Here we go again... The demand for pellet stoves and fuel has again reached record breaking levels- at least in the NorthEast. On the one hand I get very excited when pellet receives the support and enthusiasm I feel it should get every year but, I do worry about the long term effects of such out of the ordinary demand.
The hearth industry, and the pellet sector are coming off one or two of the worst years on record. Dealers, distributors, and manufacturer's were sitting on warehouses full of goods and banging their heads on the wall trying to figure out what happened? and how to get things moving again. Then during this spring there were hints. Sales promotions yielded much better than average results, calls started coming in early for pre-buy stove orders. By the time the pellet early buy order letters went out there was no stopping it. Orders poured in via the phone, fax, and e-mail. Just when you thought it would slow down a bit it would double.
The first month or two were o.k. Mills were just ramping up for the year and were able to keep up. Then we started losing ground- FAST! Mills could not keep up. Some of it due to the sheer volume requested, some due to trucking logistics.
The old saying is that the mills have the most product in the spring, but actually the opposite is true. During the winter their sawdust supplies actually decrease because suppliers generally use a good portion of it to heat their own buildings. Put that on top of late winter demand for pellets and you end up with the leanest supply of fuel in the spring. Larger mills are able to produce about the same amount of product throughout the year due to larger numbers of raw material contracts, and mill capacity but they certainly don't come out of the heating season with a larger than normal supply.
The word got out early this year somehow and everyone was ordering their fuel early, and in amounts often exceeding what they usually use in a heating season. This alone has created an unprecedented bottleneck! Then the hoarding. This is about as close to an attempted death blow our industry can face at this point. People hoard one year and we can't keep up causing rumors and speculation about the viability, then the next year no one is buying fuel, leaving dealers, and manufacturer's sitting on excess inventory barely surviving... Vicious cycle!
By the end of June most manufacturer's have a pile of massive speculation orders on their desk, and dealers are sold out as far as they dared to sell. Then the inevitable price increases come. The demand is so high the mills are running seven days a week, and up to 24 hours a day. Overtime costs. If a machine goes down it needs to be fixed NOW! Overnight costs on parts, and higher maintenance costs. We need more raw material. Highest bidder, and higher costs for product NOW! Add to that increasing trucking costs, and the weakening US dollar...
Now the dealers, who generally work on a tight margin anyway are taking it on the chin. We absorbed the first price increase, then a second. By the time the third increase comes around you have to send out a letter or make a dreaded phone call to soon angry consumers who don't want to pay a higher price... Allocations kick in. You can have 110% of what you purchased in year's past, or I can only get you X amount of fuel this month. Then loads don't show up because of production glitches, or trucking issues. In many years this inability to get more fuel has slowed sales. Not this year... I really suspect that this may be the last year pellet manufacturer's offer early buy programs at least as we have seen them in the past. The need to distribute fuel year round (as it is made) will need to happen. The mad rush we are getting in the spring is no longer managable.
The back side of this is stoves. You can't get a Harman stove in New England until next year. Most other manufacturer's are back ordered until October, November, or December at this point. In the past the manufacturer's have ramped up their facilities, added shifts and production lines to try to meet the demand. This year Hearth and Home Technologies, owner of the largest pellet stove manufacturer Harman, as well as Quadrafire decided to change the game. In an attempt to control the beast they made the decision to NOT double, triple... production to meet the demand. They are setting allocation levels so as not to flood the market with stoves that may not be able to get fuel. While this may be frustrating in the short term I am hopeful that it will help control the wild swings this industry has been going through. To a consumer I say that these stoves last fifteen to twenty years if you take care of them, and Europe has already proven that it is a viable alternative fuel source, so even if you have to wait until next spring it is worth it!
Showing posts with label Pellet Manufacturer. Show all posts
Showing posts with label Pellet Manufacturer. Show all posts
Wednesday, July 9, 2008
Monday, May 19, 2008
NEWP-Wood Energy Day
Over this last weekend I attended New England Wood Pellet's Wood Energy Day at it's new Schuyler NY plant. (Note- They will not be having it in August at their Jaffrey plant as they have in years past.) This ten million dollar ten acre plant is up and running five days a week now. It supplies New York, New England, and probably down to New Jersey and Pennsylvania. This plant has a great supply of raw material, a sawdust dryer similar to the one in their Jaffrey plant, and four pellet mills that I saw. Fully ramped up it can produce 100,000 tons a year. Enough to heat approximately 25,000 residential installations.
