AAddison County Pellet ddison County Pellet FFeasibility ... · PDF fileAAddison County Pellet ddison County Pellet FFeasibility Studyeasibility Study Final Report • November 2009

Addison County Pellet Addison County Pellet Feasibility StudyFeasibility Study

Final Report • November 2009

Acknowledgements

Many people contributed to this study by provid-ing their insight, review, and expertise. A steering committee was established and provided guidance throughout the study. These study stakeholders pro-vided essential information and feedback throughout the process, and we thank the Steering Committee Members:

Kevin Behm, Assistant Director, Addison County Regional Planning Commission

Sid Bosworth, Associate Extension Professor, Univer-sity of Vermont

Ted Foster, Co-Owner, Foster Brothers Dairy Farm

Adam Lougee, Executive Director, Addison County Regional Planning Commission

Bob McNary, Addison County Regional Planning Commission – Energy Committee Chair

Harvey Smith, Former Director of Vermont Farm Service Agency and ACRPC Executive Board Member

Chris Olson, Addison County Forester, State of Vermont Department of Forests and Parks

Bill Scott, Chair, Addison County Farm Bureau

Netaka White, BioFuels Director, Vermont Sustainable Jobs Fund

Robin Scheu, Executive Director, Addison County Economic Development Corporation

Special thanks go also to Mike Brouillette at Vermont Center for Geographic Information for the spatial analysis performed for the fi ber assessment and to Scott Sawyer at Vermont Sustainable Jobs Fund for coordinating synergistic efforts on the Vermont Energy Atlas. Nancy Wasserman of Sleeping Lion Associates conducted review of the conceptual pellet mill business fi nancials.

Additional thanks go to the following individuals for their assistance:

Andy Mayer, Executive Director, Addison Chamber of Commerce

Chris Brooks, CEO, Vermont Wood Pellet L.L.C

Brian Terry, General Manager, Curran Energy L.L.C

Duncan Harris, Redstone Real Estate

Disclaimer

This report presents the best effort to determine, conceptually, whether a pellet fuel manufacturing business could be established in Addison County and if so what the optimal sized business would be. None of the information contained in this report is specifi c to any particular business or project. All information and conclusions drawn are conceptual in nature and should not be construed as professional assessment of the viability of any specifi c project.

Biomass Energy Resource Center

The mission of the Biomass Energy Resource Center (BERC) is to achieve a healthier environment, strengthen local economies, and increase energy se-curity across the United States by developing sustain-able biomass energy systems at the community level.

BERC is an independent, national nonprofi t organiza-tion that assists communities, colleges and universi-ties, schools, state and local governments, businesses, utilities, and others in making the most of their local energy resources. With expertise in institutional and community-scale wood energy systems, BERC helps initiate and implement biomass projects for heating and power needs.

Printed on 100% post-consumer recycled paper manufactured using 100% wind-generated electricity.

© Copyright November 2009 Biomass Energy Resource Center. All rights reserved.

Addison County Pellet Feasibility Study

Final Report • November 2009

Contents

Executive Summary 1

1.0 Introduction 4

2.0 Study Scope 5

3.0 Methods 7

4.0 Introduction to Pellets 8

5.0 Wood Fiber Assessment

for Addison County 12

6.0 Agricultural Fiber Assessment


7.0 Potential Pellet Mill Site

Identifi cation 48

8.0 Pellet Fuel Market Assessment


9.0 Pellet Fuel Manufacturing

Business Overview 69

10.0 Study Conclusions 82

11.0 Appendices

Page BERC Final Report on Addison County Pellet Feasibility Study1

The Town of Bridport and the Addison Coun-

ty Regional Planning Commission (ACRPC)

received a Vermont Community Development

Program – Planning Grant from the State of

Vermont. They hired Biomass Energy Re-

source Center (BERC) to assess the feasibility

of locating a pellet mill in Addison County and

to determine to what extent fi bers for mak-

ing pellets could be sourced from within the

county and pellet fuel could be sold locally to

serve the Addison County heating market.

The scope of work includes an estimation of

wood and agricultural fi ber availability and

pricing, identifi cation of sites for a potential

bio-fi ber fuel production plant, an assessment

of the pellet fuel market in Addison County,

and an overview of a pellet fuel manufacturing

business including site layout and capital costs.

FIBER SUPPLY

Pellet fuel is nearly completely dry whereas

freshly cut wood or grass contains signifi cant

moisture levels. Any pellet mill using green

wood fi ber as its primary ingredient requires

nearly twice as much input material than its

production of pellets. The major difference is

water weight lost in drying.

Addison County covers 516,895 acres in

total, of which 230,268 acres or 45 percent

are forested and 133,946 acres or 25 percent

are under agricultural uses. The remainder is

mostly developed areas and bodies of water.

Small volumes of wood residues from sawmills,

secondary wood processing, and communi-

ties exist, but are either in high demand, have

a dwindling supply, or are not ideal for pellet

making. In order to use wood fi ber for pellet

making, any facility will require an abundant,

stable supply. Therefore, a very large majority of

the wood fi ber will be sourced from harvested

low-grade wood from local forests. Detailed

analysis of the forest wood fi ber available in Ad-

dison County concluded that there is less than

100,000 green tons of low-grade wood suitable

for wood fuel production on an accessible and

presumably managed footprint of forestland.

When current demand for residential fi rewood,

pulp fi ber, and biomass for energy are subtract-

ed, less than 20,000 green tons remain in excess

capacity. If a pellet mill were built in Addison

County and the owners looked to source its

wood exclusively from within Addison County,

it would signifi cantly limit the size of the pellet

mill to the lower end of the normal pellet mill

size spectrum. It should be noted that a typical

sized pellet mill would likely draw upon several

counties for its fi ber supply not exclusively Ad-

dison County. If a larger procurement area were

used, a dramatically larger pellet mill could be

supported with wood fi ber.

Wood is not the only fi ber from which pellets

can be made. Agricultural materials such as

grass can be made into pellets; for this reason,

the study also included analysis of the potential

for agricultural fi bers to supplement the supply

of wood. In any given year there are signifi cant

amounts of “waste” hay (hay unsuitable for

animal feed) produced each year in Addison

County. However, due to the highly variable

weather from year to year, the exact amount

produced annually fl uctuates widely. In addi-

tion, the potential for dedicated energy crops

(primarily grasses) were modeled. This analysis

concluded there is far greater capacity to grow

agricultural fi ber than there is sustainable sup-

ply of wood fi ber(beyond existing demand for

wood fuel)—conservative scenarios targeting

small percentages of under-utilized farm land

yielded amounts of fi ber equal to the modest

amounts available from forests in the county.

Executive Summary

Study purpose:

• to assess the fea-

sibility of locating

a pellet mill in

Addison County

• to determine to

what extent fi bers

for making pellets

could be sourced

from within the

county and pel-

let fuel could be

sold locally to

serve the Addison

County heating

market

BERC Final Report on Addison County Pellet Feasibility Study Page 2

However, while the in-county potential is

greater for grass than for wood, the pellet mill

business model does not currently support us-

ing more grass than wood fi ber. There are two

main reasons why—grass costs on average 72

percent more than wood fi ber and grass fi bers

contain on average four to six times greater

levels of ash causing minerals. The large ma-

jority of the pellet purchasing market wants

low-price and low ash pellet fuel with excel-

lent performance and convenience. Therefore,

at the current time, agricultural fi bers cannot

compete in the market with wood fi ber and

should only be considered a short term rem-

edy to fi ll supply holes in the wood supply. As

the markets change over time, grass may prove

a more viable option.

Left only with wood fi ber, the local resources

of Addison County could not fully support a

small pellet mill (3 tons per hour capacity) pro-

ducing approximately 10,000 tons of saleable

pellets annually. A more likely scenario of draw-

ing wood from surrounding counties in ad-

dition to Addison County would signifi cantly

increase the viability of fi ber supply for a larger

pellet mill (6 or 12 ton per hour capacity).

PELLET MILL LOCATIONS

Pellet mills are fairly similar to sawmills in their

facility size, nature of operation, and siting

requirements. By reviewing industrial zoned

parcels fi ve acres and larger, this study identi-

fi ed multiple locations for a possible pellet mill

in Addison County. The scope was narrowed

by reviewing truck access, distance to neigh-

bors, access to rail spurs, distance to three-

phase electricity, and current use compatibility

to select the fi ve best sites1. These were, in no

particular order:

• Undeveloped farmland adjacent to the

Vermont Natural Ag Products composting

operation

• Undeveloped land located on Industrial

Ave in the Middlebury Industrial Park

• Integrated at the former Claire Lathrup

Bandmill site in Bristol

• Integrated with the A Johnson Company’s

active sawmill operation in Bristol

• Integrated with the current feed mill opera-

tions at the old White Pigment mill in New

Haven

Most of the sites identifi ed above could sup-

port 3 or 6 ton per hour pellet mills, however

only the largest parcels could support a full 12

ton per hour pellet mill.

PELLET FUEL MARKET

At roughly 2.4 percent of the total heating

market, the current commercial and residen-

tial markets for pellet heating fuels in Addison

County are in their infancy, but the market

potential for further conversion to pellet-based

heating is strong. Analysis of Addison County

commercial and residential heating concluded

that there is insuffi cient current market within

Addison County alone to support even a small

pellet mill. However, further analysis of pro-

jected pellet heating market growth concluded

a more than 600 percent increase in Addison’s

pellet market would be necessary to support

a small pellet mill producing 10,000 tons an-

nually. Like the fi ber assessment, the market

study found that while the current in-county

market for pellet sales is rather small, extend-

ing distribution to include both Chittenden

and Rutland Counties would dramatically in-

crease the size pellet mill that could be viable.

1 There are numerous other possible sites that could possibly support a pellet mill in Addison County. The list presented above is intended to present the best fi ve sites of those identifi ed in this search and not intended to be an exhaustive list.


A small online survey of Addison County resi-

dents and businesses showed that considerable

interest exists in converting to pellet-based

heating. However, most of those surveyed

need less than a four-year simple payback on

the investment to install the pellet heating

appliance and a reliable source of pellets. At

today’s heating oil price of $2.50 per gallon,

a typical payback period for installing a pellet

heating appliance would be 5.3 years (only

3.7 years with current tax incentives). Whereas

at $4.50 per gallon heating oil, this payback

period would be cut in half. Survey responses

from Addison County residents and businesses

support the conclusion that dramatic expan-

sion of the current pellet market would occur

should the price of oil and propane rebound to

their 2008 levels.

CONCLUSIONS

Based upon the results of this fi ber resource

assessment, the potential site location review,

and the market assessment, BERC concludes

that a pellet mill producing 10,000 tons per

year is the optimum sized pellet manufactur-

ing facility to serve Addison County. However,

it is important to note that should a business

envision a larger fi ber procurement area and

larger product distribution area, Addison

County could support a larger pellet mill—up

to 50,000 tons per year in capacity.

Development and examination of conceptual

business pro forma fi nancials for three differ-

ent sized pellet mills indicated that the largest

pellet mill (capable of producing upward of

90,000 tons per year) produced the greatest

fi nancial rate of return while the smaller pellet

mill size (10,000 tons per year) yielded a very

modest yet still positive return on investment.

Pellet Mill Pellet Mill Operational Output

Size Design Capacity Capacity Range2

Small 3 tons per hour 7,200 to 21,600 tons per year

Medium 6 tons per hour 14,400 to 43,200 tons per year

Large 12 tons per hour 28,800 to 86,400 tons per year

2 Variables include the number of eight hour shifts per day and the number of days per year the mill operates.


1.1 PROJECT OVERVIEW

The Town of Bridport, Vermont and the Ad-

dison County Regional Planning Commission

(ACRPC) received a Vermont Community

Development Program Planning Grant from

the State of Vermont to assess the feasibility

of a solid bio-fuel production facility to be

located in and draw feedstock from Addison

County. They hired Biomass Energy Resource

Center (BERC) to do this assessment. The fol-

lowing report details the fi ndings of the study.

1.2 PROJECT PARTNERS

1.2.1 Addison County Regional Planning

Commission. ACRPC has 21 member com-

munities and assists these communities by pro-

viding a forum for towns to discuss and resolve

mutual concerns, providing assistance to towns

with the planning process and information

gathering, and developing a regional plan.

1.2.2 Biomass Energy Resource Center.

BERC is an independent, national nonprofi t

organization located in Montpelier, Vermont

with a Midwest offi ce in Madison, Wiscon-

sin. BERC assists communities, colleges and

universities, state and local governments, busi-

nesses, utilities, schools, and others in making

the most of their local energy resources.

BERC is a project-focused organization whose

mission is to achieve a healthier environment,

strengthen local economies, and increase en-

ergy security across the United States through

the development of sustainable biomass energy

systems at the community level. BERC’s par-

ticular focus is on the use of woody biomass

and other pelletizable biomass fuels.

1.0 Introduction

Page BERC Final Report on Addison County Pellet Feasibility Study

The study area for this assessment included

all 23 towns of Addison County (shown in

the map below): Addison, Bridport, Bristol,

Cornwall, Ferrisburg, Goshen, Granville, Han-

cock, Leicester, Lincoln, Middlebury, Monk-

ton, New Haven, Orwell, Panton, Ripton,

Salisbury, Shoreham, Starksboro, Vergennes,

Waltham, Weybridge, and Whiting. Both the

forest- and agricultural-fi ber analyses reported

here give acreages and tonnages for all 23

towns.3

While 23 towns may seem like a large geo-

graphic area, it is a relatively small area when

the radius of a circle is overlaid and the dis-

tance measured. Addison County covers 808

square miles and its entire area can be covered

within a 20-mile radius from the center of the

county (see Figure 1 at left).

The emphasis of this study was to determine

the viability of an atypical pellet fuel produc-

tion facility that would draw upon the fi ber re-

sources only from within Addison County and

aim to meet the pellet fuel heating needs of

only Addison County. In a time when the typi-

cal pellet mill business template is large-scale

production drawing upon a large fi ber basket

and selling pellets regionally and even export-

ing product overseas, the concept of a smaller-

scale pellet mill, drawing upon a smaller area

for source fi ber and distributing pellets locally,

bucks the growing trend.

