World’s Largest Pellet Factory Planned in U.S.

RWE Innogy is to build a factory to produce biomass pellets in the southern part of the U.S. state of Georgia. The plant will have an annual production capacity of 750,000 tonnes, making it the biggest and most modern of its type in the world, the company says.

Carried out in collaboration with BMC Management AB, which specialises in the development of biomass manufacturing solutions and is based in Sweden, the total investment in the project is some €120 million.

Pellets manufactured in the facility will initially be burnt in the existing power plants of Amer in the Netherlands, where currently already up to 30% of the hard coal has been replaced by solid biomass, mainly wood pellets. There are plans to expand the proportion of co-firing to up to 50%. The two power plant units belong to Essent, which RWE took on as a result of the partnership both companies entered in September 2009.

In the coming years, use of the pellets is to be extended to other pure biomass power plants and also to conventional power plant sites in the Netherlands, Germany, Italy and the UK.

Around 1.5 million metric tonnes of fresh wood are needed each year to produce 750,000 tonnes of pellets, the company says, and unlike Europe, the US has a huge growth surplus of wood that is not used. This is particularly true in the Georgia region, from which numerous paper and pulp companies have withdrawn over the past decade, thus further reducing the demand for wood.

The pellets are to be shipped to Europe from the port of Savannah and a long-term transport contract has been concluded with shipping company Norden A/S of, Denmark.

Dr. Leonhard Birnbaum, board member of RWE AG said: “Through this investment, RWE has taken a strategically important step towards safeguarding the supply basis for the constantly growing biomass market in Europe. This is because we will be unable to achieve the targets for reducing CO2 emissions in Germany and Europe without biomass. But the European wood market will not be able to satisfy the demand in this fast growing sector on its own.”

Dr. Hans Bünting, Member of the Board of Directors of RWE Innogy stated: “Through this new plant, RWE will be able to secure a supply of biomass at stable and competitive prices. Due to the large surplus available, wood is much cheaper in the US than in Europe with its restricted wood land availability. Furthermore, Georgia is a region where forest management is being carried out in a sustainable manner – this fully meets our strict criteria for the production of biomass.”

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