Outdoor raw material storage
Conveyers to move raw materials to storage silos
Storage silos that are mixed before heading in the plant.
They also let us walk through their testing lab. Many pellet manufacturers test their incoming raw materials and finished product. This is done in house by the participating manufacturers. There is not an industry requirement, third party, or outside source. You may keep that in mind when trying to compare products based on the testing data from each. This does help New England with quality control and helps to keep their product consistent with their expectations.
Their facility is heated with radiant floor and powered by a Harman PB105.
The guts... 
Outdoor raw material storage
Conveyers to move raw materials to storage silos
Storage silos that are mixed before heading in the plant.
They also let us walk through their testing lab. Many pellet manufacturers test their incoming raw materials and finished product. This is done in house by the participating manufacturers. There is not an industry requirement, third party, or outside source. You may keep that in mind when trying to compare products based on the testing data from each. This does help New England with quality control and helps to keep their product consistent with their expectations.
Their facility is heated with radiant floor and powered by a Harman PB105.Sawdust Dryer
Pellet Mills- (open)
The guts... Off to the Bagger
Stacked by machine and down the conveyer to the warehouse or onto a truck for delivery to your local dealer!
It was great to see many tons stored in their warehouse and in their yard. 
They can store about 2000 ton in the warehouse, have outside storage for even more, and they also have a silo that will store 300 tons unbagged product behind the facility.
There were many pellet stove and boiler/furnace manufacturers on hand as well as local dealers to demonstrate their wares. The areas congresswoman also made an appearance.
One comment on a conversation that I had with a company rep about a new practice for NEWP. New England has joined other manufacturer's in bagging their product in multiple bags. Lauzon is an example with their Northern and Cubex brands- same pellets- different bags. I personally do not agree with this practice as it sometimes leads people to believe that the product in the different bags conform to different standards. I have already seen this rumor mill spinning about NEWP products. That one bag is better than the other or more "premium" than another. In fact it is just a marketing tool. Period. They make one product. The product is the product, and the bag is the only difference. Anything else is just plain rumor and marketing.
It looked like a successful day for New England Wood Pellet and we were pleased that some of the staff took time out to show us around.
One comment on a conversation that I had with a company rep about a new practice for NEWP. New England has joined other manufacturer's in bagging their product in multiple bags. Lauzon is an example with their Northern and Cubex brands- same pellets- different bags. I personally do not agree with this practice as it sometimes leads people to believe that the product in the different bags conform to different standards. I have already seen this rumor mill spinning about NEWP products. That one bag is better than the other or more "premium" than another. In fact it is just a marketing tool. Period. They make one product. The product is the product, and the bag is the only difference. Anything else is just plain rumor and marketing.
It looked like a successful day for New England Wood Pellet and we were pleased that some of the staff took time out to show us around.
Monday, March 17, 2008
Paper Mill to Pellet Mill
From: http://www.unionleader.com/article.aspx?headline=State+steps+up+with+assist+for+wood-pellet+plant&articleId=45b0de09-3878-471c-acca-49c009709034
State steps up with assist for wood-pellet plant
By DENIS PAISTE
New Hampshire Union Leader Staff
17 hours, 28 minutes ago
Greenova LLC's plan for a wood-pellet plant in the Berlin Industrial Park is getting a boost from the state Department of Resources and Economic Development, which will hold an off-site, 24-acre conservation easement to offset wetlands affected by the plant.
"We're delighted to be able to work with the community to be the holder of that easement," DRED Commissioner George M. Bald said in an interview last week.
DRED's Land Management Bureau already oversees more than 200,000 acres, so adding another 24 isn't a big deal. But Land Management Administrator Bill Carpenter said accepting the easement from the city of Berlin, which owns the land, will require approval from the Governor and Executive Council.
The parcel is near Berlin High School and includes snowmobile trails. Carpenter said DRED will make sure the boundaries of the easement are well marked.
Under state management, the protected land will be open to snowmobile and foot traffic.
"All our easements are open to the public for recreation," Carpenter said.
"In Berlin, we look to protect the working forest access," he said." We want this piece of ground to produce forest products."