5

2.0 Study Scope

Figure 1. The study

area for this assess-

ment included all

23 towns of Addi-

son County.

3 ACRPC serves 21 of the 23 towns in the county, excluding Granville and Hancock for practical geographic reasons, since Granville and Hancock fall on the eastern side of the Green Mountains. They more easily access and interact with other neighboring towns.


BERC conducted a county-wide assessment to

quantify, at the town level, the available and

potential bio-fi bers that could be used as pellet

feedstocks for this pellet mill. The study in-

cluded both wood fi bers and the potential for

agricultural fi bers. Average pricing and poten-

tial impacts on pricing were also considered.

Other waste materials were not quantifi ed

due to the uncertainty of their performance

as marketable pellet fuel. The study included

market surveys and analysis of census data to

determine the size of the potential market for

pellet fuel within Addison County.

The best sites were identifi ed within the coun-

ty for a solid bio-fuel production facility to be

located in and draw feedstock from within the

county. Pro forma fi nancials were developed

and assessed for three different sized pellet

mills based on pellet mill capital costs, produc-

tion costs, and market projections.

From the fi ber assessments, the site review,

the market assessment, and the review of the

pro forma fi nancials for three different sizes

of pellet mill, conclusions were drawn on the

optimally sized facility suitable for Addison

County.

PELLET MILL SIZE, CAPACITY & OUTPUT

Pellet Mill Pellet Mill Operational Output

Size Design Capacity Capacity Range4

Small 3 tons per hour 7,200 to 21,600 tons per year

Medium 6 tons per hour 14,400 to 43,200 tons per year

Large 12 tons per hour 28,800 to 86,400 tons per year

4 Variables include the number of eight hour shifts per day and the number of days per year the mill operates.

Figure 2.


The project methods are outlined in summary

below. Full descriptions of methods used are

provided in detail within the respective sec-

tions of this report.

1. FIBER ASSESSMENT

a. Wood fi ber assessment. Best available

data on forestland area, forestland owner-

ship, forest inventory, forest growth, and

harvesting were assembled and entered into

a custom model designed to calculate the

amount of surplus wood fi ber at the town

level.

b. Agricultural fi ber assessment. Best

available data on agricultural land area,

agricultural land use classifi cation, and

dedicated energy crop yield were assembled

and entered into a custom model to exam-

ine the dedicated energy crop yield capacity

in Addison County at the town level.

2. IDENTIFICATION OF POTENTIAL

SITES FOR A PELLET MANUFACTUR-

ING FACILITY

a. Digitized town zoning maps were assembled and standardized to identify industrial zoned sites of fi ve acres or larger. Preliminary sites identifi ed were

further assessed to determine viability based

on location, truck and electric access, access

to rail, distance to nearest neighbors, and

compatibility with existing and/or historic

site use.

3. MARKET STUDY

a. Quantifi cation of the existing and potential residential market for pellet fuel. Data were assembled and reviewed.

Scenarios of possible market expansion

were explored based on fossil fuel heating

prices and simple payback on installing pel-

let heating equipment. Residential survey

responses were used to supplement the data

gathered.

b. Quantifi cation of the existing and potential commercial market for pellet fuel. Data were assembled and reviewed.

Scenarios of possible market expansion

were explored based on fossil fuel heating

prices and simple payback on installing pel-

let heating equipment. Commercial survey

responses were used to supplement the data

gathered.

4. DEVELOPMENT AND ASSESSMENT

OF PRO FORMA FINANCIALS FOR

VARIOUS SIZES OF PELLET MILLS

a. Projected capital costs, year one cash fl ow, and 10-year pro forma fi nancials were developed for three different sizes of pellet mill using information from pel-

let industry experts, published reports, and

pellet mill owners and operators.

3.0 Methods


4.1 PELLET OVERVIEW

To introduce the framework for this study, a

general discussion of pellet fuel is given in this

section of the report, including the fuel’s char-

acteristics, specifi cations, and the advantages to

using pelletized biomass fuels.

4.1.1 Description of Pellet Fuel. Fuel pellets

can be made from a wide variety of biomass

materials. Pellets are usually manufactured

out of by-product wood fi bers from the forest

products industry, such as sawdust and shav-

ings, which are dried and extruded through

pellet dies under high heat and pressure.

Pellets can also be made using woodchips

and/or non-woody plant material. Nation-

ally, and even in Vermont where forests cover

78 percent of the land area, there is growing

interest in the development of biomass fuel

pellets made from agricultural feedstocks such

as crops like grass or residues like corn sto-

ver or oat hulls. The recommended biomass

feedstock depends on the cost of the fuel, the

size of the facility, its heat load, boiler type and

size, and other factors.

Wood and agricultural biomass is generally

processed or densifi ed into pellets, cubes, or

briquettes. While sometimes small amounts of

binders or lubricants are added to the mate-

rial, pellets can be made without the use of any

additives. Natural plant lignin in the pelletized

material is melted by the friction heat created

as material is extruded through the pellet die,

creating a durable casing that holds the pellets

together without glues or additives.

4.0 Introduction to Pellets

Pellets are a

uniform size and

shape, making

them easier to

store and use than

other biomass

fuels.


4.1.2 Advantages to Heating with Pellets.

Biomass fuels such as pellets help to mitigate

environmental issues like acid rain and global

climate change. Perhaps the greatest advan-

tage to biomass fuels, however, is they cost on

average 25-50 percent less than traditional fos-

sil heating fuels and are more stable in pricing.

Also, any future carbon or energy taxes are

less likely to increase the cost of biomass fuels

and are more likely to raise the cost of heating

with fossil fuels. Pellets are a locally-available

and cost-effective biomass heating fuel, with

several advantages over other types of biomass

fuels. Pellets are a condensed form of biomass

energy available in a uniformly sized package,

which makes them easier to store and use than

some other biomass fuels. The technology is

also quite simple, minimizing operation and

maintenance requirements. In addition,

pellets:

• have a high energy content by volume and

can be bulk stored in less space than other

biomass fuels;

• are a clean-burning renewable fuel source

and the technology is highly effi cient com-

pared to other biomass fuels;

• are price stable compared to fossil fuels.

4.1.3 Pellet Fuel Markets. Wood pellets

are manufactured in the US and Canada and

are available for residential use in 40-pound

bags which can be bought in hardware or

feed stores, nurseries, or other supply stores.

Increasingly, heating with pellets is becom-

ing common on larger scales—in municipal or

federal buildings, educational facilities, hous-

ing complexes, offi ce buildings, and other

businesses.

While the majority of installations in this size

range are in Europe, a growing number are in

North America, including New England. The

greater heating requirements of these build-

ings differ from those of residential settings,

thus requiring different technology (boilers

rather than stoves) and fuel supply infrastruc-

ture (bulk wood pellet supply as opposed to

bags).

When heating oil prices began their rapid rise

in 2006 there was a resulting surge of mar-

ket growth in the northeastern US, where

oil heating is very prevalent, for both pellet

heating appliances (mostly stoves) and for the

pellet fuel itself. For the past two years there

have been reports of long waiting periods for

shipment of pellet stoves and shortages of

pellet fuel. Today, only a small portion of the

pellets burned in Vermont come from within

New England. Signifi cant volumes of pellets

are imported into the region from the Rocky

Mountain Region, British Columbia, and

Quebec.

4.1.4 The Importance of Local and

Sustainable Biomass Fuel. The benefi ts to

heating with biomass fuels described above

are best achieved when the feedstock is

sourced locally and sustainably. In response

to increased pellet fuel heating and increased

demand for pellet fuel in Vermont, several

pellet mills have been proposed in the state.

By producing pellets in Addison County from

locally- and sustainably-procured forest and

agricultural feedstocks, greater energy security

and self-suffi ciency can be achieved.


4.2 PELLET QUALITY

Pellet fuel quality can range widely depend-

ing on the source materials and manufactur-

ing process control. There are many different

species and sources of feedstock and many

ways in which the material can be harvested,

processed, loaded, transported, and received,

all of which can impact the overall quality of

the pellet and thereby the successful operation

of the pellet heating system. The performance

of pellet heating systems is optimized by using

a high-quality fuel designed for the heating

equipment.

4.2.1 Pellet Fuel Specifi cations. Pellets

provide clean, consistent, and uniformly-sized

fuel. Ensuring that pellet fuel is up to certain

standards means fewer mechanical jams, less

ash produced (and therefore less time spent on

removing ash), and longer periods of mainte-

nance-free burn time. The Pellet Fuels Institute

(PFI) is a national organization that promotes

the use of pellet fuels and has established stan-

dards governing the quality of pellet fuels sold

on the market. Figure 3 illustrates the pellet

fuel quality parameters for the four main grades

of pellet fuels as designated by PFI.

4.2.2 Discussion of Pellet Quality

Parameters.

Size — Fuel pellets are of uniform size and

shape (between 1 or 1 ½ inches in length by

approximately ¼ - 5/16 inches in diameter),

making them easy to store and use in fuel

auguring systems. Pellets also take up much

less space in storage than other biomass fuels

because they are relatively dry and densi-

fi ed compared to other biomass fuels such as

woodchips.

Moisture Content — Pellets typically have

moisture content between four and six per-

cent. If pellets are stored improperly and are

remoistened, many issues are created.

Energy Content (Btu Value) — Pellets have

a higher energy content by weight (roughly

8,084 Btu per pound at six percent moisture

content) than woodchips (roughly 4,500

– 5,000 Btu per lb at 50 percent moisture)

and other non-densifi ed biomass fuels. Pellets

should contain a minimum of 8,000 Btu per

dry pound.

PFI PELLET QUALITY STANDARDS

Super Premium Wood fi ber 6-8mm <6% >8,000 Btu/lb <0.5% 40-46lbs/ft3 <0.5%

Premium Wood fi ber 6-8mm <8% >8,000 Btu/lb <1.0% 40-46lbs/ft3 <0.5%

Standard Primarily wood 6-8mm <8% >8,000 Btu/lb <2.0% 38-46lbs/ft3 <0.5% fi ber with possibly a small percent of other ag fi ber

Utility or Wood fi ber, bark, 6-8mm <10% >8,000 Btu/lb <6.0% 38-46lbs/ft3 <0.5%Industrial grass, other and larger

Figure 3.

Fines Content

Likely Source Materials

Size Moisture Content

Btu Value

Ash Content

Bulk Density


Ash content and mineral composition —

Ash content is perhaps the greatest distinguish-

ing parameter among the four grades of pellet

fuels. Super Premium pellets have less than

0.5 percent ash content; Premium pellets, less

than one percent; Standard pellets, between

one and two percent; and Utility or Industrial

pellets have two to six percent. The amount

and composition of minerals in the fuel will

determine the amount of ash produced and

to what extent these minerals will fuse or melt

together, forming clinkers during combustion

at standard combustion temperatures.5

Density — Pellets have consistent hardness and

energy content (minimum 40 pounds/cubic

foot for Premium or Super Premium). Density

is a key factor in pellet fuel quality. Less dense

pellets will burn less effi ciently and deliver less

heat. Less dense pellets are also less durable and

often degrade into fi nes prematurely.

Fines — There is commonly a small amount

of fi nes or dust from pellet breakdown due to

wear and tear in handling and shipping. Exces-

sive fi nes content can cause material bridging

in the fuel hopper; minimizing the amount

of fi nes content avoids fairly serious problems

with the fuel feeding systems. The amount

of fi ne dust passing through 1/8-inch screen

should be no more than 0.5 percent by weight.

Chlorides — There should be limited salt

content (no more than 300 parts per million)

in pellets. When pellets are burned, chloride

gases are extremely corrosive to metal and

excessive levels can cause signifi cant damage to

heat exchange and exhaust venting systems.

4.3 RECOMMENDED PELLET QUALITY

FOR A PELLET BUSINESS IN ADDISON

COUNTY

In order to increase pellet fuel use within the

residential and commercial markets, pellet fuel

producers must strive to manufacture high

quality pellets that can be burned easily and re-

liably in pellet heating appliances on the mar-

ket today. Without the convenience of burning

high-quality, reliable pellet fuel, fewer hom-

eowners and business owners will likely switch

from burning no-hassle liquid fossil fuels.

Super Premium and Premium grade pellets are

suitable for almost any pellet stove appliance.

Premium and, to a certain extent, Standard

pellets are suitable for most pellet boilers with

automatic ash removal systems. Industrial

grade pellets, or those with the increased risk

of clinker (fused ash) formation are suitable for

use in very large industrial boilers designed to

handle such high ash content fuels.

For the purpose of this report, it is assumed

that Super Premium, Premium, and perhaps

Standard grade pellets are the target products

for Addison County. Industrial grade pellets

could be produced, but would have a limited

market, particularly since woodchips fi ll the

industrial grade biomass heating fuel niche

at roughly half the cost per Btu compared to

pellets.

5 http://www.pelletheat.org/3/industry/index.html.

BERC Final Report on Addison County Pellet Feasibility Study Page

The fi rst step in determining whether a pellet

mill could be located in Addison County is to

determine how much source fi ber is available.

Wood is the most common source of pellet

fuel fi ber and historically wood pellets have

been made almost exclusively from sawmill

residues. Since pellet fuel is relatively low

in moisture content (six percent) compared

to freshly cut wood (or grass) that contains

signifi cant moisture levels (40-60 percent for

wood), any pellet mill using green wood fi ber

as its primary feedstock will require nearly

twice as much input material than its produc-

tion of pellets. The major difference is water

weight lost in drying the feedstock.

