Tuesday, 21 January 2014

The Journey now continues, but in a completely different direction

It's been a very long road. Full of potholes, uphill stretches, and hazardous curves. The first part of the journey, is now complete though, and it's time to start the new journey.

In a couple of weeks, the Pilot Reactor will arrive in the UK. We've already secured a new home for it, and after 5-10 days of commissioning, it will be put into full time operation.

It's odd, but the drivers that I initially though would carry this forward seem to have faded into oblivion. We envisioned that torrefaction Technology would always be based on demand from Utilities (Like DRAX, E-On, RWE, etc.) when in reality - it's a completely different market that has emerged as the champion of this technology.

In the UK, a couple of years ago, the Government embarked on a subsidy program that was to transform the landscape, in terms of how people heated their homes and water. The Program was called the "Renewable Heat Incentive". In a nutshell, this is really a bribe, that lasts for 20 years, to coerce people to NOT burn Oil, or Gas, or Electricity. The net result? Well, about 98% of the systems installed are Biomass. (The remaining 2% is all of the other technologies combined.)

This, presents an interesting proposition. That is to say - that IF the Government is successful in achieving their goal of 20% reduction in Carbon Emissions by 2020, then somewhere in the neighbourhood of 5 million properties will need to be converted from Fossil Energy to Renewable energy.

Assuming that alongside the Renewable System, the developers implement a program of energy efficiency improvements (Insulation, draftproofing, double glazing, etc. - which is also supported by another subsidy called the Energy Company Obligation) then the average consumption will require about 2 tonnes of fuel per year. Even with my rudimentary grasp of mathematics, I can figure out that this totals over 10 million tonnes of biomass fuel per year, every year, for the next 2 decades.

All of this lead to a single conclusion. That is to say - that the Domestic and Commercial market was just as large as the Industrial and utility market for Biomass fuel. The difference however, is the value of that fuel. While utilities look at the overall cost of the fuel, compared to burning coal and paying the carbon penalties; D&C clients look at the comparative cost of the fossil alternative.

Now - I'm not naive enough to believe that people would switch fuels for the same energy rate (there simply isn't THAT much of a "green" conscience - however - they would switch for a substantial cost savings. In addition, they would also switch for some level of future price security.

Increases in the price of fossil energy in the UK are way out of hand. You can't open a newspaper these days without reading about "fuel poverty", exploitative pricing, or the big bad energy Companies jeopardizing little old ladies and forcing them to choose between heating and eating. While there is some truth to the hype, for the most part - it's nonsense. What IS real however - is that lots of folks are paying more than 10% (sometimes WAY more) of their disposable income to simply provide their family with a comfortable environment to live in. According to the very same Government - "fuel poverty" is defined as exactly that. "Paying more than 10% of your disposable income on energy. There are lots of folks here on fixed incomes (retired, etc.) and in many cases, their income is £70.00 a week or so. Which leaves us with a budget of roughly the cost of a pack-O-smokes, to provide all of their heat and all of their hot water weekly. Oddly enough, the subsidy regimes actually allow us to be able to do this.

Now, wholesale development of Biomass heating systems doesn't come without a cost. And that cost is air quality. You don't have to be very old to remember the "bad old days" of beautiful buildings covered in gooey black soot, and the "smoke (for which London is famous) that hung low over the city on a daily basis. Solid fuel combustion, AKA coal, was the primary heating source, for both residential and commercial properties. This was the source of the problem, so an act was implemented to ensure that only "smokeless" coal was burned. Funny how we seem to be going "back to the future".

In the UK, there is Legislation called the "Clean Air Act". It does what it says on the tin, and purports to ensure that the air quality of the Country is maintained. Now - Biomass boilers have to meet a certain maximum emissions profile, to be "exempt" from said Clean Air Act. Most are. The problem is - that when they were tested for their emissions, it was in a laboratory setting, using a very low moisture, specifically grade size of wood chip.

Enter . . . . reality.

The Client installs his shiny new Boiler System, and once handover is complete, is left to his own devices to find fuel for it. Being as times are tough, and he believes that wood chips are wood chips (Right?) he orders from the most economical supplier. The problem is that wood chips are NOT all created equal. So - what happens?

Well . . . he rapidly learns that the boiler efficiency isn't quite up to the Manufacturers claims - AKA - he's going through a LOT more fuel than the book said he should. Now - it doesn't take a rocket scientist to figure out that a tonne of 50% moisture content fuel is 500 kg of fuel, and 500 kg of water (Which doesn't bring anything to the party.) To add insult to injury - said water has this nasty characteristic called "latent heat of vaporisation" which means you use a lot of the energy contained IN the fuel to boil it off, BEFORE you get any energy OUT of the fuel. Not to mention, the fans inside the blower are going 100 miles an hour to keep the stuff alight - and this is not leaving the boiler a lot of time to absorb the energy from the hot air stream, as it whizzes by the heat tubes. Net Result? 30 . . . maybe 40% efficiency.

