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May 2003

MILL ENERGY MANAGEMENT

Big energy savings

BC’s Princeton Wood Preservers has found big savings—and a solution to disposing of its wood residue—with a new Etho Power system that converts residue into energy.

By Paul MacDonald

Blair Noel of Princeton Wood Preservers.

When natural gas prices were peaking several years back, mill owners opening their power bills were getting some rude shocks, with operating costs skyrocketing. While natural gas prices have somewhat settled down since then, that spike was enough to spur action on the part of a number of companies to look at energy saving alternatives. The decisive point for Princeton Wood Preservers (PWP) of Princeton, British Columbia was when it started to experience triple digit increases in its natural gas bills. “Over a 24-month period, we saw a 300 per cent increase in the energy costs of running our kiln,” says PWP general manager Blair Noel. “You would think we were running the dry kiln with the doors wide open with those kind of heating bills. We could not afford to pay that much for energy and it was as simple as that.” Unlike some other operations, they do not have the deep pockets of a large corporate parent, being a stand-alone operation.

The company has seen success—it is celebrating its 30th year of operation in 2003—based on a business formula of delivering high quality treated posts, poles and rails produced from local lodgepole pine. It is well-located, being close to agriculture-based areas in both the BC Interior and, to the south, in Washington, Oregon and Idaho. A key part of its success—and survival, for that matter—has been in having control over the entire production process. They bring in the timber, cut it to length, peel it and treat it. And unlike some other preserved wood post producers—which sub-contract out the work—PWP has its own kiln to properly dry out the wood.

The Etho Power system draws heat off to heat the dry kiln at Princeton Wood Preservers.

They have a 50-foot by 72-foot Moore dry kiln. Back in early 2001, the natural gas bills to run the kiln were shooting up, and the company started looking around for alternatives. They reviewed energy systems from overseas and from North America. In the end, they selected a system from a company just a few hours down the highway, Etho Power of Kelowna, BC. Etho Power manufactures advanced gasification systems that convert biomass and hydrocarbon materials into what it terms a “producer gas” that can be used, in the case of PWP, to supplant natural gas.

The company says its technology is designed to enable industrial customers to self-generate low cost energy from small scale plants—up to 10 megawatts—using waste fuels produced from existing operations. That was right where PWP wanted to go. Although they are not extremely far into the operational phase with the Etho Power system, it appears to be working well for the company. The construction of the system, and the associated material transfer equipment, was completed in summer 2001, and it was fired up that September. “We didn’t shut anything down, so it was pretty overwhelming at the time, doing all this work in the middle of all our normal production,” says Noel.

While Etho Power has a somewhat similar unit in place at another BC operation—North Enderby Timber—the PWP system is still considered a prototype. As a result, the unit has been “tweaked” over the last 18 months to ensure it is achieving optimal results. “There have been a number of improvements made over that time,” says Noel. “The people from Etho Power were just in last week to make some further adjustments.” The North Enderby system is basically a burning unit. “This is the first one that Etho Power has built that is drawing heat off to heat dry kilns,” explains Noel. “We are also using different wood waste material than North Enderby.”

An expansion in production at the company further reinforced the need for a long-term residual wood solution.

Some of the adjustments included getting the best possible burn rate so the system uses as much as possible of PWP’s residual wood and getting consistent temperatures in the dry kiln so they get even drying of the wood. “These are general things that would have to be addressed in any operation,” says Noel. “And we went into it knowing there would be some challenges involved with it, so this is not unexpected.” One of the tweakings specific to PWP involved the delivery system. The operation has a fairly elaborate, mill-made feed transfer set-up, which delivers wood material to the energy system at set rates. This is run by PLCs, so some tinkering has been done there, as well.

This particular part of the set-up, to use a computer term, is not exactly plug and play. “It does require some attention,” says Noel. Emissions are very minimal. “It’s running right now,” says Noel, pointing out of his office window to the system. There was only a barely discernible trail of smoke. The system, while it performs well, does require some attention, Noel says. “There is some adjusting to get the proper temperatures for primary and secondary, and there is a lot more to getting it started up.” The switch to using wood waste as a heat source from natural gas has meant a few changes. “We’re happy with the results, but it does heat a bit differently. It seems to be a bit drier heat than what you get with natural gas.” Depending on the moisture content of the wood, they want to achieve a temperature of between 125 degrees and 145 degrees Fahrenheit in the kiln.

