Since its founding in 2004, the Enviva family of companies has grown into one of the leading manufacturers of wood pellets in the U.S. Its first pellet plant began operations in 2007, and over the past few years, the company has expanded its production and distribution capabilities to provide increasing amounts of pellets for use at coal-fired power stations. This year alone, Enviva will provide approximately 2 million metric tons of wood pellets to the United Kingdom, Europe and Asia from its six, soon-to-be seven, pellet plants distributed across the Southeast U.S. Enviva ships these pellets from three port sites, and is in the process of adding a fourth. The company maintains long-term lease agreements at the Port of Mobile in Alabama and the Port of Panama City in Florida. The remaining two port facilities––Enviva Port of Chesapeake, Virginia, and new facilities under development at the Port of Wilmington in North Carolina––are company-owned. “By controlling the pellet production process from forest to customer, we are able to ensure the consistency and quality of our product,” says John Keppler, company chairman and CEO. The Enviva family of companies includes Enviva Partners LP and Enviva Development Holdings LLC, a wholly owned private subsidiary. The locations of the pellet plants owned by Enviva Partners, and the number of metric tons each handles per year include: Amory, Mississippi, 110,000 mt; Wiggins, Mississippi, 110,000 mt; Ahoskie, North Carolina, 370,000 mt;  Northampton, North Carolina, 500,000 mt.; and Cottondale, Florida, 650,000 mt. Enviva Development Holdings acquired the Cottondale plant from Green Circle Energy Inc. earlier this year and contributed it to Enviva Partners in April. A separate pellet plant located in Southampton, Virginia, is owned by Enviva Wilmington Holdings LLC, a joint venture between Enviva Partners’ sponsor Enviva Holdings LP, Hancock Natural Resources Group Inc. and certain other affiliates of John Hancock Life Insurance Co. In addition to owning the Southampton plant, the joint venture owns the manufacturing facility under construction in Sampson County, North Carolina, and the terminal at the Port of Wilmington, North Carolina, both of which should be completed early next year. These developments and others are underway in response to the rapidly expanding market for pellets. Market Expansion Enviva primarily sells to customers in the U.K. and Europe, where demand for pellets as a renewable energy resource continues to grow. According to consulting firm Hawkins Wright, European demand is expected to reach 38 million metric tons by 2020, up from 9.9 million in 2013. Several recent announcements and actions in key markets highlight the growth potential in the wood pellet industry. For example, three new, large-scale biomass plants are currently moving forward in the U.K.: MGT, RWE’s Lynemouth, and Drax’s third biomass-converted unit at its power station. In the Netherlands, several utility-led, large-scale biomass cofiring projects and a number of biomass-based industrial steam projects are bidding for new government-backed contracts. Independent market analysts anticipate these projects will create approximately 7 million tons of new demand over the next several years in these two markets alone.  Growth is also expected in the rest of Europe, Asia and the U.S., where the U.S. EPA recently issued its Clean Power Plan, establishing binding targets for emissions reductions in each of the 50 states. The worldwide demand for wood pellets is projected to grow at an annual rate of more than 20 percent for the next five years, with the largest increases likely to occur in Northern Europe, South Korea and Japan. Keppler says Enviva is in active negotiations for additional fuel-supply contracts to target these markets, particularly the new major utility conversions in the U.K. “In an industry that is growing at approximately 20 percent per year, we expect to not only re-contract the volumes within our portfolio, but also for our sponsor to enter into material additional volumes that underpin its capacity development activities and provide a foundation and opportunities for longer term growth for the partnership,” he says. Advantageous Access Enviva’s port accessibility, which provides the necessary infrastructure to handle, store and prepare pellets for shipment to customers, allows the company’s production capacity growth to remain stable. Strategically located just outside of Norfolk, Virginia, the Port of Chesapeake serves as one of Enviva’s most opportune locations for receiving and shipping pellets. Enviva acquired this terminal in 2010. The port is its first company-owned, dry-bulk, deep-water marine terminal, which can host a wide variety of vessels, up to a 40-foot draft. “Deepwater terminal infrastructure for dry-bulk cargo is perhaps the scarcest component in the global wood pellet supply chain,” Keppler says. “Given the fully contracted production capacity, we knew we would be building in and around the Port of Chesapeake—vertical integration made sense. For us, ownership of a deepwater terminal was not only financially sound, but it also gives us operating control over a critical activity where we can ensure safe handling of our product.” The port serves as the shipment point for pellets manufactured at Enviva’s mid-Atlantic facilities—Ahoskie and Northampton, North Carolina, and Southampton, Virginia, sites. Annually, these three plants collectively produce over 1.3 million metric tons of wood pellets. The pellets received are stored in two, large storage domes and loaded for export. Enviva primarily ships pellets using handymax and supramax ships, although the company did ship its first panamax-sized vessel earlier this year. The product shipped on these vessels is made from low-value material such as pulp wood and leftover biomass material including undersized or crooked trees, limbs, tops, wood chips and sawdust. “Enviva’s production plants are strategically located in regions with abundant wood fiber resources—parts of the American South where forest growth exceeds harvest in any given year, even after accounting for our activities,” Keppler says. “This ensures a sustainable supply of wood for pellet production.” The company is also implementing a track-and-trace system that enables it to verify the source of every load of timber received by its facilities, and to monitor the supply chain, ensuring that harvests are conducted responsibly by trained loggers, best management practices are followed, and that Enviva understand other key characteristics of each tract supplying