PFI Meeting 2008

When a couple of the HHT executives came to our shop a couple of months ago they asked us if we were going to be attending Harman's annual dealer meeting. We said, "No. Because the PFI had sent out their notice of annual meeting months before, and by the way why would Harman book their meeting when the PFI has theirs?" The response stopped me in my tracks. "PFI- What is it that they do, again?" Unfortunately, in many ways I agree with his assessment that the PFI is disjointed, unorganized, and in many cases ineffectual, but I would have liked to see a more proactive response of having industry reps get more involved to help get it on the right path than having them mock it and walk away. He is a good guy, don't get me wrong, it just wasn't what I hoped to hear.
So, off to muggy South Carolina for the meeting. There were probably approximately 250 people in attendance. This has grown impressively. According to one long time member they started back in Missouri in the early 1990's with six people meeting in a hotel room. In attendance were mostly fuel manufacturer's, pellet mill equipment manufacturer's, two maybe three stove manufacturer's reps- including Dan Henry from HHT, a couple of commercial boiler manufacturer's, and three maybe four dealers.
The board meeting took place the day before we arrived. There was a little "professional" scuffle that changed their intended path for leadership. Scott Jacobs from Ozark Pellets in Missouri emerged as the new PFI President, replacing long time President Bruce Lisle of Energex.
After opening comments John Swaan from the Wood Pellet Association of Canada was first to speak. He talked of the success in exporting fuel to Europe. How we exported more pellet fuel to Europe last year than we used domestically, and future growth potential. He was followed by Christian Rakos from an Austrian company who affirmed the success of wood pellet for use as fuel and energy, and said that they would be willing to share their experiences to help us grow.
Dave Atkins did a presentation on a program called Fuels for Schools in which chip fired and/or pellet fired boiler systems were being installed in schools through a grant program. The savings experienced by these schools was impressive.
A representative from ACORE (American Council on Renewable Energy) did a presentation on the potential of biomass energy, and how the pellet industry could benefit from partnering with ACORE.
Then the conversation really steared toward commercial/industrial uses and introduced the catch phrase of the weekend- Biomass Thermal Energy. Their presentation conveyed to the fuel manufacturers that the real growth in the industry was in commercial and industrial applications. Large boiler systems are beginning to emerge, and larger players are developing ground level partnerships for energy production, and industrial applications. There were a couple of larger boiler manufacturer's present who presented their system, and partnership proposals to install these larger systems which would be delivered by bulk from the manufacturers directly.
They also spoke of new legislation that would subsidize biomass use for power production. There was concern among the group about raw material difficulties, and how this would magnefy the issues if they were competing against groups that could use the subsidy. Talk shifted to government affairs with the usual plea for funds for lobbying efforts. This is where the PFI seems to get stuck. The talk of raw material shortages arises. Then it is clarified that the easy and inexpensive raw material is getting difficult to get. You have to pay where ten years ago you may not have... Then talk turns to growing both individually and as an industry. A great number of pellet mills are not interested in growth. I can see their point. Growth is risky- Remember what happened the last time the industry took a big leap in 2005 pulling in all sorts of fuel from Canada's West coast and put big bucks into processing plants? We certainly do. To put a number on it, dealer's who grew capacity to meet the last demand bubble lost five figures, pellet mills lost six to seven figures, and stove manufacturer's lost seven or eight figures. That is a lot of zeroes!! Thus the PFI divides. Small stable growth to support local residential markets on one end, and the extreme company that wants to go all commercial industrial and spend every penny on government lobbying on the other.
The conference had it's light moments, like when Dan Henry's friend sang a song he had written in the seventies about a Plain Ol' Brown Recyclable Paper Sack (I think I got it right??), and it was good to see familiar faces, and try to get a feel for their take on the current situation.
There was a good conversation about standards. They have come up with a label and testing system that will classify wood pellets more consistently, and slightly more accurately. The big definer will still be ash content, although it will also include btu's sodium content, etc. This will help the end user have a better idea about what is in the bag as 99% of pellets on the market claim premium status by the current definition.
I do have to say that as a dealer I would have been very disappointed if I attended the PFI conference hoping for answers about pellet fuel availability and solutions for the current situation in the Northeast. There really, that I noticed, was no talk of residential use, dealers, or supply issues in the Northeast.
The focus of this conference was commercial and industrial applications, using wood pellets for thermal energy, and obtaining government support.
I walked away from the conference with two main thoughts- We are now exporting more inexpensive wood pellet fuel to Europe than we use domestically, while importing even more expensive oil. The growth of this industry, at least by the the main Northeast pellet manufacturer's desire, is in commercial and industrial applications.

Room to Grow!

In 2005 120,000 stoves and fireplace inserts were sold throughout the United States. That number has not grown as many think it could have or should have. As a matter of fact the number actually went down last year. Pellet stoves (as opposed to whole house systems) were new to the European market around 2005. They sold somewhere in the neighborhood of 16,000 stoves that year. Last year in Europe over 360,000 pellet stoves were sold. What a difference! and Why? Government incentive is still the number one reason in my opinion. Gas and oil prices are much less subsidized and Europeans are encouraged to look to other fuel sources. Then there is the Kyoto protocal and green movement, two areas where we are gravely lacking.
Yet there is hope, and time to change. At the Pellet Forum in Wels, Austria last week the US was declared a country with large growth potential in the pellet market. Of course, Americans in the crowd had to endure a little bit of a beating on why we are so far behind, but the end message is, I believe, a positive one.
Pellet use in the US was estimated between one and one and a half million tons of pellets last year. A source in the pellet industry said there is about 90 million ton of unused wood waste available in the US right now. That is one of the strongest assets we could have. As more pellet mills come on line each year our supply grows, and costs, as always, have remained stable relative to other energy's such as oil.
There is a large commercial and industrial sector that is untapped in this country, and the Europeans have noticed. Some Americans as well. Growth in this sector may open up doors to government support and incentive, as well as push the industry into bulk distribution, and whole house systems that are sparsely available, and still manually demanding with the fuel loading.
Wood pellets have actually had an impressive ride when you consider that we are the only fuel with no government incentive or support. Ethanol is subsidized at $.51 a gallon for example. Even wind and solar energy's have rebates, and incentives in place. The PFI seems to be waking up and taking action, FINALLY. They have had a growing relationship with a lobbying firm, and there are now several people in the industry who are focusing on creating, introducing, and getting bills brought to the attention of our congressmen and senator's. While we have not yet successfully had a bill move through to active status we are gaining ground, and attention in Washington.
I am excited for the future of wood pellets. It is a fuel that is local, renewable- at this point still made from waste products otherwise destined for landfills, carbon neutral, and affordable!

