AEG to build 2nd CoalSwitch plant in Maine
AEG is currently expanding production of its alternative CoalSwitch pellets in the US, including the development of its initial pellet production facility in Lumberton, North Carolina. CoalSwitch pellets are formed of locally-sourced residual biomass, including bark and treetops/branches, which burn at temperatures nearly identical to coal.
Construction work commenced at Lumberton in December last year but was stalled pending the consent of the North Carolina Department of Environmental Quality (NCDEQ) for the amendment to its air and construction permit, which will allow installation of additional equipment to improve emissions controls to be completed. AEG said it is not currently able to provide a revised timetable for the completion of the plant.
AEG has entered into a joint venture (JV) with Player Design to complete a second production facility in Ashland, Maine. A temporary operating permit has been granted by the state to permit the production of an initial 1,000 tons of CoalSwitch pellets by no later than 31 July.
CoalSwitch produced at the Ashland facility will be shipped to PacifiCorp’s Hunter Power Plant in Castle Dale, Utah for a coal/biomass co-firing demonstration scheduled for June. PacifiCorp is the largest grid operator in the western US, serving 1.9 million customers.
"PDI has built a close working relationship with the team at AEG over many months," said Tyler Player, CEO of Player Design.
"We have seen the potential that CoalSwitch can present to the biomass industry. The opportunity to add a new production facility in Maine is important, not only to allow Player Design to further demonstrate the potential of the fuel and its production process, but also to enable a wider North American audience to appreciate the future of next generation biomass fuels.”
Michael Rowan, CEO of AEG, said: “Since completing the balance sheet restructuring in February, the company has seen increasing commercial interest in next-generation pellets from prospective customers in North America.
“To meet the initial demand to test CoalSwitch and deliver on AEG’s long-term strategy of scaling-up production, AEG has completed a JV agreement with Player Design to construct a second CoalSwitch plant at the Ashland facility in Maine.
“Planning for this project has been underway for some time, preceding the unfortunate and unforeseen construction delays at Lumberton. To optimise timing for the project, existing AEG assets have been utilised to ensure that this second plant is operational before the end of the month.”
Building two plants simultaneously has been challenging, said Rowan, but with the opportunity of completing two five-tonne per hour CoalSwitch facilities in different locations in the US, he hopes future projects will be more easily achievable.
“The JV with Player Design will enable AEG to increase production volumes and also offers the prospect of a secondary CoalSwitch production facility in a region which is highly important for its growth and AEG’s long-term strategy.”
During the second quarter of the financial year, AEG focused its efforts on the dual-track construction of the facilities. Its primary goal for the lumber operations is to identify reliable lumber suppliers and to source relevant feedstock materials for initial CoalSwitch production. The lumber mill operations have successfully produced the requisite feedstock, said AEG, with over 5,000 of material now ready for use.
The sawmill and timber operations at Lumberton have continued to operate, although at a lower production rate. As a result, AEG expects revenues will be ‘materially below’ prior expectations. However, given the low margin nature of these operations, and the anticipated increase in revenues from additional CoalSwitch production, the company anticipates there will not be a significant impact on the company’s results for this financial year.
Troy Jackson, president of the Maine Senate, said: “The State of Maine is excited for the prospects of CoalSwitch production at the Ashland facility.
“The State of Maine wants to see new technologies develop for the biomass industry and assisting companies like PDI and AEG to develop new commercial, environmentally-friendly processes is our utmost priority.”