5.1 SOURCES AND AVAILABILITY OF

WOOD RESIDUES

5.1.1 Sawmills. The business of sawing round

logs into dimensional lumber produces a

signifi cant amount of by-product wood. The

slabs and off-cuts from lumber production at

larger sawmills is typically chipped and shipped

to regional pulpmills, biomass power plants,

or woodchip heated institutions. These “mill”

or “paper” chips are an excellent feedstock for

pellet making. Mill chips tend to be the high-

est quality chips available because the sawlogs

are debarked before being cut into lumber

(without bark, the resulting chips have relatively

low ash content). Mill chips are also commonly

screened to remove over-sized stringers and

fi nes. Wasted wood from sawmills is commonly

chipped on a continual basis as logs are sawn

and chips are blown directly into dedicated

box trailers. When the trailers are full they are

shipped to the various markets and empty trail-

ers are set in their place.

In addition to chips, sawmills also produce

signifi cant volumes of bark and sawdust, both

of which can be used as a feedstock for pellets.

Sawdust is perhaps the most ideal material for

making pellets: it is clean, high-quality material

that is already ground into small fi bers and in

many cases it is already dry. Despite the advan-

tages of using sawdust as a primary feedstock for

pellets, it is in tight supply because production is

low and demand is high. Sawdust from sawmills

has long been sold as bedding to farms.

Dairy farms have, over the past fi ve years,

experienced drastic price increases for sawdust

due to the dwindling supplies and competition

from regional pellet mills. During the past few

years average prices for sawdust have increased

an estimated 300 percent.

Hardwood bark from sawmills is frequently

used as boiler fuel at sawmills to run the lumber

drying kilns. Hardwood bark is also frequently

sold to composting operations for use in com-

12

5.0 Wood Fiber Assessment for Addison County


post and top-soil production. Softwood bark is

most commonly sold to the horticultural mar-

kets as a mulch product. The value of softwood

bark as mulch far exceeds its value as a fuel.

It is extremely important to note that in the

past several years the regional production of by-

products such as chips, bark, and sawdust has

declined for two main reasons: (1) increased

sawmill effi ciencies (producing more lumber

and less waste) and (2) declining sawmill activ-

ity due to softening lumber markets. At the

same time, demand for sawmill by-products

has grown dramatically: Biomass power plants,

wood heating systems, and regional pellet mills

have increased the demand for these materials.

There are two large sawmills in Addison

County: A Johnson and Lathrup’s Maple Sup-

ply, both in Bristol, Vermont. There are several

other smaller sawmills in the county producing

well under one million board feet (MBF) per

year. There are also several portable sawmills in

operation, but these mills process relatively small

volumes and thereby generate minimal volumes

of residues. When assessing residue availability,

larger sawmills should be targeted because they

generate suffi cient volumes and because the

infrastructure to collect, load, and transport the

material is already in place at the mill.

Again, it is important to note that nearly all

the material generated from these sawmills has

existing markets and any use of these materi-

als for pellet making would divert this material

from another market that may be very depen-

dent on its supply (i.e. farmers using sawdust

for bedding).

5.1.2 Wood Products Manufacturing. There

are several wood products manufacturing busi-

nesses in Addison County that generate waste

wood scraps and sawdust from manufacturing

raw lumber into value-added products such as

fl ooring, furniture, and cabinets.

Many of the businesses that manufacture wood

products and generate wood scraps and saw-

dust produce very small volumes. Most either

burn their scrap wood onsite for space heating

or bag and sell it as kindling. Any signifi cant

volumes of sawdust are sold to local farms.

5.1.3 Clean Community Wood Wastes.

Addison County Solid Waste District (AC-

SWD) diverts approximately 800 tons of clean

community wood waste each year from their

facility. This material includes tree trimmings

less than six inches in diameter, discarded

Christmas trees, wooden pallets, tree stumps,

etc. This material is collected at the transfer

station, periodically ground into mulch chips,

and currently given away as mulch to area

residents.6

While ACSWD’s wood waste is relatively

clean, only a small amount is available since

a large percentage of the waste wood in rural

areas like Addison County is pile-burned or

dragged into the woods to slowly decompose.

Also, in general, community wood waste is

a poor feedstock for making pellets. The ash

content is high and the risk for contamination

from painted or treated wood is too great.

Community wood waste is not a recommend-

ed feedstock for pellet making.

6 Addison County Solid Waste District 2007 Annual Report.


5.1.4 Conclusions on the Availability of

Wood Residues. Addison County does not

have a signifi cant wood residue resource.

Community wood waste is not recommended

for pellet manufacturing. While mill residues

and waste from wood products manufacturing

could be available, there are typically already

established markets for this material. Increased

demand will escalate prices, potentially hurting

other parts of Addison County’s economy. In

addition, mill residues have declined in avail-

ability and may continue to do so. Building a

pellet manufacturing business that is depen-

dent on this material is not recommended.

5.2 LOW-GRADE WOOD HARVEST

POTENTIAL

With extremely limited availability of wood

residues within Addison County, harvested

wood will likely account for nearly all wood fi -

ber sourced by a pellet mill. While higher-qual-

ity timber products such as veneer and sawlogs

are commercially harvested routinely as part of

forest management, low-grade wood has often

been left behind in the absence of a reliable

market. Reliable local markets for low-grade

wood can create economic incentive to remove

low-grade trees to help enhance the growth of

the higher-quality trees for future harvest.

Estimates were made of the amount of low-

grade wood that is accessible and available on

an annual basis for making pellets. In an effort

to quantify the low-grade wood that could be

harvested for a pellet mill, a thorough review

was conducted of forestland area, ownership,

inventory, growth, and removals.

In order to quantify the potential wood re-

source in Addison County, BERC identifi ed

the footprint of actively managed forestland

that would be accessible for harvesting and

estimated the annual growth of low-grade

wood that could be harvested sustainably from

that footprint. By accounting for existing rates

of harvest in the county for fi rewood, biomass,

and pulp, BERC estimated the net amount

of low-grade wood that would be available

annually in Addison County (on a sustainable

basis). The process is outlined below.

1. Gather and review data on wood residue

generation.

2. Identify the total forested footprint in Ad-

dison County at the town level.

3. Perform spatial analysis to fi lter out inacces-

sible forestland and ecologically sensitive

areas where forest management requiring

periodic harvesting would be inappropriate.

This was done sequentially so that areas

were not double-counted if they fell within

more than one category of inaccessibility.

4. Model annual growth of low-grade wood at

the town level in Addison County using US

Forest Service inventory data on forestland

area ownership, forest inventory and com-

position, and forest growth.

5. Determine existing demand for wood (us-

ing State data on harvesting) and the net

availability of low-grade wood from Ad-

dison County for potential use in pellet fuel

manufacturing.

6. Examine harvesting and transportation costs

and market pricing for low-grade wood to

estimate wood fi ber prices.


5.2.1 Calculated Forestland Area. Vermont

Center for Geographic Information (VCGI)

was hired to use a geographic information

system (GIS)-based approach to calculate the

forested footprint in Addison County. The

National Land Cover Dataset (NLCD, 2006),

showing forestland broken down into decidu-

ous, evergreen, and mixed forest types, was

used as the base layer representing total forest-

land in Addison County. Total forestland area

in Addison County is 230,268 acres (or nearly

45 percent of the total land area).

Not all forestland, however, is physically ac-

cessible and ecologically appropriate for forest

management that calls for periodic harvest-

ing. To identify the footprint from which

low-grade wood can be harvested in Addison

County, spatial analysis was conducted to re-

duce total forestland to only the footprint that

is accessible and appropriate for harvesting. Ar-

cView GIS ModelBuilder was used to fi lter out

those areas of forestland in Addison County

that are inaccessible and ecologically sensitive,

and therefore not appropriate for harvesting,

due to the following physical factors:

• slope greater than 40 percent grade

• elevation higher than 2,500 feet

• wetlands (including 50 foot buffers)

• streams (including 50 foot buffers)

• deeryards and other designated habitat

areas

• wilderness and other conserved lands

• roads (including 25 to 50 foot buffers)

• other developed spaces such as homes and

driveways

These factors were accounted for sequentially

so that areas were not double-counted if they

fell within more than one category of inac-

cessibility. The model is mapped in Figure 4

above.

Figure 5 on the following page summarizes

the results of this spatial analysis, showing by

town and by forest type (deciduous, evergreen,

and mixed forest) the remaining footprint of

forestland in Addison County that is accessible

and appropriate for harvesting after account-

ing for the physical inaccessibility factors listed

above.

Figure 4 (above).

ArcView GIS

ModelBuilder was

used to fi lter areas

of forestland in

Addison County

that are inacces-

sible and ecologi-

cally sensitive, and

therefore not

appropriate for

harvesting. The

process is outlined

in this fl owchart.

Figure 5 (opposite

page).


Total Starting Forestland & Remaining Accessible Forestland Area in Addison County (acres)

Addison 31,327 2,531 332 317 3,180 830 128 75 1,033

Bridport 29,642 3,131 279 404 3,814 2,541 204 345 3,090

Bristol 26,371 12,560 1,173 3,891 17,624 8,268 685 2,600 11,553

Cornwall 18,391 2,425 522 341 3,288 1,894 376 272 2,542

Ferrisburg 39,192 3,442 1,163 933 5,539 2,522 789 664 3,975

Goshen 13,275 8,007 1,110 2,158 11,275 6,344 680 1,536 8,560

Granville 32,625 19,044 2,395 4,475 25,914 12,458 1,292 2,957 16,707

Hancock 24,696 15,639 2,521 2,197 20,357 10,038 1,148 1,554 12,741

Leicester 13,882 4,228 1,138 466 5,832 3,118 774 286 4,178

Lincoln 29,312 15,441 3,160 5,224 23,825 11,594 1,470 3,492 16,556

Middlebury 25,403 7,247 1,393 1,434 10,074 5,727 815 843 7,385

Monkton 23,212 6,403 1,491 3,943 11,837 5,160 943 2,411 8,513

New Haven 26,560 4,242 1,619 1,597 7,457 3,451 1,024 1,125 5,599

Orwell 31,823 5,901 2,117 799 8,817 4,716 1,383 661 6,760

Panton 14,103 613 224 119 955 526 150 107 783

Ripton 31,599 19,753 4,265 4,518 28,536 13,491 781 2,347 16,619

Salisbury 19,262 6,238 1,220 706 8,164 4,563 744 424 5,731

Shoreham 29,521 3,451 559 555 4,566 2,914 464 469 3,847

Starksboro 29,155 17,281 746 4,786 22,813 15,345 496 3,671 19,512

Vergennes 1,621 93 17 5 115 70 11 2 83

Waltham 5,910 1,780 176 276 2,232 1,463 142 201 1,807

Weybridge 11,243 2,490 255 702 3,446 1,040 92 286 1,418

Whiting 8,770 483 96 28 607 352 68 26 446

TOTAL 516,895 162,422 27,969 39,876 230,268 118,424 14,660 26,355 159,438

Total

Accessible

Forest

Total

Land

Area

Starting

Deciduous

Forest

Starting

Evergreen

Forest

Starting

Mixed

Forest

Total

Starting

Forest

Accessible

Deciduous

Forest

Accessible

Evergreen

Forest

Accessible

Mixed

Forest


As shown in Figure 5 on the previous page,

out of the total forestland in Addison County,

159,438 acres (or nearly 70 percent) are found

to be accessible and appropriate for harvesting

low-grade wood. Results are shown by town

and, as can be seen in the table above, some

towns are more heavily forested, such as those

on the eastern side of the county like Bristol,

Goshen, Granville, Hancock, Lincoln, Ripton,

and Starksboro.

Figure 6 below shows total forestland area

in Addison County overlaid by the areas that

are physically inaccessible or inappropriate for

harvesting (in red). The forest area that is show-

ing through (in shades of green) represents the

portion of Addison County’s forestland that is

accessible and appropriate for harvesting. (This

is a spatial depiction of the same results shown in

the table above.) A full size version of this map is

included as Appendix A at the end of this report.

Figure 7 on the opposite page shows the dif-

ference, by forest type, between the total start-

ing area of forestland in Addison County and

the remaining area of forestland that is physi-

cally accessible and appropriate for harvest.

5.2.2 Net Available Wood Fiber in

Addison County. In summary, the fi rst step

identifi ed 159,438 acres in Addison County

that are physically accessible and ecologically

appropriate for harvesting low-grade wood. The

next step is to estimate the net annual growth of

low-grade wood on that footprint, and further,

the net amount of wood fi ber available annu-

ally after existing demands for the material and

current harvest rates are accounted for. This

estimation included:

• identifying the portion of accessible forest-

land that is actively managed (and therefore

periodically harvested),

• understanding total forest inventory and the

portion that is low-grade material appropri-

ate for wood fuel production,

• approximating the annual rate of new

growth,

• quantifying existing demands for low-grade

wood, and

• understanding current harvest rates.

A model was developed by BERC (adapted

from the Vermont Wood Fuel Supply Study

and shown in Figure 8) that takes the above-

listed factors into account to calculate the

amount of low-grade wood grown annually

on a sustained-yield basis on the forestland

that is accessible and appropriate for harvest.

The fl owchart in Figure 9 (page 19) gives an

overview of the model’s inputs and outputs.

The following sections of this report detail

these inputs, with the ultimate result being

the net amount of low-grade wood fi ber that

would be available annually for a pellet mill in

Addison County.

17

Figure 6. The forest

area that is show-

ing through (in

shades of green)

represents the

portion of Addison

County’s forestland

that is accessible

and appropriate

for harvesting.


Figure 7 (top).

Total starting and

remaining forest-

land, by forest type.

Figure 8 (bottom).

Screen shot of the

BERC-developed

model for calculat-

ing the amount of

low-grade wood

grown annually on

a sustained-yield

basis on forestland

that is accessible

and appropriate

for harvest.


Forest Ownership and Parcel Size. As part

of the quantifi cation of low-grade wood avail-

able annually in Addison County, forestland

ownership and parcel size were gauged to de-

termine likely forest management practices with

periodic harvesting. Both of these factors can

be good indicators of the likelihood of harvest;

therefore, the percent of forestland in each

ownership category was a key component of the

estimation of available low-grade wood. Figure

10 on the opposite page gives an overview of

the ownership of Addison County’s forestland.

