By Jim Stirling

Collateral consequences result when one forest industry sector unduly influences another.

That is what has been happening recently with the sawmilling sector in the Cariboo region of British Columbia. The ripple effects from changes to the sawmilling sector have impacted the availability of the traditional raw material used in the manufacture of wood pellets. The situation meant new fibre sources for making pellets were necessary.

Fortunately Pinnacle Renewable Energy, a large industrial wood pellet manufacturing firm, was well advanced with contingency planning.

The company recently completed an approximately $30 million investment package on its production facilities in the Cariboo region, with an emphasis on accommodating a broader-based and more versatile fibre supply architecture. It’s designed to enhance pellet production efficiency and product quality without any interruptions in supply for Pinnacle’s international customers.

The forest industry structure in the Cariboo was very different in 2006 when Pinnacle designed its Williams Lake pellet making facility.

“The plant was designed to use 100 per cent sawmill residuals like sawdust and shavings,” explained Scott Bax, Pinnacle’s chief operating officer.

But the forest products industry in the Cariboo has been subjected to a prolonged period of restructuring culminating in the period between 2016 and 2018. Sawmill closures and production curtailments were contributing to a decrease in and intermittent supply of sawmill residues.

“The dry sawmilling residues were being increasingly replaced by wetter materials with a higher percentage of harvest residuals and slash material,” noted Bax, who is responsible for the safe and cost effective production of quality wood products in Pinnacle’s plants. Pinnacle operates nine industrial wood pellet manufacturing facilities in western Canada and one in Alabama.

“We basically chose to install in our Williams Lake plant a single pass bed dryer manufactured by Stela in Germany,” said Bax. The selection represented a known technology for Pinnacle. The company had installed two Stela bed dryers at its pellet plant in Lavington, B.C. and followed it up more recently with a similar installation at its Smithers, B.C. facility.

“One of the key reasons for installing the bed dryer is that it operates at much lower temperatures, around 110 degrees Celsius, compared with temperatures in some rotary dryers of 500 degrees Celsius,” he explained. “The pellet feedstock spends a longer time and with lower temperatures in the six-metre-wide to 40-metre-long Stela bed dryer.”

Pinnacle says the slower drying approach delivers a raft of advantages to preparing the Williams Lake plant’s new furnish supply for pellet manufacturing. The advantages include the more even drying of the variety of material now being used; the system improves particle dispersion; prevents the over-drying of smaller particles and it lowers fire risks. Low temperature bed drying is also said to have the lowest emission concentrations of any fibre drying technology.

Pinnacle has been very aware throughout the Williams Lake upgrade project to maintain the integrity of the local airshed. The pellet plant is located in an industrial area adjacent to downtown. “Drying at lower temperatures provides an improved emission profile,” notes Bax.

The installation of the new dryer in Williams Lake is supported by other plant improvements and upgrades. These include the installation of two CSE Bliss Manufacturing hammermills designed to better reduce the plant’s coarser fibre mix. A cyclo-filters baghouse system supplied by Allied Blower & Sheet Metal was also installed during the Williams Lake upgrade along with a fire and explosion solution for combustible dust supplied by CV Technology of Jupiter, Florida. Bax gave additional credit to Continental Conveyor crews from Thetford Mines, Quebec which supplied all the chains and conveyors necessary to efficiently link the renovated plant together. “They were exceptional,” he added.

The project provided an opportunity to implement minor upgrades with other plant equipment where needed, including the five Andrtiz biomass pelletizing machines and the GreCon spark detection system. Pinnacle’s Williams Lake plant can now process up to 50,000 additional tonnes of woody debris, material that had typically been left in the bush after logging for burning.

About $10 million of the total Pinnacle invested in the Cariboo region was dedicated to a project at the company’s Meadowbank pellet manufacturing plant located about 40 kilometres north of Quesnel, continued Bax. The prime objective there was to install a new wet electrostatic precipitator supplied through LDX Solutions of Seattle. “It’s an emissions control device that cleans up particulate and non-particulate matter,” he explained.

The project allows Pinnacle to significantly upgrade its environmental controls following the plant’s commissioning in 2011. The project also contributed some incremental production capacity.

The COVID-19 pandemic left its impacts on both the Williams Lake and Meadowbank projects. Bax said COVID necessitated an approximate six-week pause of the Williams Lake upgrade. “The Williams Lake plant is now operating very well,” he reported, on the cusp of the 2020-2021 winter operating season.

The expansion of Pinnacle’s wood fibre capacity in the Williams Lake region has reinvigorated an industry: the chipping, grinding and delivery of harvest residual material and other ground wood fibre sources. Pinnacle has two fibre supply agreements. One is with Tsi Del Biomass Ltd., a subsidiary of the joint venture between the Tsi Del Nation and Tolko Ltd. In turn, Tsi Del Biomass is working with the Williams Lake First Nation to increase utilization of biomass for both groups.

Pinnacle’s other agreement is in the form of a fibre supply deal with the Esk’etemc Nation through Alkali Resource Management, the First Nations’ integrated resource management company.

Pinnacle’s two fibre supply agreements with the First Nations have advantages for all the signatories. Marginal, damaged and dead wood fibre will be converted into valuable products. The land can be re-planted, promoting carbon capture and reducing wild fire risks. And that constitutes a positive collateral consequence.

Pinnacle to be acquired by Drax Group

In a deal announced in early-February that shakes up the wood pellet production market, Pinnacle Renewable Energy Inc. has entered into an agreement with British-based Drax Group plc, which will result in Drax acquiring Pinnacle for $831 million.

“The combination of Pinnacle and Drax will create a global leader in sustainable biomass with the vision, technical expertise and financial strength to help meet the growing demand for renewable energy products around the world,” said Duncan Davies, Pinnacle CEO.

Will Gardiner, Chief Executive Officer of Drax, said the deal will reinforce Drax’s position as the world’s leading sustainable biomass generation and supply business, delivering on its strategy to increase self-supply, reduce its biomass production costs and create a long-term future for sustainable biomass.

Pinnacle is the second largest producer of industrial wood pellets in the world.  The company operates nine production facilities in Western Canada, including six in British Columbia (see attached story) and one in Alabama, with one additional facility under construction in Alabama and more in development. The company also owns a port terminal in Prince Rupert, B.C.

Pinnacle operates 2.5 million tonnes of biomass capacity at its sites in Western Canada and the southeastern U.S., with a further 0.4 million tonnes of capacity in development (to be commissioned in 2021).

Pinnacle has a number of European customers, including Drax.