The easement is a small piece of a big puzzle for developer Greenova, a wholly owned subsidiary of Hingham, Mass.-based Woodstone USA LLC, which currently operates a pellet plant in Holland, Mich., and has another under way in Moreau, N.Y.
The Berlin Planning Board gave conditional site plan approval to Greenova LLC's application on March 4. The company hopes to complete the permitting process this month and break ground on the facility in May. It isn't expected to be operational until next year.
"Basically we plan on starting construction during the summer, and next spring or summer, a year later, we should be up and running," said Jim Wagner, economic development director for Androscoggin Valley, who has been helping shepherd the project.
Wagner said the state's commitment to the conservation easement was a critical piece. "There are trade-offs, but we want to bring in economic benefits here and not compromise the natural environment and that's what the easement does," Wagner said.
Albrecht von Sydow, a principal in Woodstone USA LLC, said, "We are feeling extremely well about how things are proceeding."
With oil prices at record high levels, timing for a new wood-pellet production plant appears to be fortunate.
"I think it's very, very fair to say we can offer the heating equivalent of 1 gallon of oil for $1.80," von Sydow, a German native who is 33, said. One ton of wood pellets has the energy equivalent of 120 gallons of heating oil. The Berlin plant, announced in June 2007, will be designed to turn out 180,000 tons of wood pellets a year.
To meet that level of production, Greenova will be bringing in 400,000 tons of whole logs, enough to give a shot in the arm to the local logging and forestry industry. Fraser Papers closed its Berlin pulp mill in 2006, ending 250 jobs.
That's part of the wood-pellet plant's appeal to state officials.
"We've worked with Woodstone for the better part of a year," Bald said. "One of the things that we saw that was crucial was that when the pulp mill went down, there was an awful lot of demand for wood that evaporated, and so the hope was to be able to find another way to generate some demand, especially for what we consider to be low-grade wood."
Low-grade wood is not of sufficient quality to be used for lumber or flooring.
"If there isn't a good market for it, basically it stays in the forest, " Bald said. "They're talking about using about 400,000 tons a year."
The mill at its height was using about a million tons a year.
"So, we're delighted that's going to happen," Bald said. "And that's why we had a close relationship with this company."
"The city of Berlin has been very good to deal with, they have been very supportive of this plan," he said.
Fraser Papers bought the mills in Berlin and Gorham in 2002, following their closure a year earlier after the bankruptcy of former owner American Tissue.
In a separate project, Laidlaw Energy Group Inc. is planning to convert a large part of the former Fraser Paper pulp mill site, about four or five miles away, into a biomass-to-energy project that is expected to produce 60 megawatts of renewable energy and use more than 700,000 tons of wood chips a year.
Von Sydow said the wood pellet plant will employ 30 to 35, but the wood demand it creates will sustain or create another 200 or more jobs in the logging industry.
He is still in talks with equipment manufacturers for the production-line machinery, he said.
One of Greenova's principals is Alan McLain, 47, a Berlin native who was laid off from the mill in 2001. He said Greenova plans to meet conditions laid down in its site-plan approval.
After he was laid off, McLain started M&L Foundations with partner Robert Labrecque.
But lately he's been training at Woodstone's Michigan plant to learn the wood-pellet manufacturing business.
"We're certainly going to keep a lot of the outside loggers in business and make a huge impact financially," he said.
"It's great to be involved ... in something positive," he said.
"I live in the Norwegian Village (section of Berlin) and I live four houses away from where I grew up," McLain said. "From my front porch, I can see my parents' home.
"When the mill closed ... we chose to stay here," McLain said. "It's the type of place where you'd want your kids to be raised and when the mill closed it was very emotional," he said.
Besides its economic benefits, the pellet plant will have environmental benefits, too.
"The idea of having a market for low-grade wood really does promote the health of the forest," Bald said. "And we certainly know there is a limit to how much can be cut, but with the previous pulp mill using over 1 million tons a year, certainly we still have quite a bit of capacity before we get to any problems."
Wood pellets also are considered carbon neutral, meaning that the amount of carbon dioxide released when burning pellets are consumed is the same as carbon dioxide consumed from the atmosphere while a tree grows in the forest.
"The average household will enjoy a considerably smaller carbon footprint by heating their home with wood pellets," Woodstone says on its Web site.
