Pellet reality Entrepreneurs are eager to put biomass fuel pellets on the market, but are they economical?

By Dan Lemke

Waseca, Minn. — Alan Doering receives dozens of phone call from entrepreneurs and businesses interested in developing biomass fuel pellets for energy. Many are familiar with feed pellets but inexperienced with biomass.

“It’s totally different producing a fiber-based biomass pellet than it is a starch-based pellet like feed,”says Doering, AURI scientist.

Most biomass is bulky but lightweight, reducing the distance it can be economically transported — and
increasing handling headaches. Widespread use of biomass for energy depends on developing methods that increase bulk density such as briquetting or pelleting.

As head of AURI’s coproducts lab in Waseca, Doering recognized the need to develop baseline information comparing the economics of biomass verses feed pellets. With help from pellet-fuels experts, Doering documented the economics and average costs of pelleting.
 

“People are concerned with ‘throughput’ — how much product you produce in an hour — because that directly affects your fixed costs,” Doering says. “The more you produce, the easier and faster it is to spread out the cost of equipment. Biomass won’t give the same throughput.”
 

Doering says a 200 horsepower pellet mill that can crank out about 10 tons of feed per hour will only generate about 2 tons per hour of wood or biomass pellets. While feed-pellet costs range from $8 to $28 per ton, biomass pellet production can stretch from $31 to $79 per ton.
 

“Those figures don’t even include the cost of raw materials,” Doering says. “By far the largest variable in biomass pellet production is the cost of procuring and transporting biomass. That’s where the expense is.”

Doering says biomass blends tend to provide better throughput than wood, but will still produce variable results depending on the materials used. The pellet economics information report addresses different pellet grades, raw materials, storage, feed mill conversion potential and equipment requirements.■