Isramart : RWE to Build World’s Largest Pellet Plant to Cut Carbon Output

Isramart news:
RWE AG, Germany’s second-largest utility, will build the world’s biggest plant for wood pellets in the U.S. state of Georgia, allowing it to lower carbon- dioxide emissions at a Dutch power plant.

The company will spend about 120 million euros ($170 million) on the facility, which will have an annual capacity of 750,000 metric tons and start in 2011, Essen, Germany-based RWE said today. The pellets will be shipped to the Netherlands to supplement hard coal at the 1,245-megawatt Amercentrale station.

RWE, Europe’s largest corporate emitter of the gas blamed for global warming, is seeking to lower emission and boost power generation as the cost of polluting rises. Using biomass in power plants is only profitable if the utility has control over its fuel supply, Leonhard Birnbaum, RWE’s chief strategy officer, said today at a press briefing.

“If you don’t control the value chain, you can’t make money in biomass, at least not in the mid- and long-term,” Birnbaum said in Berlin, where he’s attending the Handelsblatt Euroforum energy conference. “You’ll see more of this.”

Construction Start

The wood will come from local landowners, according to Hans Buenting, a board member at RWE’s renewable energy unit. Construction will begin in March or April and the company expects the facility to reach full capacity within a year of beginning output, he said.

The wooden pellets can generate an average 5 megawatt-hours per ton and about 8 megawatt-hours when fired with hard coal, Birnbaum said. That’s less than the 9 to 10 megawatt-hours for the average German hard-coal generator, he added.

The supply will allow the company to raise the amount of biomass used at the Dutch plant to 50 percent in the “mid- term” from 30 percent now, Birnbaum said. Hard-coal is cheaper than biomass, he said.

The plant will be built with developer BMC Management AB, RWE said.