BIOENERGY BIOENERGY The Rebirth of the Pellet Industry in Russia According to data quoted at the WSED European Pellet Conference in WEls, Austria (February 25-26, 2015), the pellet output in Russia increases by 10-15% every year. Since 2014, the production of pellets and their export to the EU has become profitable even for facilities located in East Siberia; therefore, many companies of other profiles began to invest in pellet manufacturing. The annual Russian export is about 1,000,000 tons of pellets mainly to the European Union (97%). The South Korean market comes second, but it is not as large as the European one (2%). At the beginning of 2014 Russia already had 12 large pellet mills exporting from 20,000 to 300,000 tons of pellets per year (Table 1). Table 1. Russia's largest exporters of wood fuel pellets from July 2013 till June 2014, tonns Vyborg Forest Corporation, Leningrad region 300,000 SP Arkaim, Khabarovsk region Novoeniseisky LHK, Krasnoyarsk region 70,000 50,000 Mir Granul, Leningrad region 45,000 Lesozavod-25, Archangelsk region 45,000 DOK Enisey, Krasnoyarsk region 45,000 Severo-Zapadny Holding, Leningrad region 40,000 Svedwood Tikhvin, Leningrad region 35,000 Russian Pellet Alliance, Karelia 30,000 Setnovo, Novgorod region 20,000 STOD, Tver region 20,000 Russian Pellets, Mary El 20,000 Source: Infobio Information Agency The exports mainly consist of industrial pellets (pellets intended primarily for burning at high- capacity co-generation plants, that meet the new ENplus-B standard, Table 2), but over the last 1.5 years, already four Russian pellet mills were successfully certified to the EN plus standard, and are exporting pellets of the ENplus-A1 class (white pellets, often called premium class pellets, for use in small-capacity pellet boilers, mainly in private residences) to the EU. Russia's first specialized transshipment and warehouse complex at the port of Ust-Luga in Leningrad Oblast, near the Estonian border, deserves a special note. It started operating only in 2014, but has already become No. 3 among all of Russia's essential ports shipping pellets for export (fig. 1). Four new large pellet mills were started up in 2014: DOTS+ LLC (Bryansk), 80,000 tons of pellets per year. Arkhangelsky LDK-3 JSC (Arkhangelsk Oblast), 100,000 tons of pellets per year. According to the press service of the Governor of Arkhangelsk Oblast, in accordance with the thermal energy development concept approved by the regional government in November 2014, the output of wood fuel pellets in the region must reach 500,000 tons/year by 2020. Lesresurs LLC (Irkutsk Oblast), 30,000 tons of pellets per year. Several mills have already been constructed in Irklutsk Oblast, for an output of 30,000 tons of pellets per year and more. In 2015, a few more mills will be commissioned, and in the next year 2016, the pellet output in the oblast will reach 500,00 tons/year. Pellets are exported from Irkutsk Oblast both to the EU and to South Korea. Bionet JSC (Arkhangelsk Oblast), 150,000 tons of lignum pellets per year. The reserves of hydrolyzed lignin in the Russian Federation estimated at dozens of millions of tons are comparable to other timber processing waste like bark, sawdust and so on, but most interestingly, their difference is in their more homogeneous nature, and above all in their higher concentration (in dumps near hydrolysis plants). Most hydrolysis and biochemical plants dispose of their lignin in dumps, thus polluting large areas, which creates problems both for the environment and for the enterprise. Many European specialists visiting such plants emphasize that they have not seen such colossal concentrations of unused energy raw material anywhere in Europe. In Nizhny Novgorod Oblast, German pellet maker German Pellets (the largest in Europe) announced its contribution to and funding of the construction of a pellet mill with a capacity of 500,000 tons/ year. It may be concluded that the manufacturing of pellets in Russia and their shipping to its buyers in the EU are quite profitable for the company. One more factor to be considered is that Germany, and other European countries too, have faced big problems with quality raw materials, in terms of both available quantities and prices that are continually rising. Taras V. Shevchenko, associate CEO of the Sayano- Shushenskaya HPP, RusHydro JSC, told us about a very interesting project of pellet making from timber already submerged or sinking at hydro powerplants in the Krasnoyarsk Territory. The purpose of the project is to completely clean the HPP reservoir of wood residues in 10 years; to gain economic advantage from processing abandoned timber left after HPP construction and during forest husbandry work; to improve the environmental situation; to reduce the indirect costs related to HPP structures' protection from free-floating logs and the