Wood use in thermal energy

The use of wood for heating continues to grow not only in Latvia but elsewhere in the world as well. It is forecast that wood pellet production capacity in North America and Europe will continue to increase in 2024 and beyond. Pellet supply remains insufficient, as additions have not yet addressed the deficit caused by the ban on wood pellet supplies from Russia and Belarus.

In 2024, production capacity expansion amounting to millions of tonnes is being planned and has already begun in North America, Europe, and the Asia-Pacific region.

In 2023, pellet production capacity in North America was increased by more than 1.2 million tonnes per year. US wood pellet producer Enviva opened the Lucedale plant in Mississippi in the second quarter of 2023. The plant is capable of producing 750,000 tonnes of pellets annually. Copenhagen Biomass Merchants (CM Biomass) also increased wood pellet production capacity in the US by approximately 420,000 tonnes per year in 2023, of which 150,000 tonnes were produced in the first half of the year in Jackson, Alabama.

Millions of tonnes of pellets in the near future

Looking ahead, it is expected that plants with a capacity of up to 5 million tonnes per year will begin operating in North America in the coming years. Pellets will also be produced from alternative raw materials; it is expected that, by 2024, plants will start operating with a combined production volume reaching 1.6 million tonnes.

Construction of Enviva’s Epes pellet plant, which has a planned capacity of 1.1 million tonnes of pellets per year, is scheduled for mid-2024. In 2024, there are plans to begin utilising an additional 130,000 tonnes of capacity through the expansion of the British pellet producer Drax Group’s plant in Aliceville, Alabama.

Regarding alternative raw materials, renewable energy company Delta Biofuel has begun building its 340,000-tonne pellet production plant in the US Southeast, in Louisiana. It is planned that pellet sales to customers will begin in the second half of 2024. The company Delta Biofuel has already sold the majority of its planned production to electricity and heat producers in Europe, by concluding long-term seven-year contracts.

Meanwhile, a Drax plant in Longview, Washington State, will be opened in 2025. The plant’s capacity will be 450,000 tonnes per year. California forestry company Golden State Natural Resources also plans to commission two wood pellet plants on the US West Coast by early 2025. The total production capacity of the plants will be 1 million tonnes per year.

US producer Enviva is evaluating the possibility of building a plant in Bond, Mississippi, in 2026, which would have a capacity of 1.1 million tonnes per year. Enviva, the world’s largest producer of industrial wood pellets, owns 10 plants with a total production capacity of approximately 6.2 million tonnes per year.

In turn, Canadian pellet producer Prairie Clean Energy plans to increase the production of pellets from agricultural by-products to 150,000 tonnes per year by 2026.

Pellet production projects in Europe

In Europe, new pellet production plants are planned with volumes reaching 2.4 million tonnes per year. The projects are in various stages of financing and start-up schedules. Plants are being designed for both industrial pellets and so-called premium segment wood pellets. There are plans to increase the production of torrefied* pellets due to growing demand for their industrial use and decarbonisation needs.

* In the production process for these pellets, biomass is roasted, ground, and then pelletised.

One of the main reasons for torrefaction is to increase energy density.

Additional benefits provided by torrefied pellets:

• Improved combustion properties of pellets (energy content, calorific value)

• Better grindability (less energy required for processing)

• Greater moisture resistance (allows for outdoor storage)

• Lower biological activity (prevents problems with biomass decomposition during storage)

• Increased energy density (reduces transport costs)

In many cases, the benefits of torrefaction can outweigh the additional costs associated with this process.