Fuel Pellet Sector On-Track to Spend More Than $384 Million for Plant Development

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Researched by Industrial Info Resources (Sugar Land, Texas)--Fuel pellet demand has grown during the past decade as consumers search for alternative fuels for home heating, and industrial manufacturers look to fuel boilers from the tiny biomass pellets. According to the Pellet Fuels Institute, there already are 80 plants operating in North America, producing in excess of 1.1 million tons of fuel per year.

According to data extracted from Industrial Info's PECWeb project database, there are 10 plants currently under development in North America, representing a capital investment of more than $384 million. Plant construction costs range from $5 million to $110 million.

The largest of these projects is being developed by Phoenix Renewable Energy LLC (Hot Springs National Park, Arkansas). The company is developing a $110 million plant that will be located in Camden, Arkansas, with the capacity of 250,000 tons per year of biomass fuel pellets, along with a 20 megawatt (MW) combined-heat power plant. Construction is expected to begin toward the end of the year.

Point Bio Energy LLC (La Pointe, Wisconsin) is planning to construct an estimated $100 million fuel pellet mill in Port Allen, Louisiana. The plant will have the capacity to produce 800,000 tons per year of pellets. Construction is slated to start in spring of 2010.

In Canada, Canadian Bio Pellet (Picton, Ontario) is funding an $80 million plant that will be in Picton. The plant is expected to generate 360,000 tons per year of fuel pellets when it is brought online late next year.

In Texas, Reiver Forest Products LLC (Broken Bow, Oklahoma) is developing a 250,000-ton-per-year pellet plant that will utilize pine tree stumps as feedstock to produce the renewable fuel. Construction is expected begin in the fourth quarter of 2009.

Atikokan Renewable Fuels LLC (Thunder Bay, Ontario), another Canadian company, is developing a 150,000-ton-per-year plant that will be located in Thunder Bay. The estimated $7 million project will be located in the former Fibratech building to save on development costs.

In the Maritime Provinces, The Northumberland Woodlot Owners Association (Miramichi, New Brunswick) has joined with members to develop a $12 million plant that will produce 120,000 tons per year of fuel pellets using roundwood and sawdust feedstocks. Construction is expected to begin soon, and the plant is expected to be brought online by the beginning of 2010.

Smaller $5 million-to-$7 million-range pellet plants are being developed by Oregon Western Lumber in Reedsport, Oregon; Fabrication Ecoflamme Incorporated in Temiscaming, Quebec; Prairie Green Renewable Energy in Hudson Bay, Ontario; and First Nation Wood Pellets LLC in Johnstown, Pennsylvania.

Pellet mills produce two grades of fuel: premium and standard. The only difference between the two is ash content. Standard grade pellets are usually up to 3% ash content, while premium grade pellets are less than 1%. This difference is a result of the pellet contents. Standard pellets are derived from materials that produce more residual ash, such as tree bark or agricultural residues. Premium pellets are usually produced from hardwood or softwood sawdust that contains no tree bark.

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