Energiesparverband

Last week in Wels Austria the World Sustainable Energy Days and Pellet Conference was held ending with the Energiesparmesse industry trade show. I was not able to attend this year, but wanted to share a little from my past visits. Many countries converge on the friendly town of Wels located near the German border. It is easily accessible by car as we drove in from Munich one year, or the ever-popular train. My last visit I stayed in Salzburg and enjoyed the countryside during the one hour train ride into Wels each day.
The invitation began with site visits. We all loaded on to motor coaches for visits to various pellet projects. The first stop was at a district heating facility that provided biomass heat for the neighborhood below. The boiler was housed in a modest building with supplies out back. This seemed a practical solution compared to each home having an appliance and independent fuel supply. One appliance maintained by a few people as opposed to 3500 appliances.

As we were driving to our next destination we saw what looked like a small grain truck going down the road past us. We were delighted to see that it was a bulk pellet fuel delivery truck from a local mill.

Our next stop was a local pellet mill. It was built adjacent to the lumber portion of the business with conveyors to move the raw material from one section to the other. Pellets were made with similar equipment to US mills. The difference was after the production. As most fuel in Europe is bulk the fuel is conveyed to a holding tank, and there was a drive through section of the building with a loading hose for the bulk trucks. They did have a small bagging section that was new to them. The price was higher for the ~15 kg bags, but the bags were unique. They were a biodegradable corn fiber bag as opposed to the plastic bags we use in the US.

We then headed off to Guntamatic, a pellet appliance manufacturer. They showed a wide variety of pellet boiler, and furnace systems. Again, most biomass appliances in Europe are whole house systems. They let us tour their efficient and clean factory that uses laser welders, cutters, and a state of the art cad design system. Then they did a product seminar explaining the various components and boiler systems. I was most impressed by their ability to accept a much higher ash pellet, their ash handling system, and the bulk containment systems that pneumatically transferred pellets from the tank to the boiler.
Our last stop was a consumers home. They had created a bin for the fuel in their basement with a convenient fill port on the outside. It was conveyed using an auger to their boiler system. They had received tax incentive from their government to help offset the cost of purchasing and installing the biomass system.

The conference itself began the next day with many government officials making presentations about their countries plans, success, and future goals. There were also conferences on new technologies, and cooperative projects to further technology and distribution. Each country had and shared their various incentive programs. This is a far cry from the US Hearth Show that is run by people tend to merely dismiss pellet on a good day...
The first year I attended they had invited all of the US pellet manufacturers. They were trying to secure additional supplies as their expansion was rapid, and supplies thin. Last year European biomass pellet consumption surpassed 10 million tons. The US doesn't have an accurate figure but estimates put it at 1 to 1/5 million.
The end of the week brought the Energiesparmesse. The equivalent of our hearth show, but so much more. It was a venue with four halls, booths inside and out. We saw everything from the beautiful tiled stoves that are so prevalent over there, to solar systems, pellet-solar systems, boiler manufacturers, builders with pex and insulation systems, bulk feed material supply, stove manufacturers, fireplaces, pipe companies.
The stand-outs in my mind were the BP biomass booth, Okofen's bulk feed bins, Froling's boilers, a company that made pex panels for wall use, and a kitchen stove manufacturer that had a wood pellet kitchen stove that was as elegant as a cast iron wood cook stove, but with the ease of pellet!
We also saw some familiar names like Enviro-fire which started in Europe and sells in the US.
The biggest impression I walked away with was how the government embraced, encouraged, and provided incentive for wood pellet products, and projects. Sweden uses pellet power for schools, government buildings, commercial buildings, district heating, electrical generation, and residential home heating. Italy, Bavaria, and France were not far behind.
What can you do to help encourage wood pellet use in the US? Write your congressmen, and senators. There have been a few bills that have been introduced but have not made it all the way through to fruition. Get both groups on board. You can visit the PFI's web page at http://www.pelletheat.org for more information. Here is a link to the Energiesparverband web site http://www.energiesparverband.com/esv/index.php?id=8&L=1

Clean Stove Act Introduced

Clean Stove Act Introduced
On November 15, Rep. John Salazar (D-CO) introduced the Clean Stove Act of 2007, H.R. 4244. This legislation would authorize a $500 tax credit to encourage consumers to replace their old wood stoves with a new technology EPA-certified wood stove or a pellet stove.
H.R. 4244 is cosponsored by Rep. Michael Michaud (D-ME), Rep. Cathy McMorris-Rodgers (R-WA), Rep. Ron Kind (D-WI), and Rep. Mark Udall (D-CO).
Sen. Mike Crapo (R-ID) is expected to introduce the Senate companion bill soon.
Contact your local congressman and senator to encourage additional support.