timber. “Once pellets are produced, we undertake stringent quality monitoring of the product at each point along the distribution chain—from plant, to port, to dome, to ship,” Keppler says. Both the Chesapeake facility and the new marine terminal being built in Wilmington provide direct, comparatively shorter shipping routes to the U.K. and the European Union, where their major customers are located, according to Keppler. “This minimizes both our transport costs and our carbon footprint, maximizing the environmental and economic benefits we offer our customers,” he says. Originally at the Chesapeake port site was Giant Cement’s export terminal. Once Enviva acquired the terminal, very little construction was required, as much of the infrastructure from the original cement operation could be repurposed. The terminal has the ability to receive and store goods by truck, rail, ship and barge, although, given the proximity of the three large production plants to the port, pellets are currently principally received by truck. Approximately 160 trucks bring pellets from the three inland manufacturing facilities every day. The Norfolk Southern rail line that came with the acquisition is not being used, but can serve as an option for future consideration. A truck-unloading facility receives the pellets, which are discharged to a conveyor and transferred to the two, 45,000-metric-ton wood pellet storage domes on the site. When a vessel is loaded for a customer, the pellets are discharged via gravity-fed hoppers at the base of the domes and conveyed to the berth before being loaded onto ships via Enviva’s dedicated shiploader. At the new marine terminal in Wilmington, pellets will be transported from the Sampson County plant by truck and the port will receive pellets by rail from a third-party producer. Secure Storage Storage capability is an important part of Enviva’s overall pellet supply chain. The vessels used for storage are perhaps the most striking structures on the horizon of Enviva’s terminal. Contrasted against the greenery of the nearby park, the blue water in the bay and the onsite structures’ shades of gray protrude two, imposing white orbs that glisten in the sun. Dome Technology of Idaho Falls, Idaho, built these striking spheres, and they are also constructing domes at the Port of Wilmington site. These structures make optimal vessels to store pellet fuel for a number of reasons. “One is, they are unlike steel tanks or steel silos, which sweat when the temperature between the inside of the tank and the outside of the tank is different and condensation forms with the potential to damage the pellet,” says Lane Roberts, business development sales manager with Dome Technology. “There is no condensation with the domes, the outside of it is an airform, a material that is a waterproof membrane.” Another benefit to the infrastructure is that it has a relatively small footprint on the port site. “Instead of a warehouse that takes up a lot of square footage, we can get a lot more storage in the same square footage of a site,” Roberts says. “Silos have that same advantage, but often silos need deep foundations. A lot of times, even though it’s tall like a silo, the dome can be built without deep foundations, or we can use different types of soil stabilization that costs less than deep foundations to support them.” Roberts says a third advantage to the dome structures is that once the airform is inflated, all of the structural shell work can be performed inside it, almost like pitching a big tent to work inside. Production doesn’t have to stop once the airform is inflated, and it can protect crew members from harsh weather during activities such as hanging rebar or spraying concrete. The airform itself is a polyester weave coated with PVC on both its inside and outside. Mold inhibitors Mold inhibitors and a UV-resistant coating are also applied to both sides of the fabric.  After the airform is inflated, a primer is applied to the inside of the air form to securely bond the polyurethane foam to it. The polyurethane foam is sprayed about an inch-and-a-half thick, acting as a bonding agent. Steel rebar is attached to the foam, and then shotcrete is sprayed to embed the rebar. From initial inflation to completion, construction takes four to five months. “Although there are less expensive means of storing wood pellets, we have concluded that the dome solution gives us much greater control over the safe handling and storage of our product,” Keppler says. “We have been able to engineer additional safety features into our storage solution including advanced temperature control technologies and fire detection, suppression and control systems.” An array of sensors hanging from the dome shell monitor gas, heat and moisture. The aeration system in the domes controls the temperature of the pellets. Additionally, with the thin-shell concrete structure of the domes, they are built to withstand tornadoes, hurricane-force winds and earthquakes up to eight points on the Richter scale. Dome Technology has provided pellet storage domes with a range of capacities for a variety of producers including four, 80,000-ton storage domes for Drax Biomass in the U.K. The particular dome capacity at the Chesapeake location is due to site restrictions—originally on the site was a steel tank that had a foundation diameter of 175 feet. “That gave us the diameter for the dome,” Roberts says. “We have a height restriction at the site of 157 feet for the dome shell, so that became our height.” The second company-owned Wilmington port hosts similar domes to those at the Port of Chesapeake with 45,000-metric-ton-pellet capacities. In June, the first of the two domes was inflated, and July 29, the second went up. The $50 million export terminal expects about 30 to 40 ships to call at the port. The Enviva family of companies continues to expand its outreach as the demand for pellets rises in existing and budding markets in North America and overseas. Keppler believes it’s effective storage and handling solutions that enable the company to maintain the integrity and high quality of its product, and ensure the consistent delivery of the product on time. “It starts with safely receiving, storing and handling our fuel product,” Keppler says. “With supply not yet keeping up with the potential utility demand for our products, every ton matters, and storage provides the operational flexibility to manage dislocations in the market, with even limited inventory serving as a safety stock.” Author: Katie Fletcher Associate Editor, Biomass Magazine [email protected] 701-738-4920