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Plan needed for competing wood demands - Fonterra

Published: Thu 30 May 2019 11:16 AM
By Gavin Evans
May 30 (BusinessDesk) - Wood is a viable industrial fuel but greater effort may be needed to ensure that new demand from processors doesn’t strip supplies from existing users, Fonterra says.
Co-firing the firm’s Brightwater milk powder plant near Nelson on a wood-coal blend shows that wood is a viable means to reduce emissions from process heat, Tony Oosten, the firm’s energy manager, says.
Capital and fuel costs for new wood or coal boilers are now very close and the company could – were it to be building its Darfield 2 dryer in Canterbury again – do that with wood.
“The problem comes down to the amount of wood,” he told delegates at the New Zealand Minerals Forum in Dunedin yesterday.
Fonterra believes it can get about 15 megawatts of wood into each of its plants, based on the local supply in each region.
At Darfield, that would require 50-60,000 tonnes of green wood “every single year,” he said. That is pretty much all the wood that is available in north Canterbury and would put the firm in competition with panel and board makers in the region.
“This is critical. This is transition engineering. This is about unintended consequences,” he said.
“Do you just let the market go and he who can pay the most gets it? Or do you try and make sure that the Rangiora MDF plant can continue to source material?”
The vast bulk of New Zealand’s carbon emissions come from road transport and agriculture. Only about 5 percent comes from power generation and about 15 percent from heavy industry.
The government is aiming to plant a billion trees in the next decade to help absorb emissions while also increasing the base of available waste wood that can be turned into renewable industrial fuel longer term.
Nelson-based Azwood Energy has said there is ample forestry waste in the hills that could be used, but that demand is being held back by the government’s emphasis on electrification of industry.
Fraser Jonker, chief executive of Alexandra-based Pioneer Energy, told the conference that there isn’t enough wood today and coal is likely to remain an important part of the industrial fuel mix for the next 20 years.
His firm, which operates industrial heat plants in Timaru and Dunedin, is already competing with other wood processors for fuel for clients.
But he said more waste wood can be sourced from the forests if there is sufficient demand at scale to build up those logistics chains.
Wood is almost competitive with coal in Dunedin now, he said, and his firm will next year supply the University of Otago with 150,000 gigajoules of wood energy to meet all its heating needs.
The firm is talking with other potential customers in the lower South Island and that demand could be up to 500-600,000 GJ in five years, he said.
Government policy will also support demand, with more schools and hospitals likely to make the change to wood.
Jonker said there is probably sufficient wood to replace about 10 percent of the South Island’s coal use during the next 10 to 15 years.
“I don’t think you can replace all the coal, so coal will remain for a wee while,” Jonker said. “But we’ve got a lot of waste wood and I think we should just give it a go.”
Fonterra’s Oosten said the firm is on track to meet its energy efficiency and emission targets.
Cheese plants use lower temperatures and can be run on electric technologies.
Milk powder plants are harder, he said, but new plants will be designed to meet their sub-100 degree energy requirements with electricity. That will allow the firm to use wood in the boilers for the higher temperature requirements.
Oosten said the company may use electrode boilers to help meet peak loads or cover specific needs, but their steam cost is roughly twice what the firm is paying now.
“Wood boilers don’t like to fluctuate a lot whereas an electrode boiler you can turn on and off instantaneously. But it’s very expensive electricity and it’s very expensive steam.”
(BusinessDesk)
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