To add insult to injury - there's a whole lot of nasty "stuff" in that air stream, which as soon as it contacts a cooler surface (like the inside of the Flues) it decides to condense as a sticky black substance (Most people refer to it as creosote). Of course - this acidic substance slowly eats the flue, and eventually results in system failure.

In addition - the emissions from the boiler shoot up like my blood pressure when dealing with anyone in authority (It doesn't matter if it's a Customs Officer at the Airport, or a bureaucrat at Town hall - I seem to have this aversion to that type of person.) and before you know it - the next door neighbour is screaming bloody murder - and calling the authorities. "YOU approved that Biomass boiler and now I can't sit in my back yard because the smell and the smoke is so bad. WHAT are YOU going to do about it?"

Hmmmm, what to do? What to do?

Now the Government, in their infinite wisdom, decided to decide to make a stab at avoiding this nasty set of circumstances. And believe it or not - they changed the RHI legislation. (WHAT a concept!)

What they said was - that IF you want to collect the RHI Subsidy (and we ALL want to do that) then you actually had to burn a fuel, that was the SAME as the fuel used when the boiler was tested in the factory. ESPECIALLY in terms of Moisture content. (They make 3 separate references to that aspect - so it must be rather important to them.) The Hew and Improved RHI now requires an emission certificate, mandating the quality of fuel that was used during the emission testing, and a maximum moisture content that the fuel is allowed to contain, in order to keep the emissions at the stated levels.

There's only 1 tiny little problem with this. By and large - biomass boilers are tested with fuel that is typically dried to less than 20% moisture content. You see, air quality is directly proportional to moisture content. The more wet stuff there is, the more nasty bits fly out of the top of the chimney. Needless to say, less is more.

The tiny little problem is that with the exception of a few micro-enterprises that actually kiln dry wood chips, THERE ARE NO UK SUPPLIERS of dry chips.

So - now we have a market, ripe for the picking. The government has implemented Legislation, that one could reasonably assume is designed to ensure that Biomass systems emit the lowest possible amount of nasty stuff into the atmosphere for you, I, and everyone else to breathe. One challenge is, that drying wood chips comes at a cost, and while there are some benefits to the end user, often times the cost-benefit doesn't add up. You have to bring more than just higher efficiency, to get the attention of the market. Our Smokeless fuel does just that. Not only does it burn cleaner, for longer, it also reduces emissions, reduces maintenance (lower fly-ash content) and increases the longevity of system components. I think that everyone will appreciate that these benefits are worthwhile.

This is where we come in. You see - when you run the feedstock through our system, not only does it significantly reduce the moisture content, but it goes one step further, and removes most of the smoke-causing volatiles as well. Having said that, I started looking at less expensive alternatives to "natural" wood chips. Lo and behold - up pops "Post Consume Wood Products" (Aka - Construction Demolition Timber, windows, time ex'd furniture, etc.). EUREKA! I shouted - but the joyous celebrations were to only last a short period of time.

As luck would have it, it would seem that we weren't the first people on this planet to recognise that you could grind up this stuff, and burn it in biomass boilers. (I know . . . I was just as surprised as you are.)

It didn't take too many conversations with recycling companies to realise that the plan was leading to a dead end, and that we'd have to be somewhat more creative in our thinking. HOWEVER (and there's always an "however") even though they couldn't supply us with Grade A reclaimed wood chips, they would LOVE to supply us with Grade B. Hmmmmmmm . . . What on EARTH is "Grade B"?

It turns out that Grade B is the same stuff as Grade A, (pre loved articles of lignocellulosic biomass) only, but it has a couple of friends along for the ride. These friends are things like Paints, Stains, Glues, and other aromatics. In their current condition - they are classed as "waste" - and for many people - need to be disposed of at a landfill, at a cost of £71.00 per tonne for the landfill tax. (we told these folks that we would be happy to get rid of their problem for a lot less than that!)

Here's where it gets interesting . . . . You'll remember that I said our technology was able to remove the smoke causing bits in virgin wood? Well, as fortune would have it - the technology also can remove the friends that are along for the ride with the recycled wood. PRESTO! we change the material from a waste product - into a fuel product (Something about residue to revenue) Imagine THAT!

In the end, our focus is now on this value chain. The Pilot Plant will arrive Mid-February; be commissioned by March 1st; and start operations shortly thereafter. (I have already put a picture of myself on the dining room table so my children can remember what I look like, because I don't think I'll leave the refinery for a while, once it's up and running. ;-)

Time to go and dust off my hard hat and high-visibility vest . . . I'm going to need them soon.

Be well.

RW








2 comments:

  1. I like your style ;)
    Congrats on your system going live!
    Keep us posted, And I enjoy your blog and think like you do.
    Keep it real and never give up!!!

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  2. Memory of politics is short, about one or two election periods I guess. A while ago, the 1930's, gasifiers where popular on cars and sellers of such devices claimed it could run on anything (carbon). Of course it can, if you know how to, but the average Joe doesn't. So government came up with exactly the same type of rules for fuels to be branded fit for burning in gasifiers for use on automobiles.
    In getting to the market, would referring to that "good ol' times" not be a excellent marketing point?

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