National, State and Municipal forests, which

comprise about one-quarter of Addison

County’s forestland, are not as actively man-

aged and harvested as forests owned by the

forest industry, for example. Forests owned

by corporations or farmers are moderately

managed and harvested. Forestland in private

ownership can be more likely to be actively

managed and harvested than most of the other

ownership categories (with the exception of

forest industry-owned forests).

There is also a distinct difference in the likeli-

hood of harvest on privately owned forests

based on parcel size. Figure 11 on the oppo-

site page shows the relationship between parcel

size and the probability of harvesting.

In general, the probability of harvesting in-

creases with increasing parcel size. On parcels

less than about 50 acres in size, harvesting is

not as likely. This can be due to personal values

or to the challenge of harvesting less volume

from smaller forest parcels, since there is lim-

ited space for equipment to access and move

around within a smaller piece of forestland.

On parcels greater than 50 acres, however, it

is more likely that forestland will be harvested.

The tax burden on larger tracts of forestland

tends to encourage these owners to harvest for

the economic gains.

Figure 9. This

fl owchart gives an

overview of the

model’s inputs and

outputs. The result

was an estimation

of the net amount

of low-grade wood

fi ber that would be

available annually

for a pellet mill in

Addison County.

19


Figure 10 (top).

Forestland owner-

ship and parcel

size were gauged

as factors that can

be good indicators

of the likelihood

of harvest. The

percent of Addison

County’s forestland

in each ownership

category is shown

here, and was a

key component of

the estimation of

available low-grade

wood.

Figure 11 (bot-

tom). In general,

there is a positive

correlation be-

tween parcel size

and the probability

of harvesting.


Forest Inventory. Another component of

quantifying the amount of low-grade wood

available annually in Addison County is esti-

mating both the total inventory on the acces-

sible forestland and the portion of inventory

that is low-grade wood appropriate for wood

fuel production. The only source of complete

forest inventory data in Addison County is

compiled by the USDA Forest Service.

Since it is impossible to count every tree, the

USDA Forest Service Forest Inventory and

Analysis (FIA) Program uses a statistically

designed sampling method. First, aerial pho-

tographs of the forest are interpreted. Next, a

grid of thousands of points is overlaid on the

aerial photos. If forested, each point is classi-

fi ed according to land use and tree size. Using

this information, a sample of dozens of plots is

selected for measurement by FIA fi eld crews.

In the most recent annual survey there were

70 FIA inventory plots in Addison County.

The sample includes plots that were estab-

lished during previous forest inventories. The

re-measurements of the same plots yield valu-

able information on how individual trees grow.

Field crews also collect data on the number,

size, and species of trees, and the

related forest attributes. All this in-

formation is used to generate reliable

estimates of the condition and health

of the forest resource, and how it is

changing over time.

For live trees of a merchantable

size (fi ve inches Diameter at Breast

Height [DBH] and larger) there

are two main qualitative categories:

growing stock and cull. The term

“growing stock” refers to the tradi-

tionally merchantable wood con-

tained in live trees greater than fi ve

inches, whereas “cull” refers to trees

or portions of trees that are rough or

rotten and therefore are traditionally

un-merchantable. Only the portion

of the growing stock bole7 and the

portion of the cull bole inventory,

marked in green in Figure 12, plus

non-commercial species of live

standing trees fi ve inches DBH and

larger were counted for this fi ber

resource assessment.

7 Bole is the main stem or trunk of a tree.

Figure 12.


While top and limb wood is a common

source of wood fuel for other biomass

energy markets (such as woodchips for

electrical generation), it was excluded

from this assessment for two main

reasons: forest ecology and pellet fuel

quality. Top and limb wood, often

extracted from the forest as part of

whole-tree timber harvests, are a vital

source of organic matter and nutrients

for forest soils. Removing this wood re-

peatedly in each harvest cycle runs the

risk of adversely impacting forest soil

productivity. In addition to the ecologi-

cal reasons for excluding top and limb

wood, it is diffi cult to produce high-

quality pellets from smaller diameter

top and limb wood.

High quality pellets that fetch the higher mar-

ket price are produced from the “white wood”

(wood without bark) component of the tree by

stripping off the outer bark layer. Larger diam-

eter and straighter stems are easier to effectively

de-bark. Smaller stems with more curves, such

as those included in the T&L wood, are ex-

tremely diffi cult to debark and will dramatically

increase the resulting pellet’s bark content,

therefore increasing its ash content.

Standing and downed deadwood was not

counted due to its value as wildlife habitat and

because it does not represent inventory on

which new growth occurs. Seedling and sap-

lings were not counted either. Foliage, roots,

and stumps are not counted.

Figure 13 above illustrates the comparative

volume of all bole wood and top and limb

wood in a typical Addison County forest and

the proportions of higher quality growing stock

trees to the lower quality cull trees. Figure 13

also shows the majority of the forest inventory

of live trees fi ve inches DBH or greater fall

within the growing stock category. Addition-

ally, the majority of the wood volume and mass

(above a one foot stump and excluding foliage)

lies within the bole, or main stem, inventory of

the tree as compared to the top and limb wood.

Figure 14 on the following page gives the total

forest inventory,8 by town, on the physically

accessible and actively managed portion of

forestland in Addison County. Figure 14 also

shows that the towns on the eastern side of

Addison County have the most forestland area

and therefore the greatest inventories of wood.

Figure 13.

8 Total forest inventory of live trees fi ve inches DBH and larger (includes growing stock and cull trees and bole and top and limb wood inventory). This total is then whittled down to a smaller and more appropriate low-grade wood inventory on which net annual growth rates are applied.


Net Annual Growth. In addition to deter-

mining the amount of standing wood (or

inventory) and the forest’s composition,

knowing how much the forests are growing

and what level of harvest can be sustained over

time gives a clearer picture of wood fuel avail-

ability and the viability of long term supply of

wood fi ber for pellet fuel production.

When forests are examined from a more broad

perspective, wood inventory can be compared

to money invested in a bank account that earns

interest annually. The total annual growth

of trees in a forest is analogous to the inter-

est earned on capital. A wise fi nancial inves-

tor strives to only spend the annual interest

and not dip into the principal. Forests can be

viewed in a similar way: Continual harvesting

beyond the rate of growth, or withdrawing the

principal, is unsustainable.

For the purpose of this project, the net annual

growth9 of wood was chosen as the indicator of

how much wood the forests of Addison County

can provide on a sustained-yield basis. Averaged

net growth rates were applied to the portion of

the forestland deemed accessible and appropri-

ate to estimate the amount of low-grade wood

growing annually in Addison County.

Three model runs were conducted to cover a

set of assumptions for conservative, moder-

ate, and aggressive estimates of the net annual

growth of low-grade wood on the footprint of

accessible and appropriate forestland in Addi-

son County. As was described above, the focus

was on growing stock bole, cull bole, and non-

commercial species of live standing trees fi ve

inches DBH and larger.

Figure 15 on the next page shows the key as-

sumptions used in each run

of the analysis. The moderate

run is likely to be the most

accurate depiction of reality,

with the conservative and

aggressive runs serving as the

bookends for a possible range

of results. The moderate set

of assumptions in Figure 15

appears in a darker font for

emphasis.

9FIA defi nes forest net annual growth as “the change, resulting from natural causes, in growing-stock volume during the period between surveys (divided by the number of growing seasons to produce average annual net growth).” The simplifi ed FIA formula for net growth is: In-growth + Accretion – Mortality = Net growth.

Figure 14.


Key Assumptions Used in Three Forest Fiber Yield Scenarios Tested

Percentage of Accessible Forest Land Actively Managed and Periodically Harvested by Ownership and Parcel Size

Conservative Moderate Aggressive

National Forest 0% 5% 10%

State 10% 10% 20%

Municipal 10% 10% 20%

Forest Industry 80% 90% 100%

Farmer 40% 50% 60%

Corporate 40% 50% 60%

Individual < 50 Acres 0% 10% 20%

Individual > 50 Acres 40% 50% 75%

Other 10% 10% 25%

Percent of Forest Inventory Components that Are Low Grade

% Growing Stock Bole NAG Low Grade 40% 50% 60%

% Cull Bole NAG that is Low Grade 40% 50% 90%

% Growing Stock T&L NAG Harvestable 0% 0% 15%

% Cull T&L NAG Harvestable 0% 0% 15%

Average Net Annual Growth Rate 1.50% 2% 2.24%

Again, the moderate model run is the best

depiction of the current reality of forest

management and wood supply. The aggressive

and conservative model runs are designed to

illustrate the possible range should variables

change in either direction. As can be seen in

Figure 15, top and limb wood was included in

the aggressive analysis, but not in the moder-

ate or conservative analyses.

Using the data assembled and the key assump-

tions listed above, the three model runs were

conducted and Figure 16 on the following

page illustrates the results.

Figure 15.


Net Annual Growth of Low-Grade Wood on Accessible Managed

Forestland (green tons)

Conservative Moderate Aggressive

Total (Bole Only) Total (Bole Only) Bole Top & Limb Total

Addison 217 455 944 29 973

Bridport 648 1,362 2,824 87 2,911

Bristol 2,422 5,092 10,558 324 10,881

Cornwall 533 1,120 2,323 71 2,394

Ferrisburg 833 1,752 3,633 111 3,744

Goshen 1,795 3,773 7,823 240 8,063

Granville 3,503 7,364 15,268 468 15,736

Hancock 2,671 5,616 11,643 357 12,000

Leicester 876 1,841 3,818 117 3,935

Lincoln 3,471 7,298 15,130 464 15,594

Middlebury 1,548 3,255 6,749 207 6,956

Monkton 1,785 3,752 7,780 239 8,018

New Haven 1,174 2,468 5,117 157 5,274

Orwell 1,417 2,980 6,178 189 6,367

Panton 164 345 715 22 737

Ripton 3,485 7,325 15,188 466 15,654

Salisbury 1,202 2,526 5,237 161 5,398

Shoreham 807 1,696 3,516 108 3,623

Starksboro 4,091 8,600 17,831 547 18,378

Vergennes 17 37 76 2 78

Waltham 379 796 1,651 51 1,702

Weybridge 297 625 1,296 40 1,336

Whiting 93 197 407 12 420

TOTAL 33,429 70,276 145,703 4,469 150,172

Figure 16.


Moderate Model Run – A moderate assess-

ment of the net amount of low-grade wood

available from accessible and actively managed

forestland was 70,276 green tons per year. The

largest variables were the percentages of the

accessible forestland that is actively managed

(by ownership class), the portion of inven-

tory that is low-grade and appropriate for

wood fuel harvesting, and the average rate of

growth. The chart shown here gives the results

of the moderate run. While this is the most

accurate depiction of wood supply at present,

it is based on analysis that can vary dramati-

cally with small changes of key variables. For

this reason, the study team chose to test the

model’s sensitivity to relatively minor changes

in the key variables.

Conservative Model Run – This model run

explores what happens if fewer forest landown-

ers manage their forestland, if fewer trees are

suitable for fuel harvest, and if the average rate

of growth slows. A conservative estimate of

the net amount of low-grade wood available

on accessible and actively managed forestland

within Addison County was 33,429 green tons

per year, as shown in the table above.

Aggressive Model Run – This model run

explores the results of a larger percentage of

forest landowners managing their woodlots,

more wood inventory that is suitable for wood

fuel (including some top and limb wood), and

faster average rate of forest growth. These

conditions would yield 150,172 green tons

per year from accessible and actively managed

forestland in Addison County.

Figure 17.


Existing Demands for Low-grade Wood.

The town level numbers presented above do not

account for removals. Harvesting information is

only gathered at the county level; therefore the

net amount of low-grade wood remaining after

removals are accounted for can only be calcu-

lated at the county level and not at the town

level. Forest inventory and growth data can

be applied at the town level using county wide

per acre averages, but harvesting data cannot

be applied using per acre averages. The section

below explores the current market demand for

low-grade wood from Addison County.

Historically, there have been three main mar-

kets for low-grade wood: fi rewood, pulp, and

biomass. Both fi rewood and pulp markets con-

sume mostly low-grade bole wood, whereas

biomass markets often consume just top and

limb wood, but in some cases they utilize

entire chipped trees. More recently, two more

markets have emerged in addition to fi rewood,

pulp, and biomass: The seasonal chip heating

market has grown dramatically over the past

few years and pellet manufacturing will soon

be a signifi cant market for low-grade wood.

Firewood – Residential fi rewood accounts for

a large majority of low-grade wood demand

in the region. Given the current high cost

of heating oil, Vermont has seen a dramatic

increase in demand for cordwood for home

heating over the past fi ve years. Current

estimates of fi rewood use and harvesting in

Vermont are 300,000 cords or 700,000 green

tons annually.

Pulpwood – Pulpwood demand and harvest-

ing in Vermont has gradually declined over

the past decade, although there are still several

large pulpmills in eastern New York, southern

Quebec and northwestern Maine that still

draw upon Vermont for their wood supply.

Although pulp volumes have declined, current

prices paid by the pulpmills have increased dra-

matically in the past 12 months. In 2004, over

650,000 green tons of pulpwood were har-

vested and exported to the regional pulpmills.

Just two years later only 250,000 greens tons

of pulpwood were harvested—a 62 percent

reduction.

Biomass Power Plants – Both of Vermont’s

wood-fi red power plants, McNeil Station in

Burlington and Ryegate Power Station in

Ryegate, consume large amounts of harvested

wood in the form of whole-tree chips. Tops

and limbs left over from mechanized whole-

tree timber harvests are also chipped into fuel.

International Paper and Finch Paper also con-

sume whole-tree chips as boiler fuel in addi-

tion to the pulpwood and pulp chips they con-

sume for making paper. Over the past several

years nearly 200,000 green tons of low-grade

wood from whole-tree harvesting in Vermont

has been chipped for power plant fuel each

year. Due to their locations, both Ryegate and

McNeil Station source signifi cant portions of

their wood fuel from adjoining New York and

New Hampshire.

