Nedlands-based Plantation Energy Ltd is preparing to develop Australia’s first wood pellet manufacturing facility at Albany’s timber precinct, presenting a new value-adding opportunity for the state’s forestry industry.
Nedlands-based Plantation Energy Ltd is preparing to develop Australia’s first wood pellet manufacturing facility at Albany’s timber precinct, presenting a new value-adding opportunity for the state’s forestry industry.
The facility will be capable of producing 185,000 tonnes of wood pellets each year, using about 250,000t of the feedstock sourced from local blue gum harvest residues.
Wood pellets can be used for domestic heating, and are also supplied to coal-based power generators to co-fire with coal, reducing carbon emissions with little additional capital cost.
The pellets, which are between six and eight millimetres wide and 20-25mm long, are a zero-emissions alternative to traditional heat generation and only emit ash.
The largest market for wood pellets is Europe, with demand into the continent forecast to reach 60 million tonnes per year by 2015.
A number of coal power generators in Belgium, Holland, Italy, Spain and the UK have been using wood pellets to reduce their emissions for about five years, with demand growing in recent times.
A sizeable wood pellet industry has also emerged in North America, where there are about 60 pellet mills producing more than 680,000t of pellets per year.
Plantation Energy director and former Chevron executive Gavin Harper said the Albany plant would be the first of a number of wood pellet manufacturing facilities to be built by the company.
Mr Harper said Plantation Energy would look to build similar plants in other plantation areas of Australia, including Bunbury in the South West, Tasmania, and the ‘green triangle’ region of Victoria.
“We have a good opportunity to replicate the Albany operation to other parts of Australia,” he told WA Business News.
“We’re keen to prove the concept at Albany and get established, and use what we’ve learnt and apply that to the second location.”
Plantation Energy has also been granted the rights to import the first pellet stoves into Australia, which can be used as either central heating or living room systems.
All of the pellets produced at the facility will be exported, until a sufficient domestic market is established.
Mr Harper said that, while the facility would source feedstock from existing, sustainable plantation harvest residues, the company was assessing the feasibility of establishing dedicated plantations for energy in the Great Southern.
The company is undertaking the study in conjunction with Fremantle-based Oil Mallee Company of Australia Ltd, which has identified the potential for oil mallee plantations to be used as a feedstock for energy generation.
The company has raised enough seed capital to develop the Albany operation and is currently preparing its initial public offering ahead of its stock market listing in October, to raise further capital to fund its expansion plans.
Site preparation has already begun, with production expected to start by April 2008. The plant will create between 10 and 14 full-time jobs.
The facility will form part of the proposed Mirambeena Timber Processing Precinct, an 82-hectare site adjoining the existing APEC woodchip mill, 12 kilometres from the Albany port.
Future projects for the precinct include the $300 million Lignor engineered strand lumber plant. There are also plans to establish a biomass power station and other timber processing industries nearby.
The Lignor plant is due to be commissioned in late 2008.
The Forest Products Commission has committed to supply Lignor with log residues until December 2013, as has Melbourne-based Integrated Tree Cropping Ltd, which will supply 100,000t of immature blue gum logs annually from 2009 to 2019.
