Solid Energy opens large wood pellet plant

Solid Energy opens large wood pellet plant, announces three-year European export deal

New Zealand’s largest wood pellet fuel plant was opened today by the Prime Minister, the Hon John Key. Built by Solid Energy business, Nature’s Flame, the $34 million Taupo plant will initially produce up to 40,000 tonnes a year of the clean-burning, low-carbon fuel with a substantial proportion of its output exported.

The plant, in Taupo’s Aratiatia industrial park, processes large volumes of pine wood residues from central North Island sawmillers and wood-product manufacturers. These are screened, ground, dried and compressed into wood pellets for bulk delivery in New Zealand and overseas.

Wood pellet fuel – with its minimal carbon footprint and very low ash and sulphur content – is in increasing demand worldwide as both a home-heating fuel and from electricity generators to help their thermal plants to reduce emissions. The plant’s first major shipment – 6,500 tonnes destined for European power plants – is now being assembled at the Port of Napier for loading from 10 March. This first shipment is part of a three-year, $15 million contract with the European utility sector. Nature’s Flame wood pellets are also being exported to Italy for the home-heating market and to Japan, for use by electricity generators and the horticulture sector to heat glasshouses.

Solid Energy Chief Executive Officer, Dr Don Elder, says commissioning of the Taupo plant confirms Solid Energy’s position as the largest wood pellet producer in the Southern Hemisphere (based on actual production). The scale of its output lifts wood pellets into the mainstream of New Zealand energy options and signals the beginning of a new income stream for New Zealand exports.

“Worldwide, wood pellet use is now about 11 million tonnes (mt) a year and growing strongly, with about 3mt of that in ocean trade,” Dr Elder says. “We believe there is much more demand to come – both as a result of rapidly increasing prices for other home-heating energy forms and from industry seeking to reduce emissions. Our substantial plantation forestry resource means New Zealand has the potential to be a leading supplier of quality wood pellet fuel and we are confident that Nature’s Flame can compete very well in the premium end of this market.”

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Overseas demand for home heating and industrial use

Figures for the first three months of 2009 suggest that Europe’s wood pellet imports are now worth about €200 million a year (NZ$400m). In Japan, utility companies are also investigating the incorporation of wood pellets in the fuel mix for their thermal electricity generating stations and Nature’s Flame is working with prospective customers there.

Andy Matheson, Solid Energy General Manager Renewable Energy, says the pellets’ clean-burning properties and low ash content are attracting demand from both the higher-value home-heating market in Europe and from industry in Europe and Asia. “We are shipping into Italy for the domestic market. Other home-heating energy, electricity and oil, is very expensive and consequently Italy now has more than a million pellet fires in homes. So the market is already very well established, with demand for up to 2 million tonnes of top-grade fuel a year.”

New Zealand market growth continues

In New Zealand, the popularity of wood pellets continues to grow. Specialist home heating retailers and building supply chains now stock a variety of wood pellet fires and central-heating boilers. Nature’s Flame is having particular success in the education sector, with more than 40 schools having converted to pellet fuel. Some other Government facilities, such as the Department of Corrections’ Rangipo facility, have also recently begun using wood pellets for heating. Radford Yarn Technologies, an innovative Christchurch manufacturer of high-quality carpet yarns, last year won the Energy Efficiency and Conservation Authority’s supreme award for its conversion from electricity to wood pellets for its primary energy.

Taupo plant – emphasis on energy efficiency

Minimising the energy needed to dry and prepare the pine wood feedstock for milling is crucial to the economics of pellet making and the new Nature’s Flame Taupo plant features a number of energy-efficient features, including a very large belt drier which is far more cost-effective and with much lower emissions than the traditional drum-type driers used in older pellet plants. As well as being built close to the heart of New Zealand’s plantation forestry industry to minimise transport costs, Mr Matheson says the plant has been designed to take advantage of geothermal energy in the future when plant capacity is increased. Depending on demand growth, Nature’s Flame has plans for expansion in stages up to 300,000 tonnes a year over the next three to four years.

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“Dry sawdust, shavings and off-cuts from kiln-dried pine is the preferred feedstock material but there is only a limited amount of that available and supply fluctuates depending on the health of the building and manufacturing trades, so as far as possible we’ve designed this plant to be ultra-efficient in processing waste pine which has not been fully dried,” Mr Matheson says. “On current production, supply will continue to be from sawmill waste and timber processors but when demand increases the plant is set up to process everything up to full logs.

“One of the advantages of the plant is that it can consume the lower grade wood and residues that do not meet the exacting specifications of other wood industry participants. We think the plant can therefore make a major contribution to New Zealand’s forestry sector by using a greater proportion of the over-all forestry resource – important as we face a tougher economic outlook.”

Background: Nature’s Flame was established in 2003, part of Solid Energy’s commitment to help New Zealand in its transition to clean, affordable and renewable energy forms. Nature’s Flame began producing wood pellets at a plant in Rolleston, near Christchurch. In 2005, a second plant was opened, in Rotorua. Nature’s Flame wood pellets are supplied in bags for the home-heating market and delivered in bulk direct to customers’ bunkers by trucks operating in the Central North Island, Auckland, Canterbury, Otago and Southland.

In the 2004 EECA Energywise Awards, Nature’s Flame was joint winner of the Meridian Energy Renewable Energy Company of the Year.

ENDS

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