German Pellets builds pellet plant in US
At the Interpellets tradeshow that ends today in Stuttgart, Germany, the largest German pellet producer announced it would be constructing its largest production plant ever in eastern Texas.
The plant to be built in Tyler County will have a capacity of 500,000 tons per year. In comparison, Germany's two largest pellet plants have a cumulative capacity of 256,000 tons – and both of them are run by German Pellets. The plant in Texas will therefore be the largest one the Germans have ever built by far. Production is to be exported from Texas to Europe for use as industry pellets in coal power plants. The new plant is expected to go into operation in Q3 2012.
The market for industrial pellets is growing rapidly. At present, around half of global pellet production – 8 to 10 million tons – is used to produce electricity in European power plants. Almost all major European power providers – from E.on, RWE, Vattenfall, and Electrabel in Belgium to Drax in the UK, Dong in Denmark, and Essent in the Netherlands – cofire wood pellets in their coal plants or plan to do so soon. Experts estimate that global pellet production could increase by 18 to 25 percent each year. German Pellets says it might increase its production capacity in the US to 2 million tons if the plant in Texas proves to be successful.
Canada and the US are currently the main pellet exporters for power plants in Europe. At the moment, Canadian pellet producers export up to 1 million tons of wood pellets to Europe each year, equivalent to around 75 percent of the country's total pellet production. The US will also soon have reached the threshold of 1 million. Greencircle Bioenergy has been exporting wood pellets to European power plants for several years from its giant production plant in Cottondale, Florida, with a capacity of 560,000 tons – even larger than the one that German Pellets plans.
But the US is expected to overtake Canada as a supplier, since the US can export more from the eastern coast, whereas pellet production in Canada is largely located towards the West in British Columbia. And Canada is also thinking about using wood pellets in its own power plants. In addition, Canada may begin exporting more pellets to Asia, especially Japan.
In the US, the collapse of the construction sector has led to a tremendous drop in timber production for housing, especially in the South. As a result, timber is available in large quantities, so the US is now starting to talk about using wood pellets in power plants. If the US also begins using its own production, Europe may begin importing more pellets from Brazil and Russia. (Dittmar Koop / Craig Morris)