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Biomass '10: Workshop covers wood pellet alternatives, markets

By Lisa Gibson
While wood pellets have gotten a lot of attention in the biomass industry, especially in Europe, other densified feedstocks exist and can be tailored specifically for a certain boiler or customer, according to Robert White, president of Robert White Industries Inc. in Plymouth, Minn.

White discussed other feedstock options his company can provide at the Energy & Environmental Research Center's Biomass '10: Renewable Power, Fuels, and Chemicals Workshop held July 20 and 21 in Grand Forks, N.D.

Engineered biomass fuels (EBF) can be made from wood residues, rice hulls, straw, corncobs and corn stover, switchgrass, paper and cardboard, other waste materials and energy crops, White told workshop attendees. They have potential for use in large commercial facilities, large industrial facilities and utility companies. EBF fuels use locally available nonmarketable biomass and are exposed to less price volatility than traditional pellets. "It's a designer fuel," he said.

A feedstock pricing mechanism is crucial to the future development of the biomass market, according to speaker Stephen Dinehart, principal of Heartland Business Consultants in Middleton, Wis. No biomass market prices currently exist for financial projection and that deters long-term supply contract development, Dinehart said. He defined a market price as the information implicit in individual transaction prices for a commodity including liquidity needs and production requirements; general economic conditions; commodity supply and demand; time value; transaction costs; search costs; and counterparty risk.

Energy crops have no market price and little production, he explained. Agricultural residual sees significant production, but has minimal market prices and forest biomass and wood residues have simple market prices and significant production. The woody biomass market is single-buyer dominated and is influenced by plant size and supply needs, along with transportation surface, he said.

An exchange can facilitate the rapid evolution of a pricing mechanism benefiting both industry and natural resource stewardship, he emphasized. The Biomass Commodity Exchange (BCEX) has been designed to provide that mechanism. "The biomass commodity exchange really grew out of requests from industries," Dinehart said, adding that most concerns dealt with cellulosic biomass. The BCEX will launch in 2011; its homepage is at www.theBCEX.com.
 

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