Institutional Chip Heating Market – Wood-

chip heating for schools and institutions has

grown steadily over the past two decades in

Vermont. In the past two years this growth

has increased dramatically with several more

schools and two college campus installations.

Initially, nearly all woodchip heating systems

sourced their chip fuel directly from sawmills

as a by-product material; however as sawmill

activity has slowly declined and demand for

chip fuel has increased (as was described in the

previous section on wood residues), a larger

percentage of chip systems now source their

fuel from chipped pulpwood as a commod-

ity. In the past two years the combined chip

heating market has grown from consuming

approximately 25,000 tons annually to over

50,000 tons. The recently installed woodchip


system at Middlebury College accounts for

a large portion of this recent growth. This

demand will continue to grow and there are

currently several larger district heating projects

proposed in Vermont.

Pellet Manufacturing – While there currently

are no operational pellet mills in Vermont and

few in the surrounding states, there are nu-

merous proposals for pellet mills to be built in

Vermont, New York, and New Hampshire in

the near future.10 If only a small portion of the

proposed mills are built, they will constitute a

signifi cant market for low-grade wood. Similar

to the institutional chip heating market, pellet

mills have transitioned from sourcing their

fi ber from exclusively sawmill by-product to

increasingly sourcing pulpwood that is then

debarked, chipped, and re-ground to their

specifi cations onsite.

Net Available Wood Fiber. The next and

fi nal step is to explore the capacity, if any, for

further market demand from a pellet mill in

Addison County. The previous step of this

analysis showed there are 70,276 green tons

(moderate assessment) of low-grade wood

growing annually on forestland that is acces-

sible and appropriate for harvest in Addison

County. Data on existing harvest rates of

low-grade wood being removed for fi rewood

(estimated), pulp, and biomass (pulp and

biomass amounts came from Vermont Depart-

ment of Forests, Parks and Recreation’s An-

nual Harvest Reports) were subtracted from

this net annual growth, giving the net available

low-grade wood in Addison County.

When the harvesting data gathered by the

State of Vermont is examined (shown in

Figure 18 below), it is clear that high-quality

10 There is one pellet mill in Clarendon, Vermont that expects to be producing 10,000 tons annually by Fall 2009.

Figure 18. Data

on existing har-

vest rates of

low-grade wood

being removed

for fi rewood, pulp,

and biomass were

accounted for in

estimating the net

amount of low-

grade wood that is

available in Addi-

son County.


timber products such as sawlogs and veneer

account for the majority of harvested wood;

however, the amounts have been gradually de-

clining. Pulpwood saw a tremendous spike in

2000 and has since fallen to half its pre-1998

harvest levels. Whole-tree chips for biomass

power have accounted for a very small amount

of harvested wood over this time period.

Unfortunately, the annual harvest data com-

piled by the State of Vermont does not include

fi rewood harvesting because fi rewood is

frequently harvested

“under the radar” by

individuals. This type

of harvesting activity is

diffi cult to track using

an annual survey. When

the most recent data

for fi rewood consump-

tion in Vermont is

reviewed it is clear that

fi rewood accounts for a

very signifi cant amount

of the total demand.

As Figure 19 above shows, fi rewood harvest-

ing accounts for nearly 70 percent of all wood

harvested in Addison County. It is important

to note that at the time of this study the most

recent 2008 data on fi rewood use in Vermont

was not released and the estimates of fi rewood

harvesting used here come from county level

projections based on the original 1997 data.

Figure 19.

Addison County Annual Supply and Demand of Low-grade Wood (green tons)

Net Annual Growth of Low-grade Wood (moderate estimate) 70,276

Estimated Firewood Harvest11 (48,000)

Average Pulpwood Harvest12 (2,500 )

Average Chipwood Harvest13 (1,000)

Estimated New Demand from Middlebury College14 (2,000)

Net Available Wood Fiber 16,776

11 Based on 1997 Firewood Study data.12 Based on 4 year average of pulpwood harvest data for Addison County from Annual Harvest Report compiled by VT FPR.13 Based on 4 year average of chipwood harvest.14 Assumes 50 mile procurement radius and 10 county supply area for Middlebury College—therefore, Addison County provides one tenth of its total annual requirement of 20,000 green tons.

Figure 20.


Figure 20 on the previous page

shows the ten year averages for

harvested wood in Addison

County, including fi rewood, and

how much low-grade wood is

available for a potential pellet mill

in Addison County. This quan-

tity is based on the moderate

estimation of net annual growth:

70,276 green tons per year.

The net amount of wood fi ber

available annually in Addison

County (after accounting for

growth and existing demand) is 16,776 green

tons, as shown in the table above. This quan-

tity is dependent on the size of the procure-

ment area, which is in this case only Addison

County. This is a theoretic boundary; in reality

wood routinely moves between counties,

states, and even countries. Harvested wood

will go to where the logger can make top

dollar.. If the wood fi ber procurement were

confi ned to only Addison County the amount

of fi ber available would dramatically limit the

size of the pellet manufacturing facility. A small

pellet mill producing 10,000 tons per year will

require 20,000 tons of wood fi ber—therefore

Addison County has insuffi cient wood fi ber

resources to support even the smallest size op-

tion of pellet mill.

Further review of how agricultural fi bers

could supplement the availability of wood

fi ber is provided in the following section of

this report. However, if a slightly larger wood

fi ber procurement area were used (adding only

Chittenden and Rutland Counties for exam-

ple) a dramatically larger supply of wood fi ber

would be available. The table below shows the

net available low-grade wood within Addison

County and two of its neighboring counties,

Chittenden and Rutland, as a more plausible

reality of wood fi ber procurement.

Despite being Vermont’s most populated

county, Chittenden County has abundant

forestland. The average size forest parcel is

somewhat smaller than the average size forest

parcel in either Addison or Rutland County

(and so harvesting may be less likely on these

parcels, according to the relationship between

parcel size and likelihood of harvest explained

previously). But, there is still opportunity for

southern and eastern Chittenden County to

contribute wood fi ber to a pellet mill in Ad-

dison County.

Slightly smaller than Windsor County, Rutland

County is the second largest county in Ver-

mont and has the second greatest amount of

forestland. Expanding the wood fi ber pro-

curement for a pellet mill located in Addison

County to include Rutland County would

greatly impact the size of pellet mill that could

be viable by signifi cantly increasing the wood

fi ber available to the mill.

Based on the three county supply of nearly

160,000 green tons of wood fi ber a pellet mill

of roughly 80,000 tons of output could be

viable.

Moderate Assessment of Regional Net Available

Low-Grade Wood

County Amount in green tons/year

Addison 16,776

Chittenden 63,173

Rutland 80,022

Total 159,971

Figure 21.

30


5.3 RESOURCE COMPETITION

FROM LARGE WOOD-CONSUMING

FACILITIES

If a pellet mill producing pellets from wood

fi ber were established in Addison County,

it would likely face competition from other

established and future large-scale consumers of

low-grade wood. Older facilities that have al-

ready paid down all debt service often are able

to out-compete newer start up businesses that

are laden with debt service on the large capital

cost of their facility. The following section de-

tails the existing facilities that would have the

greatest competitive impact.

Burlington Electric Department (BED)

Joseph McNeil Generation Station

Burlington, Vermont

This 50 megawatt power plant consumes ap-

proximately 400,000 green tons of wood per

year. The power plant is owned by BED with

minority ownership by several Vermont electric

utilities. Due to the McNeil Station’s proxim-

ity to downtown Burlington and Winooski,

their plant is limited to receiving only 25 per-

cent of their volume directly via tractor trailer

trucks due to concerns about truck traffi c from

city residents. Therefore the remaining 75

percent of the wood fuel received by McNeil is

transported to the facility via rail.

The Swanton Rail Yard is BED’s only rail yard

and it is located approximately 35 miles to the

north of the power plant in Swanton, Ver-

mont. The rail yard receives truck shipments of

chips and re-loads these chips onto railcars for

fi nal delivery to the McNeil Station.

Ryegate Power Station

East Ryegate, Vermont

Ryegate Power located on the eastern border

of Vermont, along the Connecticut River, is a

20 MW power plant owned and operated by

Suez Energy. The power plant consumes ap-

proximately 250,000 green tons of wood fuel

annually. A majority of the woodchip fuel is

whole-tree chips from commercial timber har-

vests. The rest of the material is mill residues

and clean urban wood.

Boralex Power Station

Chateauguay, New York

The Boralex power plant is a 20 MW plant

that consumes approximately 225,000 green

tons annually.

International Paper (IP) Company

Ticonderoga, New York

IP Ticonderoga is a large pulp and paper mill

that consumes raw wood fi ber for pulping and

boiler fuel. It consumes an estimated 700,000

green tons of wood annually. A majority of the

wood fi ber used at this facility comes as pulp-

grade roundwood.

Finch Paper

Glens Falls, New York

Finch Paper, formerly Finch Pryun, owns and

operates a pulp and paper mill in Glens Falls,

New York. This mill consumes raw wood fi ber

for pulping and boiler fuel. They consume an

estimated 500,000 tons annually.

Middlebury College

Middlebury, Vermont

At the end of 2008, Middlebury College com-

pleted the installation of a large woodchip-

fi red boiler at the campus’s central steam plant

in effort to replace one million gallons (or 50

percent) of the college’s oil use for heating

and powering their campus. This new wood

combustion system will consume an estimated

20,000 green tons annually when running at

full capacity. The college has announced its in-

tent to draw 100 percent of its wood fuel from

within a 75-mile radius.


Others

In addition to the competitors listed above

there are pulpmills and pellet mills scattered

throughout the northeastern US and southern

Quebec. Under current market conditions

these competitors do not directly impact the

potential supply of low-grade wood in Addison

County, but should market conditions change

and procurement ranges expand, greater com-

petition for wood resources could occur.

5.4 WOOD PROCUREMENT

STRATEGIES FOR A PELLET MILL

Harvested wood fi ber for a pellet mill can be

transported from the forest to the facility as

either chips or roundwood. When a pellet mill

is planned, a decision must be made early in

the planning process whether the mill intends

to receive a majority of its supply as chips or

roundwood, since the type of feedstock will

dictate the equipment that is installed. Fa-

cilities receiving roundwood need additional

wood handling equipment.

5.4.1 Roundwood. One of the major advan-

tages of procuring wood fi ber as roundwood

is the storage “shelf-life.” Roundwood can be

stored outside without absorbing water from

the elements, while also not being as suscep-

tible to decomposition as chip piles are. This

longer shelf-life allows facilities to build large

wood inventories when harvesting conditions

are good, protecting the business from running

out of inventory during periods of wet and

muddy conditions when harvesting has ceased.

For roundwood, International Paper Company

in Ticonderoga, NY would be the pellet mills

biggest competitor. When sourcing material

from Vermont, the pellet mill would have to

rely on the cost advantage for avoided haul-

ing costs to convince loggers and truckers to

deliver to the pellet mill instead of driving to

Ticonderoga, New York.

5.4.2 Chipped Wood. Typical chipping

operations in Vermont are chipping for the

electric-generating market where little at-

tention to chip quality is needed and a wide

variety of low-grade wood can be fed to the

chipper. Typical whole-tree chips can be used

for pellet fuel production but tend to produce

a higher ash content pellet. A possible strategy

is to utilize a fl ail-debarking chipper instead of

a typical whole-tree chipper to improve chip

quality for pellet feedstocks.

5.4.3 Recommended Strategies. For

security and longer term on-site storage it is

recommended that the majority of sourced

wood fi ber be roundwood (rather than chips)

that would be chipped on-site as needed by

hired chipping contractors. If for some reason

on-site chipping is not an option (due to local

permitting), whole-tree chips and bole chips

can be sourced instead.

5.5 WOOD FIBER PRICING

In the Northeast, biomass (or low-grade

wood, in this case) as a by-product is well spo-

ken for and transitioning from a waste-stream

product to a commodity. Due to the overall

lack of available clean chips and sawdust, the

focus of the pricing section is specifi c to the

purchase of low-grade roundwood or pulp-

wood that would be delivered to the facility,

stored, and eventually debarked and chipped

before entering the pellet mill for further

processing.

The price of wood is affected by numerous

factors, but the primary ones are:

• Wood source and production costs.

This varies widely depending on whether

the wood is a by-product of some more

lucrative activity.

• Strength of the sawlog market. Higher

prices paid for sawlogs can help lower

prices for pulpwood and chips.


• Regional balance of supply and demand

for low-grade wood.

• Trucking distance from point of genera-

tion to end market. The cost of trucking

is discussed in greater detail in the section

below. In short, the price paid per ton of

feedstock is dependent heavily on the cost

to transport the material; this cost rises

with higher diesel prices and with greater

trucking distances.

Figure 22 above gives both an itemized range

and average costs for low-grade wood15. It

uses approximate costs (as the costs to harvest,

process, and haul pulpwood changes from har-

vest job to harvest job and depends widely on

dozens of variables such as volumes harvested,

layout of skidding roads, skid distances, equip-

ment used, topography, distance to the mill,

etc.). It also assumes the pulpwood is harvest-

ed as part of an integrated harvest where some

sawlogs are removed at the same time. If pulp-

wood were harvested without any sawlogs, the

costs presented in the table above would be

higher, since the economic gains from harvest-

ing sawlogs can help to “subsidize” the cost of

removing low-grade wood.

Over the past 20 years, woodchip and pulp-

wood prices have increased at approximately

one percent annually—well under the general

rate of infl ation. This is due to the fact that

woodchips and, to a certain extent, pulpwood

have historically been a by-product or second-

ary product of other primary activities like saw-

log harvesting and lumber production. Look-

ing forward, woodchip prices are expected to

increase, on average at 3.25 percent annually,

or matching the rate of general infl ation.

An important consideration in sourcing wood

from outside of the procurement area consid-

ered here is the increase in price that will come

from trucking the material further distances.