The move from fossil fuels to alternative fuels has support at the highest levels in Washington. President Bush said in a speech March 5 at the Washington International Renewable Energy Conference: "I look forward to the day when people in the parts of our country that have got a lot of forests are able to convert wood chips into fuel. And those days are coming."
Von Sydow hopes to produce wood pellets for both the residential market, sold in 40-pound bags, and the commercial market.
"In Sweden, for example, one third of all the houses are heated with a wood-pellet furnace," he said. "The wood pellets are not a secondary heating system, but have actually replaced the old oil or natural gas furnaces."
State steps up with assist for wood-pellet plant
By DENIS PAISTE
New Hampshire Union Leader Staff
17 hours, 28 minutes ago
Greenova LLC's plan for a wood-pellet plant in the Berlin Industrial Park is getting a boost from the state Department of Resources and Economic Development, which will hold an off-site, 24-acre conservation easement to offset wetlands affected by the plant.
"We're delighted to be able to work with the community to be the holder of that easement," DRED Commissioner George M. Bald said in an interview last week.
DRED's Land Management Bureau already oversees more than 200,000 acres, so adding another 24 isn't a big deal. But Land Management Administrator Bill Carpenter said accepting the easement from the city of Berlin, which owns the land, will require approval from the Governor and Executive Council.
The parcel is near Berlin High School and includes snowmobile trails. Carpenter said DRED will make sure the boundaries of the easement are well marked.
Under state management, the protected land will be open to snowmobile and foot traffic.
"All our easements are open to the public for recreation," Carpenter said.
"In Berlin, we look to protect the working forest access," he said." We want this piece of ground to produce forest products."
The easement is a small piece of a big puzzle for developer Greenova, a wholly owned subsidiary of Hingham, Mass.-based Woodstone USA LLC, which currently operates a pellet plant in Holland, Mich., and has another under way in Moreau, N.Y.
The Berlin Planning Board gave conditional site plan approval to Greenova LLC's application on March 4. The company hopes to complete the permitting process this month and break ground on the facility in May. It isn't expected to be operational until next year.
"Basically we plan on starting construction during the summer, and next spring or summer, a year later, we should be up and running," said Jim Wagner, economic development director for Androscoggin Valley, who has been helping shepherd the project.
Wagner said the state's commitment to the conservation easement was a critical piece. "There are trade-offs, but we want to bring in economic benefits here and not compromise the natural environment and that's what the easement does," Wagner said.
Albrecht von Sydow, a principal in Woodstone USA LLC, said, "We are feeling extremely well about how things are proceeding."
With oil prices at record high levels, timing for a new wood-pellet production plant appears to be fortunate.
"I think it's very, very fair to say we can offer the heating equivalent of 1 gallon of oil for $1.80," von Sydow, a German native who is 33, said. One ton of wood pellets has the energy equivalent of 120 gallons of heating oil. The Berlin plant, announced in June 2007, will be designed to turn out 180,000 tons of wood pellets a year.
To meet that level of production, Greenova will be bringing in 400,000 tons of whole logs, enough to give a shot in the arm to the local logging and forestry industry. Fraser Papers closed its Berlin pulp mill in 2006, ending 250 jobs.
That's part of the wood-pellet plant's appeal to state officials.
"We've worked with Woodstone for the better part of a year," Bald said. "One of the things that we saw that was crucial was that when the pulp mill went down, there was an awful lot of demand for wood that evaporated, and so the hope was to be able to find another way to generate some demand, especially for what we consider to be low-grade wood."
Low-grade wood is not of sufficient quality to be used for lumber or flooring.
"If there isn't a good market for it, basically it stays in the forest, " Bald said. "They're talking about using about 400,000 tons a year."
The mill at its height was using about a million tons a year.
"So, we're delighted that's going to happen," Bald said. "And that's why we had a close relationship with this company."
"The city of Berlin has been very good to deal with, they have been very supportive of this plan," he said.
Fraser Papers bought the mills in Berlin and Gorham in 2002, following their closure a year earlier after the bankruptcy of former owner American Tissue.
In a separate project, Laidlaw Energy Group Inc. is planning to convert a large part of the former Fraser Paper pulp mill site, about four or five miles away, into a biomass-to-energy project that is expected to produce 60 megawatts of renewable energy and use more than 700,000 tons of wood chips a year.
