Wood pellets continue to be a story as North America gears up to supply both Europe and Asia.  Pellets are being used to replace coal in coal-fired electricity generating plants as countries attempt to move away from fossil fuels to meet greenhouse emission standards.  Presently, coal,generates about 41% of the world’s electricity, while biomass accounts for 1.4%, according to the International Energy Agency.

Here are this week’s developments:

IHB reports that Japan and South Korea will be increasing their wood pellet demand. South Korea is taking steps to reduce its dependence on imported fossil fuels and instead invest in domestic renewableenergy technology, including wind, solar, hydropower and biomass. As part of this strategy, the government has initiated a program which includes building eight new pellet plants as well as importing large volumes of pellets in the future. The goal is to consume five million tons of pellets by 2020, a huge increase from the less than a few hundred thousand tons used in 2011. Japan is also expected to increase importation of energy chips and wood pellets as it moves away from nuclear power to produce its electricity. Australia, Vietnam, Indonesia, the Philippines, Canada and the US will likely supply the pellets to these Asian countries.

UK electric utility, Drax Group PLC, will spend $1 billion to convert the country’s biggest coal-fired plant into western Europe’s largest clean- energy producer we learn from Bloomberg Businessweek. Drax plans to convert one of it’s six coal-fired units in Selby, England to burn wood pellets by June 2013 and switch two more units to wood at a later date. Drax joins Germany’s RWE AG and Dong Energy A/S of Denmark in taking coal-fired plants away from fossil fuels as they strive to meet European Union greenhouse gas emission standards. Drax’s current generating capacity is about 4 GW. The largest hydroelectric power operation in Europe is 2 GW. By 2017 Drax will require 7.5 million tons of biomass a year.

The Eastern US is gearing up to export wood pellets to European electrical utilities with new plants to be built in Millinocket, Maine; Sandersville, Georgia; Edgefield County, Georgia; and Jacksonville, Florida. Meanwhile, the port of Brunswick, Georgia is being upgraded to accommodate wood pellet exports.


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