Grass for the pellet fuel industry The perspective from a

Grass for the pellet fuel industry The perspective from a

Grass for the pellet fuel industry
The perspective from a
manufacturer
Presented by:
John W. Arsenault, ing. MBA
Vice-President QC Operations
Energex Pellet Fuel Inc.
With the collaboration of:
Pellet Fuel Institute (PFI)
Wood Pellet Association of Canada
Ministère de l’Agriculture Pêcheries
et Alimentation du Québec
•Energex Pellet Fuel Inc.
•Construction 1982 (BioShell)
•>200,000 mt/yr capacity (over 2,000,000 tm
produced) in two plants PQ & PA
•Market is North East (95% US)
•Exporting overseas since 1991
•Member of PFI and WPAC
1
PFI Membership
300
250
200
Total
Members
Manufacturers
150
Pellet Fuel Institute
PFI
Supliers
100
Associates
50
0
2003
2004
2005
2006
2007
Total M embe rs
65
62
63
111
142
M anufacturers
38
36
38
70
90
Supliers
18
19
20
35
47
9
7
5
6
5
Associates
100
90
80
70
60
50
40
30
20
10
Total Fuel
Manufacturers
0
2003
2004
2005
2006
2007
New Fuel Standards being
considered by PFI
Development of New Standards
for these Categories:
• Residential Densified Fuel
• Residential Grain Fuel
• Commercial Fuel
Pellet standards
New Fuel
Manufacturers
New Fuel Standards being
considered by PFI
Development of New Standards for these Categories:
• Residential Densified Fuel
• Residential Grain Fuel
• Commercial Fuel
Industry Wide Quality Control & Assurance Program
• Product Registration, Testing, Sampling
2
Proposed New Labelling
New RESIDENTIAL DENSIFIED
Fuel Standards Being
Considered by PFI
•
•
•
•
Super Premium 0 < .5% Ash
Premium 0 < 1% Ash
Standard 0 < 2% Ash
Utility 0 < 6%
• Identical Sliding
Scale Standards
on Both Pellet
Fuel and
Appliances
• Purpose: Make
it Easy for
Consumers
U.S. Government
Relations
RESA Appropriation May Level
Playing Field
Subsidy Per Million BTU’s of Fuel Displaced
$9.00
$8.00
$7.00
All currently subsidized
$6.00
$5.00
Proposed
Subsidy
With RESA
$4.00
Statistics
$3.00
$2.00
$1.00
$BioDiesel
Biomass Electric
Ethanol
Geothermal
Hydropower
Photovoltaics
Wind
RESA Propsed
Pellet Appliance
Subsidy
NOW ZERO
3
Hearth Appliance Shipments
Pellet Appliance Shipments
1998--2007
1992--2008
160,000
140,000
120,000
100,000
80,000
60,000
40,000
20,000
0
Gas
Pellet
t
es
20
06
20
08
Cordwood
19
92
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
20
04
0
+wow%
20
02
500,000
Why?
20
00
1,000,000
19
96
1,500,000
-59%
+76%
19
94
2,000,000
19
98
2,500,000
Electric
2005-2006 Fuel Shipment Numbers
Existing Manufacturers
Proposed Manufacturers
BC/Alberta
Sask/Man/Ontario
2006:
35,222
2006: 27,824
Pacific
Central
F
O
T
2006:
232,331
Mountain
2003:
269,000
2006:
166,006
2003:
105,000
Ongoing Developments
• Market Diversification
– Bulk residential green comfort
– Bulk middle market
– Export
• Raw material diversification
2006:
39,089
E
T
DA
2003: 24,000
2003:
32,000
OU
Quebec/
Atlantic
2006:
98,703
Great Lakes 2003:
32,000
2006:
Northeast
62,231
2006:
2003:
393,931
41,000
2003:
49,000
Southeast
2003:
254,000
2006:
92,171
2003:
43,000
Potential for the
production of
agricultural biomass
Eastern Townships
Bernard Saucier, agronome
In collaboration with Huguette Martel agronome
2008
4
Reed Canary – August 1 2007
Switchgrass –Sept 7 2007 - 120 cm
Wheatgrass – October 6 2006
Challenges
ƒ Ash content
ƒ Outskirt adapted crops
ƒ Profitability
Market needs
Wood
pellets
Énergy (GJ/t)
20,3
Wheat
straw
18,6–18,8
Production Budget
Switchgrass
- Hypothesis :
Fall
harvest
18,2-18,8
Spring
harvest
19,1
Ash (%)
0,6
4,5
4,5-5,2
2,8-3,2
N (%)
0,30
0,70
0,46
0,33
K (%)
0,05
1,00
0,38-0,95
0,06
CI (%)
0,01
0,19-0,51
n/a
n/a
- Yield: 8,8 mT/ha (3.23ton/acre)
- Selling Price:
In 2008 = 45 $ /bdmT
Forecast for 2010 = 60 $/bdmT
- Budget pricing : 60 $/mT
- Revenue hectare : 528 $/ha $213/acre
- Costs : 329 $/ha $ $133/acre
- Margin : 199 $/ha $80/acre
Source : Samson, Roger - REAP
5
Field results 2007
Production Budget
2007 Harvest
• Main cost items:
Reed Canary grass
– Implantation: 4,66 $/ha per yr
(12yr rotation) = 5,6 %
Highest Value
Lowest Value
Average
– Fertilizer & lime/yr : 52,40
$/ha per yr = 15,9 %
Sampled
yield @ 15%
M.C.
kg/ha
9315
4680
7431
Weighed
yield @ 15%
Ash on
M.C.
stalk
kg/ha
Ton/acre %
5865
2.62
7.85
4881
2.18
4.1
5374
2.40
5.19
Ash in
bale
%
5.78
2.04
4.27
Wheatgrass Agropyron intermedium
– Harvesting (from cut to pressing) :
75,70 $/ha = 23,0 %
– Transport : 126 $/ha per yr =
38,3 %
Field results 2008
Highest Value
Lowest Value
Average
4180
2712
3446
1.86
1.21
1.54
Switchgrass Dakota
1193
0.53
5.92
2.95
4.43
7.02
2.41
4.57
6.77
What does the future hold?
2008 Harvest
Reed Canary grass
Highest Value
Lowest Value
Average
Sampled
yield @ 15%
M.C.
kg/ha
10515
5374
7374
Weighed
yield @ 15%
Ash on Ash in
M.C.
stalk
bale
kg/ha
Ton/acre %
%
5187
2.31
6.29
13.2
2406
1.07
3.46
3.86
4070
1.82
4.8
6.3
• GHG limits in Québec & elsewhere?
• Government intervention ?
Wheatgrass Agropyron intermedium
Highest Value
Lowest Value
Average
4630
3304
4217
Switchgrass Dakota
• Biomass worth in a few years?
2.06
1.47
1.88
5.46
3.29
4.18
6.88
3.57
4.79
• Technological advances in Burners &
pellets?
N/A
Small business heating
Small business heating
6
Small business heating
School heating
School heating
7