When wood (or agricultural) fi bers are trans-

ported over greater distances, not only does

the cost per ton paid by the pellet mill increase,

but the energy requirements also increase.

The hauling costs presented in the table above

are based on the core assumption that the

majority of material would be transported

less than 35 miles. In theory, for every mile

wood is transported, the delivered price to the

receiving facility increases. At today’s diesel

33

Itemized Production Cost of Low-Grade Roundwood

Cost Range Average Cost

Stumpage $0.50 - $5.00/green ton $4.50

Cost to fell, skid, and process at landing $15.00 - $25.00/green ton $17.00

Cost to haul to mill $5.00 - $20.00/green ton $10.00

Total Cost $20.00 - $50.00/green ton $31.50

Figure 22.

15 Some profi t margin has been factored into the costs presented for the landowner, logger, and trucker.


Transport Cost Sensitivity to Diesel Fuel Price and Haul Distance

Transport Cost Sensitivity to Diesel Fuel Price

Price of Diesel Fuel ($/gallon) $2.50 $3.00 $3.50 $4.00 $4.50

Labor Cost $18.00 $18.00 $18.00 $18.00 $18.00

Trucking overhead $20.00 $20.00 $20.00 $20.00 $20.00

Hourly Cost of Transportation $100.50 $113.00 $125.50 $138.00 $150.50

Average Haul Distance (miles) 35 35 35 35 35

Average Speed (MPH) 40 40 40 40 40

Average Transport Time - One Way (hours) 0.875 0.875 0.875 0.875 0.875

Average Load and Unload Time (hours) 1 1 1 1 1

Average Load Size (green tons) 25 25 25 25 25

Average Transport Cost per Green Ton $11.06 $12.43 $13.81 $15.18 $16.56

Transport Cost Sensitivity to Transport Distance

Price of Diesel Fuel ($/gallon) $2.50 $2.50 $2.50 $2.50 $2.50

Labor Cost $18.00 $18.00 $18.00 $18.00 $18.00

Trucking overhead $20.00 $20.00 $20.00 $20.00 $20.00

Hourly Cost of Transportation $100.50 $100.50 $100.50 $100.50 $100.50

Average Haul Distance (miles) 35 45 55 65 75

Average Speed (MPH) 40 40 40 40 40

Average Transport Time - One Way (hours) 0.875 1.125 1.375 1.625 1.875

Average Load and Unload Time (hours) 1 1 1 1 1

Average Load Size (green tons) 25 25 25 25 25

Average Transport Cost per Green Ton $11.06 $13.07 $15.08 $17.09 $19.10

Figure 23.

34


Figure 24 (top).

There is a posi-

tive correlation

between the price

of diesel fuel and

the average trans-

portation cost per

green ton of wood.

Figure 25 (bot-

tom). Similarly, av-

erage transporta-

tion costs (per ton

of wood) increase

with increasing

haul distances.

35


fuel prices, transporting 22 to 28 ton loads

(a trailer load) of roundwood or woodchips

costs between $2.50 and $3.00 per mile. More

detailed presentation on the cost of transport-

ing material distances greater than 35 miles is

given in the table and graphs below. Figure

24 on the previous page shows the positive

correlation between the price of diesel fuel and

the cost to transport a green ton of wood: As

diesel fuel prices escalate, the cost to transport

the material will also increase.

Similarly, there is a positive correlation be-

tween the haul distance and the cost to trans-

port a green ton of wood.

As Figure 25 on the previous page shows,

longer trucking distances will only slightly

increase the purchase cost of the wood fi ber.

Typically, it is advisable to keep trucking dis-

tances to a minimum, but $5 more per green

ton for wood hauled an extra 15 to 20 miles

is a small price to pay for greater assurance of

suffi cient supply. In the case of a pellet mill

for Addison County, the benefi ts of securing

additional wood from Chittenden and Rutland

County to supplement those secured from

Addison County far outweigh the few extra

dollars paid per ton for slightly longer haul

distances.

5.6 WOOD FIBER ASSESSMENT

CONCLUSIONS

All signifi cant volumes of desirable wood resi-

dues such as sawdust and mill chips are utilized

by other markets, and targeting sawdust for a

pellet mill would negatively impact bedding

prices paid by farmers, hurting other parts

of Addison County’s economy. Additionally,

clean community wood waste is not a recom-

mended feedstock. Since residue materials are

largely unavailable for a pellet mill in Addison

County, harvested wood will likely account for

nearly all wood fi ber sourced by a pellet mill.

Reliable local markets for low-grade wood can

bolster the local forest products industry and

enhance the growth of the higher-quality trees

for future harvest.

Addison County has a signifi cant amount

of forestland, with nearly 45 percent of the

county being forested. Of this, almost 70

percent of the county’s forestland was found

to be accessible and ecologically appropriate

for harvesting. An assessment was conducted

using moderate assumptions for the portion

of this forestland that is actively managed, the

inventory of low-grade wood, and the aver-

age rate of growth. This analysis found that

70,267 green tons of low-grade wood would

be available each year (the range could be as

wide as 33,429 to 150,172 green tons) to be

sustainably harvested from the accessible and

managed portion of forestland in Addison

County. Current harvesting to meet exist-

ing market demands signifi cantly impacts this

allotment, virtually reducing this moderate

fi gure to 16,776 green tons that are avail-

able—an amount insuffi cient to support a

small pellet mill. However, when neighboring

Chittenden and Rutland Counties are includ-

ed, this amount increases to 159,971 green

tons that would be available each year.

Pricing of roundwood from within Addison

County is estimated to cost $31.50 in the

fi rst year, but major swings in sawlog and

pulpwood markets and diesel fuel costs could

impact this price. Additionally, while it is typi-

cally advisable to keep trucking distances to

a minimum to prevent increasing prices for

wood, the advantage of greater feedstock secu-

rity from increased amounts of available wood

from neighboring counties would far outweigh

the relatively small increase in cost.

36


6.0 Agricultural Fiber Assessment for Addison County

In addition to the forest fi ber potential dis-

cussed earlier, signifi cant potential exists for

using agriculturally-derived fi bers for pellet fuel

production. Grasses have 95 percent of the Btu

value of wood and several pioneering compa-

nies, mostly in the mid-west, are beginning to

produce grass pellets for heating. As with wood

fi ber, there are two main categories of agricul-

tural fi bers: residues (or fi ber produced as a

by-product) and fi bers grown as energy crops.

Since pellet heating systems such as stoves,

furnaces, and boilers, are typically designed to

burn wood pellets, simply substituting grass

for wood in the same combustion system will

generally not produce satisfactory results.

Grasses have higher mineral content and a

different chemical composition; therefore, dis-

tinct combustion systems are needed to handle

these differences.

The natural occurring minerals in

various biomass materials are what

form ash when these materials are

combusted. In many cases higher

ash content is not the critical fac-

tor—the composition of minerals

and to what extent these minerals

fuse together to form “clinkers”

during combustion is the major

factor. During combustion, higher

chlorine and potassium levels in

grasses vaporize and form corrosive

salts on the interior walls of an ap-

pliance. Clinker build up can make

ash removal diffi cult, limit air fl ow

and lower combustion effi ciency,

and even cause fuel feeding jams.

At present, the residential and small

commercial heating markets do not

use heating appliances capable of reliably burn-

ing pellets made from 100 percent agricultural

fi bers. There is, however, strong interest in

fuel pellets made from agricultural feedstocks

and technology is constantly being researched

and developed. As Addison County considers

production of fuel pellets using locally-sourced

feedstocks, agricultural residues and energy

crops should be considered. Both sources of

agricultural fi bers are examined below.

6.1 AGRICULTURAL RESIDUES

Similar to the wood fi ber residues, limited

options exist for pellet making from waste or

residue material from agriculture. The section

below reviews these materials, their sources,

and the pros and cons of their use in pellet

making.

There is potential

to use agricultural

fi bers for pellet

production in

Addison County.

37


6.1.1 Sources and Availability of

Agricultural Residues. Many of the agricul-

tural residues commonly found in other parts

of the country are not typically generated here

in Vermont. In many parts of the country

there are harvestable residues left in the farm

fi elds after the commodity food or feed crop

has been harvested. Corn stover (stalks and

leaves) and oatstraw are good examples.

In Vermont—and in Addison County— the

majority of crops grown are feed for dairy

operations where the entire plant is harvested

and fed to the animals. Even with oil seed

crops, the resulting meal is very valuable as a

feed material leaving little as a potential feed-

stock for pellet fuel making.

Addison County has 80,608 acres of agricul-

tural land in hay yielding 257,010 dry tons of

hay annually16. In many years producing qual-

ity feed hay is diffi cult due to erratic weather

conditions. Hay that does not meet feed

quality, commonly referred to as waste hay,

is a potential source of agricultural fi ber from

which pellets could be made. This low-quality

hay is frequently sold and used as mulch. The

amount of waste hay produced annually in Ad-

dison County is extremely diffi cult to quantify

because, in good years, nearly all hay harvested

is high quality and therefore little waste hay is

produced, while in wet summers more waste

hay is produced.

6.2 DEDICATED ENERGY CROPS

Unlike by-product supply of agricultural fi bers

which are very fi nite, increasing amounts of

dedicated energy crops can be grown to meet

the market needs, so this study included devel-

oping a model to explore both the maximum

resource capacity and the moderate yield that

would be more likely. In a similar way to the

wood fi ber assessment described above, this

study considered the potential for and annual

availability of dedicated energy crops.

Numerous types of dedicated crops exist and

they are grown purposefully for various energy

markets. Oil crops, such as rapeseed, sunfl ow-

er, and soybean can be grown, harvested, and

pressed to extract the oil that is then converted

into fuel. Small amounts of oil seed crops are

already being grown throughout Vermont,

however the feed value of the resulting meal

(left over plant fi bers after the oil has been

extracted) well exceeds its value as a feedstock

for fuel pellets. For this reason, this analysis

focused only on fi ber crops, and not oil crops,

as a possible feedstock for making pellet fuel.

6.2.1 Grasses. No one grass species can be

grown effectively in all regions and climates;

however, the most broadly-considered grasses

for energy production are: Switchgrass (and

other native prairie grasses such as Big Blue-

stem and Prairie Cord grass); Miscanthus, a

hybrid high-yielding crop that has garnered

much interest; and Reed Canarygrass, an

important forage grass in Vermont that is

high-yielding and grows well in wet, marginal

areas, but that is also recognized as potentially

invasive, competing with other native wetland

species, making its use as an energy crop more

contentious. Each species has its own benefi ts

and drawbacks as a biomass fuel source. There

are other potential grasses as well, all of which

need further evaluation.

When deciding which species of grass is the

best choice for pellets, the fi rst consideration is

generally the yield per acre in any given micro-

climate or soil type, as this greatly infl uences

the economics of conversion of the crop to a

useful form for energy extraction.

16 USDA 2002 Census of Agriculture.

38


Another consideration is the mineral, and

therefore ash, content of a given grass on a

given plot, which may affect the value of the

crop as a densifi ed fuel for thermal applica-

tions. Another consideration may be harvest

windows as infl uenced by local climates. What

will the moisture content of the harvested

grass be? Will this limit uses? Are there other

users, birds for example, of the grass fi elds as it

is growing and how do they shape options for

harvesting?

Switchgrass (Panicum virgatum) is native to

the United States and is one of the best non-

woody energy crops because of its perennial

growth habit, high yield potential on a wide

variety of soil conditions and types, compat-

ibility with conventional farming practices, and

value in improving soil and water conservation

and quality. This native, warm-season grass is

widely adaptive once established; however, this

species requires attentive weed control in the

fi rst year of establishment so cool season grass-

es do not overwhelm it. Nitrogen fertilizer is

not recommended in the fi rst year to reduce

competition from grassy weeds. Switchgrass

should be harvested once per year, generally

after frost, using standard haying equipment.

Grasses cut in the fall and left to over-winter

are far lower in yield but have been shown to

leach out potassium and chlorine, two minerals

that may create issues during combustion.

Reed Canarygrass (Phylaris arundinacea) is

a perennial wetland grass, native to parts of

the US, Europe, and Asia. It is a cool-season

grass that is less productive than warm-season

grasses. It is winter hardy so can be grown in

colder climates and under shorter growing

seasons; however, many ecologists and con-

servation departments consider it an invasive

species because it frequently out competes and

threatens natural wetland species.

In general, grasses grown for energy are man-

aged for biomass yield rather than forage or

nutritive quality. In fact, lower nutrient levels

(nitrogen, sulfur, chlorine, etc.) may improve

fuel quality and reduce emissions. As expected,

the growth and yield of the grass crop is highly

dependent on soil conditions, moisture, fertil-

ity, weed control, and timing of harvest. Dur-

ing the growing season, modest use of fertiliz-

ers may be needed to maintain soil fertility and

improve crop yields. Careful attention must be

paid to ensure that crops are not over-fertil-

ized for risk of leaching surplus nutrients into

ground and surface waterways.

6.2.2 Woody Plants (Energy Crops). Wil-

low and poplar were reviewed and considered

as potential energy crops for this study. Willow

and poplar coppice have potential as dedicated

energy crops, but were largely not included

as part of the core analysis conducted for

this study (with exception of the Aggressive

model run). For one, these woody shrubs are

intensive to grow and are expensive when all

the costs of cultivation, fertilization, planting,

weed control, and harvesting are factored in.

Harvesting willow and poplar coppice also

requires specialized harvest equipment that is

not typically owned by farmers. Lastly, willow

and poplar coppice are suitable for biomass

fuel for large boiler systems but are not as

attractive for pellet making due to the rela-

tively high bark and foliage content in shrubby

willows as compared the proportionally lower

amount contained in larger diameter logs.

Bark and foliage have dramatically higher ash

content than “white” wood fi ber from the

inside of tree stem.

