UK's renewable energy targets drive increases in US wood pellet exports

The US Energy Information Administration (EIA) has reported that, in 2014, almost 75% of all US wood pellet exports were delivered to the UK, mainly for the purpose of generating electricity. Overall, US wood pellet exports increased by nearly 40% between 2013 and 2014, from 3.2 million tonnes to 4.4 million tonnes, as the US continues to be the largest wood pellet exporter in the world.

Canada, formerly the global leader in wood pellet exports, fell behind US exports in 2012. According to the US International Trade Commission, US wood pellet exports accounted for more than $500 million (€462 million) of trade in 2014.

The main driver for growing wood pellet consumption in Europe is the European Commission's 2020 climate and energy plan, which aims to reduce greenhouse gas emissions and increase the contribution of renewables to total energy consumption in the European Union. Individual member states are assigned national renewable energy targets. The UK in particular is relying on the use of wood pellets in co-firing or dedicated biomass power plants as part of its compliance plan.

The UK's plan states that 15% of energy demand must be met by renewable sources by 2020. A renewables obligation credit (ROC) programme has caused plant operators of large coal-fired power plants to retrofit existing units to either co-fire with wood pellets or convert to dedicated biomass.

Data from the UK Department of Energy and Climate Change (DECC) indicate that electricity generation from plant-based biomass (which includes wood pellets) increased 47% from 8,933 GWh in 2013 to 13,138 GWh in 2014, driven by the continuing conversion of the Drax power plant in north-central England from coal to biomass.

In 2014, the Drax plant's wood pellet supply alone accounted for more than 80% of all of the UK's wood pellet imports from the US, and almost 60% of all US wood pellet exports to all countries. While the US is the largest supplier of pellets to the UK, it is not the UK's sole supplier; in 2014, imports of US pellets only met 58% of Drax's demand. Canada provided another 22% of the wood pellet supply. Only 2.8% of Drax's wood pellet supply was domestically produced.

The Drax plant, located in England, is made up of six units that together are rated at nearly 4GW of electricity generating capacity. Data released by the Drax Group indicate that the first of six units were converted to dedicated biomass in 2013, and biomass provided 1.8 million tonnes of fuel supply that year. A second unit was converted in 2014, and biomass supplied to the plant increased by more than 150%, providing 4.5 million tonnes of fuel. There are plans to convert a third unit by 2016.

To facilitate large volumes of pellet imports from the US, Drax Biomass, a wholly owned subsidiary of the Drax Group, owns and operates several pellet manufacturing mills in the southern US to supply Drax power plants in the UK. Drax's Amite Bioenergy and Morehouse BioEnergy plants in Mississippi and Louisiana, respectively, have a combined annual capacity of nearly 1 million tonnes. Additional Drax pellet mills in the southern US are expected in the future, as well as new mills in other international locations.

 

SOURCE: EIA