Von Sydow said the wood pellet plant will employ 30 to 35, but the wood demand it creates will sustain or create another 200 or more jobs in the logging industry.
He is still in talks with equipment manufacturers for the production-line machinery, he said.
One of Greenova's principals is Alan McLain, 47, a Berlin native who was laid off from the mill in 2001. He said Greenova plans to meet conditions laid down in its site-plan approval.
After he was laid off, McLain started M&L Foundations with partner Robert Labrecque.
But lately he's been training at Woodstone's Michigan plant to learn the wood-pellet manufacturing business.
"We're certainly going to keep a lot of the outside loggers in business and make a huge impact financially," he said.
"It's great to be involved ... in something positive," he said.
"I live in the Norwegian Village (section of Berlin) and I live four houses away from where I grew up," McLain said. "From my front porch, I can see my parents' home.
"When the mill closed ... we chose to stay here," McLain said. "It's the type of place where you'd want your kids to be raised and when the mill closed it was very emotional," he said.
Besides its economic benefits, the pellet plant will have environmental benefits, too.
"The idea of having a market for low-grade wood really does promote the health of the forest," Bald said. "And we certainly know there is a limit to how much can be cut, but with the previous pulp mill using over 1 million tons a year, certainly we still have quite a bit of capacity before we get to any problems."
Wood pellets also are considered carbon neutral, meaning that the amount of carbon dioxide released when burning pellets are consumed is the same as carbon dioxide consumed from the atmosphere while a tree grows in the forest.
"The average household will enjoy a considerably smaller carbon footprint by heating their home with wood pellets," Woodstone says on its Web site.
The move from fossil fuels to alternative fuels has support at the highest levels in Washington. President Bush said in a speech March 5 at the Washington International Renewable Energy Conference: "I look forward to the day when people in the parts of our country that have got a lot of forests are able to convert wood chips into fuel. And those days are coming."
Von Sydow hopes to produce wood pellets for both the residential market, sold in 40-pound bags, and the commercial market.
"In Sweden, for example, one third of all the houses are heated with a wood-pellet furnace," he said. "The wood pellets are not a secondary heating system, but have actually replaced the old oil or natural gas furnaces."
Friday, January 18, 2008
Yellow Pine Energy contracts with Georgia Power
Released : Monday, January 14, 2008 11:57 PM
January 15, 2008 (FinancialWire) Southern Co. s (NYSE: SO) Georgia Power has signed a 20-year contract for electricity with Yellow Pine Energy Company, LLC, a biomass-fired facility to be located near Fort Gaines, Georgia. The material used to generate the power will come from timber harvesting residuals and collection of non-commercial tree species, tree-thinnings, lumber scraps and wood waste reclaimed from landfills. The Yellow Pine facility is scheduled to go into operation in 2010 and will produce 110 megawatts of renewable energy. Under the contract, Georgia Power will purchase almost half of the plant's capacity, or about fifty megawatts. Yellow Pine is an affiliate of Summit Energy Partners and Morris Energy Group. Summit Energy is a renewable energy company formed in 2002 by its principal, Mark S. Sajer, to develop renewable plants. Atlanta-based Georgia Power is the largest subsidiary of Southern. The company serves 2.3 million customers in all but four of Georgia's 159 counties.
January 15, 2008 (FinancialWire) Southern Co. s (NYSE: SO) Georgia Power has signed a 20-year contract for electricity with Yellow Pine Energy Company, LLC, a biomass-fired facility to be located near Fort Gaines, Georgia. The material used to generate the power will come from timber harvesting residuals and collection of non-commercial tree species, tree-thinnings, lumber scraps and wood waste reclaimed from landfills. The Yellow Pine facility is scheduled to go into operation in 2010 and will produce 110 megawatts of renewable energy. Under the contract, Georgia Power will purchase almost half of the plant's capacity, or about fifty megawatts. Yellow Pine is an affiliate of Summit Energy Partners and Morris Energy Group. Summit Energy is a renewable energy company formed in 2002 by its principal, Mark S. Sajer, to develop renewable plants. Atlanta-based Georgia Power is the largest subsidiary of Southern. The company serves 2.3 million customers in all but four of Georgia's 159 counties.
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