manufacture of solid biofuel. Experts estimate the abandoned timber floating in the HPP basin at 1.5 to 2 million m³. This volume of wood is sufficient to make 500,000 to 700,000 tons of quality pellets or briquettes. Most experts agree that biomass is the most promising type of renewable energy sources (RES) for Russia today. They believe this should be developed as an integrated solution for waste disposal. The highest potential for bioenergy in the RF is waste disposal in the timber processing and agro-industrial sectors, food industry, and domestic waste (the total industrial biomass potential in the RF being 15,00-20,000 MW; for comparison, the capacity of all nuclear powerplants in Russia was 23,643 MW in 2011). It should be noted that investors have already noticed the potential of the bioenergy sector in Russia. For instance, according to the consultancy company Rosbioconsulting, the accumulated investments in bioenergy have grown 18-20 times over the last ten years. As of 2010, the investments in bioenergy amounted to about 30 billion rubles, or 88-90% of the total investment in RES in the country. According to the National Union for Bioenergy, RES and Ecology, Russia's potential volume of timber processing industry waste is about 200 million cu. m/year, and the annual industrial and domestic waste to be used for energy generation is about 165 million tons. Among the main obstacles for bioenergy development in Russia are the lack of a governmental support system, lack of Russian RES standards, relatively low electric and thermal energy charge rates (although these have noticeably grown over the recent years), and above all, problems with investments in Table 2. Standards adopted today in the ENplus classification of wood fuel pellets Diameter Length Bulk density Calorific value Humidity Parameter Group mm mm 3.15 L40 ENplus-A1 ENplus-A2 ENplus-B 6(±1) or 8(+1) 6(±1) or 8(±1) 6(±1) or 8(+1) 3.15 L≤40 3.15 L40 kg/m³ > 600 > 600 > 600 MJ/kg > 16.5 > 16.3 > 16.0 % < 10 <10 < 10 Dust (<3.15 mm) Mechanical strength % < 1 <1 < 1 % > 97.5 > 97.5 > 96.5 Ash content (for ash temperature of 550°C) Ash softening temperature Chlorine % < 0.7 < 1.5 <3.0 °C > 1200 > 1100 > 1100 % < 0.02 < 0.02 < 0.04 % < 0.03 < 0.03 < 0.04 Nitrogen % < 0.3 < 0.5 <1.0 Copper content Chromium mg/kg < 10 < 10 < 10 mg/kg < 10 <10 <10 Arsenic mg/kg < 1 < 1 < 1 Cadmium content mg/kg < 0.5 < 0.5 < 0.5 Mercury Lead mg/kg < 0.1 < 0.1 < 0.1 mg/kg < 10 < 10 <10 Nickel Zinc mg/kg < 10 < 10 < 10 mg/kg < 100 < 100 < 100 Sulfur projects having a payback period of 10 to 15 years, which is often too long a time given the real situation in Russia, especially today's reality of sanctions implemented against Russia by the EU and the Western world in general. Currently, the RF Ministry of Energy is developing the draft resolution "Amendments to some acts of the Russian Federation Governments on encouraging the use of RES on the wholesale electricity and power market." The Government of the RF has adopted an integrated program of bioenergy development and in particular of the use of vegetable biomass in the RF until 2020. In all, 367 billion rubles will be allocated for its support. The document envisages setting up a technological and engineering basis for bioenergy development, support for engineering efforts and equipment manufacturing, and support to regional programs for the use of biomass in decentralized energy supply. Just recently, Vice Premier Arkady Dvorkovich approved the "Plan of Bioenergy Development in the Russian Federation." The Ministry of Natural Resources is the main executive agency for the plan, implementing several essential activities to promote bioenergy development in Russia. Its premise is that the Russian potential for the development of this sector of the economy is tremendous. The timber reserves in the forests are 82 billion cu. m (over one quarter of the world reserves). The annual timber harvesting exceeds 500 million m³. Today, 40-60 m³ of timber sawing waste on average is left on each hectare of felling. The waste of timber harvesting and timber processing facilities may be recycled into fuel pellets, briquettes or fuel chips. According to expert data, over 80 million cu. m of wood biomass is generated in the Russian Federation in one form or another. This is logging residues on forest sites, low-value hardwood left standing, and timber production waste (chips and dust). This Fig. 1. The main export points in Russia from January till June 2014, tonns Petrozavodsk Vanino 5200 6854 10620 Nebolchi Bryansk 14386 Arkhangelsk 15275 18829 Ust-Luga Vyborg 102427 St. Petersburg 102427 0 20000 40000 60000 80000 120000 100000 Source: Infobio Information Agency 60 #6 (2015) RUSSIAN FORESTRY RUSSIAN #6 (2015) 61 FORESTRY

Russian Forestry and Wood Supply Operations Analysis

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