The 2014 Wood Pellet Association of Canada annual conference opened with a market outlook that down to each panelist indicated that the global pellet industry is in the middle of an era of incredible growth. The market panel was preceded by some short remarks from Clark Roberts, the Assistant Deputy Minister of the British Columbia Ministry of International Trade, who noted that the global market is on a trajectory to double. Commenting specifically on the opportunity growing pellet demand offered to British Columbia, Roberts offered, &ldquo;With its huge potential for growth, we have a very bright future.&rdquo;&nbsp;
The panelists that took the stage at the conclusion of Roberts&rsquo;s remarks only affirmed Roberts cause for optimism. The assembled panel included a roster that is fast becoming the de facto market outlook panel at pellet conferences around the world. Seth Walker from RISI, Bill Strauss from Future Metrics, Arnold Dale from Ekman and Henry Pease from RWE in turn offered projections for continued growth in virtually every market currently consuming pellets and the long anticipated emergence of some new markets.
Walker opened the panel with a comprehensive overview on the global pellet market&rsquo;s most notable stories. Walker suggested that demand from the U.K. was about to plateau. &ldquo;I think this might be it for large conversions in the U.K. (Drax, Ironbridge and Lynemouth),&rdquo; he said. Pivoting to markets that are just beginning their emergence Walker pointed to third quarter shipments approaching 600,000 tons, referring to the market growth there as &ldquo;explosive." Walker concluded his comments on South Korea by suggesting that South Korea&rsquo;s demand for pellets could grow to 6.5 million tons within a decade.&nbsp;
Walker also drew attention to the important role that the growth of pellets for thermal uses has had in the development of the industry. He pointed out that in 2004 European demand for pellets for thermal energy was around 2 million tons and modest forecasts show that number reaching 12 million tons per year by 2016. Walker emphasized that when used for thermal energy, pellets beat all other options available in Europe. Pellet derived thermal heat averaged around 5.4 cents per kWh while the closest competitor to pellet heat was natural gas with averages in Europe hovering just below 7 cents per kWh.
Bill Strauss of Future Metrics began his presentation by pointing out that with falling oil prices, the price advantage pellets offer when compared to fuel oil (pellets primary competitor for heating fuel in the Northeast) is at risk. &ldquo;At $52 a barrel for oil, the price advantage offered by pellets goes away,&rdquo; he said. He continued by offering that many home and business owners who have deployed pellet appliances kept their oil boilers installed and connected and could switch back to fuel oil at a moment&rsquo;s notice if the economics became better than pellet heat. Strauss spent the remainder of his presentation offering a compelling case for the repowering of North American coal assets with wood pellets. He pointed to the conversion of Ontario Power Group&rsquo;s Atikokan facility as a proof of concept and model for other power generators with aging coal facilities in the United States to follow.
Ekman&rsquo;s Arnold Dale echoed Walker&rsquo;s thoughts on the importance of the heating market for wood pellets in Europe and established that of the top 10 pellet consuming countries in Europe, seven of them used pellets predominantly for heat. &ldquo;There are a lot of significant thermal markets in Europe, not just Italy,&rdquo; he said. Dale also shared the results of a recently completed survey from the European Pellet Council. Dale suggested that one of the more interesting results from the survey was that 94 percent of European pellet producers believe their business would grow by at least 5 percent in 2015. Fifty-three percent of respondents thought their businesses would grow at least 15 percent. With demand and production both on the rise, there will be a &ldquo;big, big increase in intra-European trade,&rdquo; he said.
Henry Pease concluded the panel and challenged the audience to consider the cost of the transition to renewable energy. &ldquo;Renewable energy is not all good,&rdquo; he said. &ldquo;There are some detrimental aspects to it. Pease suggested that some of the increased public scrutiny is increasingly stoked by the reality of the increased costs of the transition to biomass derived power.
The Wood Pellet Association of Canada annual conference continues through Nov. 19.&nbsp;

From l to r: Gordon Murray, Michele Rebiere, Seth Walker, Bill Strauss, Arnold Dale, and Henry Pease. This market outlook panel kicked off the WPAC annual conference. 

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The Wood Pellet Association of Canada 2014 Annual Conference began with a market outlook panel that found all presenters united in their bullish optimism. Of particular interest were emerging Asian markets and the Netherlands. 

Market forecasts bullish at WPAC

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