Yard supervisor Gary Zieske has worked hard to get very familiar with the equipment. He’s invested time in reasoning out why they get certain results with the energy system—rather than just being satisfied with inputting numbers. “At this point, I’d say he is as knowledgeable as some of the guys at Etho Power.” That depth of knowledge is valuable, Noel adds. The system is still somewhat of a work in progress, but as far as PWP is concerned, it’s doing the job for them quite nicely. Based on current natural gas prices, the company is looking at a payback on their investment of about three years.

 Princeton Wood Preservers generates about 11 million pounds of waste material annually, almost all of which is now consumed with the new power system.

That payback would have been blindingly quick if natural gas prices had remained at their peak. “But three years is reasonable,” says Noel. “Any capital improvement with a payback of 24 to 36 months is worth doing from our perspective.” In addition to the energy savings, there was another important factor at play in the purchase of the system. It solved another problem for the company—the disposal of its residual wood. PWP was incurring some fairly substantial disposal costs for their residual wood, especially since their expansion five years ago.

In busy years, they are now producing up to 50 per cent more volume compared to pre-expansion times. That means handling 30,000 cubic metres of wood now compared to 20,000 cubic metres before. “With that kind of increase in production, you are creating a lot more waste. Every business in the industry is facing this problem and if you don’t deal with it, sooner or later you’ll choke on it.” Depending on the time of the year, farmers and ranchers would take some of the material for livestock bedding material. At PWP, they are peeling the logs, rather than cutting them (as in a sawmill), meaning that most of the waste material is bark. “There is some white wood in the waste material, but not much,” says Noel. “It can’t be used for pulp, particleboard or other engineered wood products.” They are generating about 11 million pounds of waste material annually.

During busy production periods, seven 45 cubic yard boxes of waste material had to be moved from the site each and every day. Disposing of the residual wood actually cost the company money—they had to pay for transporting it and received no payment for the material. “In the past, we were just happy that we had people that would take the waste and be able to use it. But as we got larger, it was becoming more of an issue,” says Noel. “With all the environmental issues that pop up, it was just one more reason to do something longer term with our waste wood.” Fence posts and other treated products are a seasonal business, with peak demand in the spring and fall.

To meet customer demand, PWP often adds extra shifts to their peeling units to build up inventory. There is some waste material that is shipped off site during these brief production periods, but most is now consumed in the Etho Power system. “We might have one or two boxes a day going off site during those times, which is enough to keep a few farmers happy. But it is a small fraction of what we had to move before we installed the energy system.” Having that system in place to handle the waste means that they can now focus more on what they do best—producing treated posts and associated products—rather than having to concern themselves with disposing of wood waste. “It’s nice to have that behind us and not have to worry about it any more,” says Noel.

Keeping operating costs low is key for independent operator Princeton Wood Preservers

While containing operating costs is important for any forestry company, it can be even more critical for medium-sized—and independent—operations like Princeton Wood Preservers (PWP). And like any producer in the forest products industry, the company is now facing some very tough markets. The new Etho Power energy system positions the company well in that regard, says PWP general manager Blair Noel. “It lowers our cost of production, and we need every bit of that because we are in a very competitive marketplace.”

With pulp prices relatively low, chip prices are also low. This means that smaller timber that normally might be chipped is making its way into poles and other products. To battle the increased competition, PWP works to distinguish their products from being considered a commodity, focusing on the quality and the 20- to 30-year lifespan of their posts. “Price is everything for some people out there,” admits Noel. “But it costs us more to do the job properly and oversee the process from start to finish, versus a couple of guys peeling wood, sending it out to be treated and the wood being put in an autoclave where it may not be treated all the way through. Their end product may visually look the same as ours—their posts are green—but the quality is not there.”

 

Growth in BC wine industry creates demand for wood products

While Princeton Wood Preservers (PWP) is working in what might be termed a mature market—treated posts, poles and rails—the company still actively looks at developing new niche markets. Some of their wood now receives more finishing, and they produce furniture-grade non-treated pieces. “That’s a small portion of the business, but it all helps the bottom line,” says general manager Blair Noel. Geographically, their business is split pretty much equally between Western Canada and the western United States.

But they are not necessarily limited to those areas. In the past few years, they have delivered post orders to new customers in Ontario and New York State. PWP has also benefitted from an explosion in the number of vineyards and wineries in BC’s Okanagan region, just a couple of hours down the highway. The past decade has seen the industry grow in leaps and bounds, with an increase in demand for treated poles and stakes for use in the vineyards. “That’s been great,” says Noel. The growth in that industry occurred just as there was a decline in another market, apple orchards. “We were very fortunate that when apples took a downward trend, the business in the vineyards started to pick up.” And there could be an opportunity to leverage that side of the business further through developing the huge vineyard market in California’s Napa Valley.

 

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