39


6.3 DEDICATED ENERGY CROP

POTENTIAL

Similarly to the wood fi ber assessment de-

scribed previously, the total agricultural land

footprint within Addison County was reduced

to the existing and functional footprint of

agricultural lands that could be converted to

energy crops. This agricultural land area was

categorized by its dominant agricultural use

and further fi ltering was conducted to ensure

“prime” agricultural land most suitable for

food and feed production was not counted.

The amount of agricultural residues and the

potential amount of agricultural feedstock

that could be grown within Addison County

was quantifi ed. This analysis focused on two

grasses as energy crops (switchgrass and reed

canarygrass) and, to a limited extent, willow.

Best available information was used to deter-

mine growth rates for each crop and three

scenarios compared different target acreages

to be converted to these energy crops. The

result was an estimation of the total amount

of agricultural feedstock that could be grown

for pellet production in Addison County. This

process is outlined as follows.

1. Determine the total agricultural land area in

Addison County at the town level.

2. Perform spatial analysis to fi lter out inac-

cessible and inappropriate agricultural land

and categorize based on agricultural use.

This was done sequentially so that areas

were not double-counted if they fell within

more than one inaccessible category.

3. Gather available information regarding agri-

cultural residues.

4. Model the various scenarios for dedicated

energy crop yields for Addison County at

the town level.

5. Examine planting, cultivation, harvesting

and transportation costs and market pricing

for energy crops to estimate the fi ber prices

to be expected by a pellet mill.

Switchgrass

(Panicum virga-

tum) is native to

the United States

and is one of the

best non-woody

energy crops be-

cause of its peren-

nial growth habit,

high yield potential

on a wide variety

of soil conditions

and types, compat-

ibility with con-

ventional farming

practices, and

value in improv-

ing soil and water

conservation and

quality.

40


6.3.1 Calculated Agricultural Area. The

fi rst step toward determining the potential

agriculture fi ber resource capacity is to deter-

mine how much agricultural land exists in the

county and explore its current use. To do this,

the Common Land Unit (CLU) spatial data

layer, maintained by the USDA Farm Service

Agency, was updated at the University of

Vermont’s Spatial Laboratory using 2003 im-

agery to show crop cover and pasture/subur-

ban areas. The suburban lawns were removed

and the crop and pasture feature classes were

merged to create a single detailed agricultural

layer. Of the total land area in Addison County

(516,895 acres), approximately 26 percent or

133,946 acres is agricultural land. This GIS

data layer categorizes the total agricultural

land into fi ve main groups: corn, hay, pasture,

urban pasture, and other. These categories ap-

proximate the total acreage that, at any given

time, is in corn production, hay production,

pasture use, idle urban pasture, or other. It is

important to note that corn and hay are often

rotated and to defi nitely categorize agricultural

land as corn or hay seems to ignore the reality

of typical crop rotations. However, the impor-

tant point to consider here is that this informa-

tion gives the user an approximate quantifi ca-

tion of the amount of agricultural land that is

in corn, hay, and so on at any given time.

While this starting CLU data source accurately

depicted the total agricultural land area, it con-

stituted too broad a measure of the functional

agricultural land area. This study fi ltered the

base layer of agricultural lands in a similar way

as the forested footprint (in ArcGIS) to ac-

count for the following factors:

• slope greater than 12 percent grade,

• wetlands (including 50 foot buffers),

• streams (including 50 foot buffers),

• other designated habitat areas,

• roads (including 25 to 50 foot buffers)

• buildings and three acre buffers surround-

ing them,

• and other developed spaces such as drive-

ways.

Figure 26 on the following page shows, by town

and by crop category, total starting agricultural

land area, the amount of land fi ltered out by

spatial analysis (by town only), and the remain-

ing agricultural land that serves as the function-

ing agricultural footprint for this assessment.

Using the fi lters described above, this analysis

concluded the actual functioning footprint of

agricultural land in Addison County is 98,626

acres, a 26.4 percent reduction from the start-

ing 133,946 acres. As a comparison to the spa-

tial analysis performed for this study, the 2007

Census of Agriculture reports that there are

102,629 acres of harvested agricultural land in

Addison County.17

Figure 27 on page 43 shows total agricultural

land area in Addison County and the por-

tions fi ltered out using spatial analysis (in red).

The agricultural area that is showing through

represents the remaining agricultural land that

serves as the functioning agricultural footprint

for this assessment. (This is a spatial depiction

of the same results shown in the table above.)

A full-size version of this map is included as

Appendix B of this report.

Figure 28 on page 43 illustrates the makeup of

the total starting and remaining functional ag-

ricultural land area in Addison County and its

distribution between corn, hay, pasture, urban

pasture and other.

Figure 26 (opposite

page).

17 Table 9 – 2007 Census of Agriculture – County Data compiled by USDA, national Agricultural Statistics Service.

41

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42


6.3.2 Calculated Crop Yields. Once spatial

analysis determined that the total functional

agricultural footprint in Addison County is

98,626 acres (and the acres in each of the fi ve

agricultural use categories), further assessment

was needed of the amount of agricultural land

that could be used to grow some dedicated

energy crops to supply a potential pellet mill.

Due to the lack of available spatial data easily

delineating “prime” agricultural land from the

targeted “marginal” agricultural land for grow-

ing energy crops, BERC developed a model to

calculate this crop yield potential using agricul-

tural land area and crop yield data and several

key assumptions as inputs. The model allows

the user to test crop yield scenarios by explor-

ing two main variables: the crops grown and

the amount of each category of agricultural

land to convert to dedicated energy crops. For

this analysis, extremely small percentages of

the functional agricultural land were targeted

for dedicated energy crops due to the current

lack of market demand for this type of crop

and the desire to avoid planting energy crops

where food and feed crops are needed.

Figure 27 (top).

Figure 28

(bottom).

43


Countless different model runs could be per-

formed and numerous runs were, however for

discussion purposes three main model runs will

be presented: This report presents conserva-

tive, moderate, and aggressive estimates of the

dedicated energy crop yield potential in Addi-

son County. Each run assumed the same aver-

aged growth rate for each crop; however, they

differed in the amount of agricultural lands

targeted, by agricultural land category and for

each energy crop. The moderate assessment is

likely to be the best depiction of reality, with

the conservative and aggressive assessments

serving as bookends of the possible range.

For the reasons detailed above, this analysis

focused on the potential for perennial grasses,

such as switch grass and reed canarygrass, and

to a limited extent, woody plants like willow.

To quantify the amount of each that can be

grown annually in Addison County, per-acre

yields and target acreages were assumed for

each grass and energy crop.

Figure 29 below shows the assumptions used

in each run of the analysis. Since the moderate

assessment is likely to best refl ect reality, these

assumptions are shown in a darker font for

emphasis.

Key Assumption Inputs Used in Three Agricultural Fiber Yield Model Runs

Perennial Grasses

Target Corn Acreage for Perennial Grass 0% 0% 5%

Target Hay Acreage for Perennial Grass 2% 5% 10%

Target Pasture Acreage for Perennial Grass 2% 5% 15%

Target Other Acreage for Perennial Grass 0% 0% 0%

Target Urban Pasture for Perennial Grass 2% 5% 20%

Perennial Grass Averaged Yield per acre (DT) 2.79 2.79 2.79

Moisture Content of Harvested Grass 15% 15% 15%

Willow Coppice

Target Corn Acreage for Willow 0% 0% 0%

Target Hay Acreage for Willow 0% 0% 10%

Target Pasture Acreage for Willow 0% 0% 10%

Target Other Acreage for Willow 0% 0% 0%

Target Urban Pasture for Willow 0% 0% 2%

Willow Averaged Yield per acre (DT) 3.00 3.00 3.00

Figure 29.

AggressiveConservative Moderate

44


Projected Annual Dedicated Energy Fiber Crop Yield (green tons)

Addison 604.55 1,511.37 7,362.77

Bridport 775.60 1,938.99 9,052.49

Bristol 108.29 270.72 1,351.57

Cornwall 263.87 659.67 3,126.26

Ferrisburg 537.72 1,344.29 6,430.59

Goshen 4.75 11.88 55.72

Granville 11.08 27.69 128.67

Hancock 4.76 11.90 54.05

Leicester 52.49 131.23 600.35

Lincoln 49.66 124.14 582.08

Middlebury 248.16 620.39 2,952.26

Monkton 207.33 518.33 2,438.26

New Haven 471.47 1,178.67 5,612.43

Orwell 545.20 1,363.00 6,320.24

Panton 239.95 599.86 2,884.87

Ripton 6.90 17.25 84.29

Salisbury 93.34 233.36 1,141.64

Shoreham 606.44 1,516.09 7,079.89

Starksboro 72.90 182.25 921.31

Vergennes 19.77 49.43 229.27

Waltham 109.08 272.71 1,288.81

Weybridge 151.023 77.56 1,879.08

Whiting 119.55 298.88 1,415.82

TOTAL 5,303 13,259 62,992

Figure 30.

Conservative Perennial Grass Yield

Moderate Perennial Grass Yield

Aggressive Yield (Perennial Grass and Willow)

45


Using the data assembled and the key as-

sumptions listed above, the three model runs

yielded the results in Figure 30 on the previous

page. Again, the results of the moderate assess-

ment are shown in a darker font for emphasis.

The agricultural fi ber yield capacity for Addi-

son County (13,259,050 green tons per year

according to the moderate assessment shown

above) nearly matches that of the wood fi ber

capacity in Addison County. However, if more

agricultural land were cropped with dedicated

energy crops such as grasses the capacity would

far exceed the capacity of further wood fi ber.

This is due to the fact that agricultural systems

are capable of producing dramatically higher

yields per acre per year (2 to 10 dry tons)

than forests that are harvested on a sustained-

yield basis (0.25 to 1.0 dry tons of net annual

growth) and the fact that Addison County is

the least forested county in all of Vermont.

Even the model runs tested above, which

targeted very small percentages of the total

agricultural land area, yielded volumes equal to

the forest fi ber yields after current wood fi ber

demand was accounted for.

Despite the potential for more fi ber from ag-

ricultural source than from wood, a pellet mill

is unlikely to consume fi bers based on avail-

ability alone. Pellet mill businesses must also

factor the price of the different fi ber sources

and market demands in terms of the pellet

fuel quality: Do pellet buyers want industrial

grade pellets with high ash content or do they

demand premium pellets with the least pos-

sible amount of ash? While pellets containing a

high percentage of grass fi bers could produce a

pellet of “Utility” grade, there is currently no

market for utility grade pellets in the north-

eastern United States.

6.4 AGRICULTURAL RESIDUE AND

ENERGY CROP PRICING

To determine the likely costs of both waste hay

and dedicate energy crops such as perennial

grass typical market prices for a range of hay

quality were examined. Figure 31 below shows

both the typical cost per bale and the cost per

green ton for various grades of hay quality in

Vermont. As Figure 31 illustrates, the cost per

ton for mulch hay ranges in the $75 to $100

per ton price range. If waste hay were to be

used for pellet making it would need to pay as

much as mulch hay markets.

Figure 31 refl ects the market typical market

prices of hay, but it is also important to better

understand the cost to actually produce the

grass fi ber. There is a lack of solid information

pin-pointing the production costs of dedicated

energy costs and the information that is avail-

able presents a wide range of costs depending

on what specifi cally is included. Several sources

for determining grass fi ber prices were exam-

ined and Figure 32 on the following page was

crafted in summary.

Market Prices for Hay

High-quality Feed Hay (small square bale) $5 $200

High-quality Feed Hay (round bale) $50 $125

Low-quality Feed Hay (small square bale) $3.50 $140

Low-quality Feed Hay (round bale) $40 $100

Mulch Hay (small square bale) $2.50 $100

Mulch Hay (round bale) $30 $75

Figure 31.

18 Assumes the average weight of a small square bale is 50 pounds and the average weight of a round bale is 800. 18 Assumes the average weight of a small square bale is 50 pounds and the average weight of a round bale is 800.

Approximate $/ton18

Price per Bale

Type of Hay

46


Costs to Produce Hay19

Cost Range (ton) Avg. Cost (ton)

Land use $0 - $20 $12

Cost to cultivate, plant, $10 - $60 $57cut, ted, rake, and bail

Cost to haul to mill $2 - 20 $10

Total cost $50 - $100 $79/ton

Figure 32. UVM Extension Professor, Dr. Sid Bosworth,

recently analyzed the yields and costs to produce

grass for energy in Vermont and concluded that

it costs approximately $249 per acre and, at an

average yield of eight 900-pound round bales

per acre (3.6 tons), roughly $69 per ton with-

out transport. When transport costs (often using

smaller trucks with smaller payload capacity) of

round bales from all over Addison County are

factored, the estimated price per ton is $79.

6.5 AGRICULTURAL FIBER

ASSESSMENT CONCLUSIONS

It is possible to produce pellets using natural

fi bers other than wood. Addison County is rich

in agricultural land suitable for growing grasses

and dedicated energy crops that could be used as

feedstock for making fuel pellets. Nearly 26 per-

cent of the county is agricultural land and about

74 percent of this was found to be accessible

and functional after GIS fi ltering for physical

limiting factors. A moderate assessment of the

yield capacity of energy grasses was 13,259 tons

per year, though sensitivity analysis showed this

capacity could be as little as 5,303 tons of grasses

per year or as much as 62,992 tons of grasses and

willow. The agricultural lands targeted for grow-

ing energy crops in this assessment are a very

small percentage of total agricultural

lands in Addison County. It found

that the agricultural yield capacity far

exceeds the wood fi ber capacity for

Addison County.

There are signifi cant efforts under-

way to build a grass pellet industry

especially in the mid-western US

where forest resources are limited.

However, pellet fuel made exclu-

sively from wood fi ber dominates

the US pellet fuel market and the

residential and small commercial

heating markets do not currently use heating

appliances capable of reliably and conveniently

burning pellets made from 100 percent agri-

cultural fi bers. While pellets containing a high

percentage of grass fi bers could produce a pellet

of “utility” grade, there is current no market for

utility grade pellets in the northeastern US.

