metric tons. The Port facility has the capacity to recieve and store up to three million tons of woody biomass annually.

In November 2011, E.ON announced details of a plan to build a $189 million, 30 MW biomass power plant near Sheffield, England, adding to the 1,500 MW of renewable capacity already under development in the U.K.