ReEnergy Biomass Power Plants and Biomass Related Industry Continue to Struggle amid Cheap Conventional Energy Prices

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Researched by Industrial Info Resources (Sugar Land, Texas)--Privately held renewable energy company ReEnergy Holdings LLC (Latham, New York), a partnership company of Riverstone Holdings LLC (New York, New York) with multiple ties to the biomass industry, may possibly have to close yet another biomass power plant.

Over the past five years, ReEnergy has closed three of its biomass power plants due to lack of a current power sales agreement or needed plant upgrades at facilities in order to stay in compliance.

ReEnergy closed the 20-megawatt (MW) Chateaugay, New York plant in 2012; the 30 MW Sterling, Connecticut plant in 2013; and the 35 MW Coastal Carolina Clean Power plant in Kenansville, North Carolina in 2014.

Now ReEnergy's 22-MW Lyonsdale plant in Lyons Falls, New York is expected to close within the next 60 to 90 days, stating the lack of a current power sales agreement and low cost conventional energy have the facility struggling to stay on-line.

The firm purchased five biomass power plants in 2011, and now the only plants associated with that acquisition that remain in operation are the Ashland and Livermore Falls, Maine plants. The fate of additional operational biomass plants in Fort Fairchild and Stratton, Maine and another in Fort Drum, New York remain undetermined.

All industries with biomass ties are struggling amid low energy prices and an estimated 40% dip in wholesale energy prices over the past year.

Companies in the biomass fuel pellet industry are taking a hit as well. European Major fuel pellet player German Pellets GmbH (Wismar, Germany) recently filed for insolvency, and U.S. subsidiary German Pellets of Louisiana LLC has filed for Chapter 11 bankruptcy as a result of low oil prices and concurrent warm winters.

The company spent an estimated $350 million to build a new plant located in Urania, Louisiana that went into operation in September 2015. Companies like Drax Biomass Incorporated (Atlanta, Georgia) recently cancelled plans to construct a $120 million fuel pellet mill in Magnolia, Mississippi; other companies such as Enova Wood Pellet Group, Beaver Wood Energy LLC, Green Circle Bio Energy and Phoenix Renewable Energy have also cancelled major projects.

An estimated $2.6 billion in capital spending in North America to build 64 new fuel pellets plants have either been canceled or put on-hold since January of 2015.

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