Additionally, grass fi ber for pellet making is

likely to cost over 50 percent more than wood

fi bers produced from roundwood20. As was

shown above, grass fi ber would likely cost $79

per ton as compared to $31.50 per ton for

roundwood. Grass fi ber also has as much as 12

times more ash content than wood fi ber. These

two major factors are signifi cant limitations

of the viability of a pellet mill business model

with a strong emphasis on grass fi ber as a feed-

stock. To develop a successful business plan,

the pellet mill owner will likely emphasize

producing pellets that meet the needs of the

existing market and have the greatest potential

to expand and grow the pellet heating mar-

ket. At this time, that product is wood pellets.

Further ongoing research and development of

pelletized grass is important should the market

needs, combustion technology, and costs of

wood fi ber dramatically change in the future.

19 Based on analysis by Dr. Sid Bosworth, “Grass Energy in Vermont” PowerPoint Presentation, 2009.20 Even after differences in moisture content of grass and wood are accounted for.

47


A pellet mill is very similar in nature and op-

erations to a sawmill—raw wood is delivered

and stored at the facility, large pieces of wood

are made into smaller pieces, wood is dried to

add value, and fi nished, value-added product

is shipped out to various markets. Understand-

ing the options that exist for siting a pellet mill

constitutes an extremely important piece of

determining the overall feasibility of a pel-

let mill in Addison County. This section of

the report identifi es possible sites throughout

Addison County that could serve as possible

pellet mill locations. The sites identifi ed and

reviewed in this report are not a defi nitive list

and other possible sites may have been missed

or intentionally excluded because the site’s

owner did not wish their site to be listed in the

report.

7.1 PRELIMINARY SITE

IDENTIFICATION CRITERIA

The study identifi ed areas within Addison

County that are zoned commercial and in-

dustrial and are greater than fi ve acres. Those

near to the center of Addison County received

priority for good overall access to all 23 towns

within the county. Criteria for site selection

included:

• Industrial or equivalent commercial zon-

ing (pellet making at the commercial scale

requires appropriate locations intended for

industrial activities)

• Parcel size greater than fi ve acres (between

the buildings and the area needed to store

raw wood fi ve acres is the minimum land

requirement)

• Potential for truck access (a small pellet

mill requires on average 20 tractor trailer

loads of wood delivered each week)

• Proximity to three-phase electric (pellet

mills use large amounts of electricity and

require three phase)

• Distance to rail-spur (while not essential

access to rail lines provide a pellet business

greater fl exibility for importation of fi bers

or export of fi nished pellets)

• Proximity to residential areas (pellet mills

can produce noise and dust from truck traf-

fi c, bucket loaders, and outdoor debarking

and chipping of roundwood)

• Overall compatibility with current or his-

toric use (pellet mills can fi t better at sites

where there is established activity similar to

the nature of a pellet mill)

• Landowner interest and willingness to be

considered as a potential site (for all the po-

tential sites listed in this report permission

from the current landowner was secured)

Figure 33 on the following page shows the

areas in Addison County that are zoned com-

mercial and industrial and that are greater than

fi ve acres. The digital zoning maps for each

town in Addison County (with the exception

of Hancock and Granville) were compiled and

their zoning codes were reviewed to iden-

tify a common “industrial” zoning category.

Additional GIS data layers (proxy data layers

to estimate three phase power line locations)

were also used. This GIS analysis served as

the basis for the preliminary identifi cation of

dozens of possible pellet mill sites. A full size

map is included at the end of this report as

Appendix C.

7.0 Potential Pellet Mill Site Identifi cation

48


It should be noted that both the towns of

Hancock and Granville do not have local zon-

ing and therefore did not mesh with our meth-

odology. While our methods led us to focus on

the other towns of Addison County, it should

be noted that both Hancock and Granville

could potentially host a pellet mill.

In addition, the study included a review of

commercial and industrial zoned buildings

and properties listed by commercial real estate

agents. BERC and the steering committee

reviewed numerous vacant facilities, but very

few met the needs of a pellet fuel manufactur-

ing business.

7.2 SELECTED SITES AND OVERALL

SUITABILITY FOR BIO-FIBER FUEL

PRODUCTION

7.2.1 Preliminary Site Selection. Examin-

ing the details of each of the sites identifi ed

allowed the study team to create a shorter pre-

liminary list of eleven possible sites as potential

locations for a pellet

fuel production facility

based on their size and

suitability using the cri-

teria mentioned above.

Figure 34 lists these

sites. Additionally, the

following sections give

more detailed discussion

on select sites where the

landowner expressed

interest in their land

being listed as a possible

location.

Preliminary List of Selected Sites for a Pellet Manufacturing Facility

Town Location Property Owner Current Use

Middlebury Middlebury Industrial Park site `Middlebury College Open Land near end of Industrial Ave

Vermont Natural Ag Products Foster Brothers Farm Open Land – OMYA Quarry

Bristol Claire Lathrop Sawmill Jim Lathrop Wood fuel processing yard

A Johnson Company Johnson Family Sawmill

White Pigment Mill Phoenix Feed Storage & grain – Phoenix Feed Mill mill

Shoreham Shoreham Coop Barney Hodges Idle apple packing (now Sunrise Orchards) & distribution center

Granville Granville Manufacturing/Bowl Mill Jeff Fuller Clapboard & Bowl Mill

Hancock Vermont Plywood VEDA Former Plywood Mill

49


Figure 33

(opposite page

top).

Figure 34

(opposite page

bottom).

Figure 35

(above).

7.2.2 Detailed Site Review. BERC visited

the locations discussed below and spoke

with landowners to assess suitability for and

gauge interest in developing or co-locating a

pellet mill at each site. The following section

provides an in-depth discussion of the top fi ve

sites identifi ed and their relative strengths and

weaknesses as a potential site for a pellet mill.

Full-page versions of the maps shown here

are included as Appendices D-H at the end of

this report.

Middlebury Industrial Park

There are several possible sites for a small

pellet mill located within the Middlebury

Industrial Park (MIP). There are two main

parcels from the currently permitted Phase I

build out of the Industrial Park that are for

sale. These are:

1. Redstone – 10-acre parcel on Pond Lane,

listed for $240,00021

2. Middlebury College – Lot #4 -5.1-acre

parcel listed for $142,30022

These two sites are both open, undevel-

oped land and are located on relatively level

ground. There is suffi cient space for truck

access, wood receiving and storage, wood

pre-processing, and the building to house the

mill itself, assuming it is a small pellet mill. In

addition to these two sites within the existing

phase I development of the industrial park,

there are several more parcels further to the

North that could become available in the fu-

ture should access and permitting be pursued

as part of the phase II development of the

MIP.

These sites are located near a rail line but there

is no current spur to the parcels. These sites

have immediate access to three-phase elec-

tric lines. The sites are surrounded by other

industrial and commercial activities and are far

removed from the nearest residential area.

These sites are ideal for new construction of a

small to medium sized pellet mill (three to six

tons per hour) but would be a comparatively

expensive option for a developer to pursue

compared to locating a site with existing build-

ings and developed infrastructure.

21 Personal communication , Duncan Harris, Redstone Real Estate.22 Personal communication, Thomas Corbin, Middlebury College.

50


Vermont Natural Ag Products - OMYA

Quarry

The Foster Brothers Farm located on Lower

Foot Street in Middlebury operates a large-

scale manure composting operation on its

property. There is an area of land to the east

of the main composting facility that would be

an ideal location for a pellet mill. This land is

currently used as corn and hay fi eld, but given

its proximity to both the composting opera-

tion and the OMYA quarry to the northeast, it

well positioned logistically for locating a pellet

mill. The land is currently zoned as agricultural

and this site could only be viable if the Town

of Middlebury made a zoning classifi cation

change.

This site has access to three-phase power and

truck access is good. One added possible ben-

efi t is that the planned rail spur to the OMYA

quarry is to be routed through this area.

Should a pellet mill be located at this site, ac-

cess to the rail line could prove advantageous

to a pellet mill for two main reasons: oppor-

tunity to draw in fi bers and distribution of

fi nished product via rail. This site could likely

accommodate a large pellet mill (upward of 12

tons per hour capacity) given the amount of

space.23

23 Further detailed, site-specifi c analysis would be necessary to fully determine the maximum sized pellet mill that could be located at this site.

51

Figure 36.


Claire Lathrop Former Sawmill

Located in the center of Bristol is a former

sawmill site owned by James Lathrop. This site

is 12.37 acres and is located off South Street.

The sawmill, which was founded in 1878

and operated by several generations of the

Lathrop family, closed its operations in 2006

and sold off much of the sawmill process-

ing equipment. Although the Lathrop family

closed the sawmill operation, they continue

to use the site and several of the buildings for

logging equipment maintenance, low-grade

roundwood storage, and wood fuel process-

ing. Today, Lathrop Forest Products processes

fuel chips for electric power plants and services

dozens of institutional heating systems with

more specialized bole chips. Lathrop Forest

Products also processes and sells fi rewood to

the home heating market.

While there is currently and has historically

been a steady stream of truck traffi c delivering

raw wood and trucks distributing processed

wood, the access to the site is through a resi-

dential area. The site has no rail access but does

have three-phase electric access. Distances to

nearest residential neighbors are quite close, but

current operations generate similar amounts

of noise and dust from trucks and heavy-duty

chipping and processing equipment.

This site is located in a “mixed use” zoned

area of town that allows “light manufacturing”

rather than an Industrial zone. However, given

the similarity of the nature of the current and

historical use it is possible a local zoning “con-

ditional use” exemption could be secured for a

pellet mill at this location. It is possible to ac-

commodate a small to medium sized pellet mill

at this location (3 to 6 tons per hour capacity).24


52

Figure 37.


A Johnson Company

The A Johnson Company owns and operates

a large sawmill on the south end of Bristol

located off Route 116. This sawmill has been

operating at its current location since 1937.

The sawmill operation is located on 58.57

acres of industrially zoned land. The sawmill

currently occupies a majority of the lot, but ac-

cording to Dave Johnson, a small- to medium-

sized pellet mill operation could be located

(with some rearranging of their yard) in the

southwest corner of the site.

This site has excellent truck access directly off

Route 116. There is no rail access. The sawmill

has three-phase power. Nearest neighbors are

set back a few hundred yards. It is possible a

small to medium pellet mill (3 to 6 tons per

hour capacity) could be located at the A John-

son sawmill.25


53

Figure 38.


White Pigment Mill – Phoenix Feed Mill

In the town of New Haven, near the intersec-

tion of Route 7 and Route 17 is an existing

industrial facility located on 25 acres between

Route 7 and the Vermont Railway’s rail line.

This facility was originally used for processing

and shipping white pigment products from

limestone. Several years ago a locally-owned

company, Phoenix Feeds, purchased the idle

facility from Vermont Railway and began

operating a grain and feed supply business that

imports bulk grain by rail and distributes to

local farmers via trucks.

Truck access to the site is excellent—directly off

Route 7 into the yard. The site also currently

has rail offl oading capabilities and railcar load-

ing for possible product distribution is possible.

The current feed operation only occupies

one of the existing three buildings, the largest

of which is 15,000 square feet. The current

owner, Craig Newton, has expressed interest

in possible new opportunities and stated he

felt pellet production or pellet importing was a

compatible activity with the current use.

The site is serviced with three-phase power.

There are several other businesses nearby: a

construction company, an auto dealership, and

a gas station. While the site is highly visible

from Route 7, a prime tourist travel corridor,

there is an acceptable setback distance to the

nearest residents. It is possible a small to me-

dium pellet mill (3 to 6 tons per hour capacity)

could be located at the Phoenix Feed Mill.26

In addition to the fi ve sites detailed above

both the Granville Manufacturing site in Gran-

ville and the Former Vermont Plywood facility

in Hancock are both potential sites on the far

Eastern side of the county.


54

Figure 39.


8.1 PRIMARY MARKETS FOR WOOD

PELLETS

There are two main markets for pellet fuel:

residential and commercial. For the residential

market, wood pellets are sold in 40-pound

bags at farm or building supply stores. Small

commercial- or institutional-scale applications

require larger quantities of pellets because

these facilities tend to be larger in size and

have a higher heating load. For these applica-

tions, the 40-pound bag would be far too

cumbersome and laborious; therefore, bulk

delivery and on-site storage are essential for

small-commercial or institutional pellet heat-

ing systems. With bulk delivery, the customer

is charged per ton delivered, the price typically

including a per-load fee scaled to the distance

of the delivery.

Addison County has several options to consid-

er for the delivery of pellets from manufacturer

to customer. For example, 40-pound bags can

be sold directly from the manufacturer (cus-

tomers may be given the option to pick up

the fuel themselves, often saving the customer

money) or bags can be sold through local

retailers. For bulk quantities, pellets can be

sold through a distributor or directly from the

manufacturer, requiring the manufacturer to

have an appropriately-sized delivery truck with

fuel delivery systems.

These options will impact the price to the

customer for the material, and therefore can

be an important factor in anticipating markets

and the profi tability of the business model.

The table below shows the price, from the

customer’s perspective, of heating with wood

pellets compared to heating with oil, propane,

or cordwood on a per million Btu basis.

8.0 Pellet Fuel Market Assessment for Addison County

Comparison of Heating Fuel Costs

Oil gallon $2.65 138,000 0% 75% 0.104 $25.60

Propane gallon $2.44 92,000 0% 90% 0.083 $29.47

Pellets ton $280 16,800,000 5% 85% 13.6 $20.64

Cordwood cord $225 -- seasoned 60% 13.2 $17.05

* $280 per ton for pellets refl ects an average regional price at the mid-point between pricing for bulk pellets, which may be lower than $280 per ton, and pricing for bagged pellets, which may be closer to $290 per ton.

Figure 40.

Cost per Unit

Fuel Type Unit Cost per MMBtu After Combustion

MMBTU per Unit After Combustion

Average Seasonal Effi ciency

Moisture Content

BTU per Unit (dry)

55


A current regional average price for pellets

was considered ($280 per ton), compared to

current regional prices for the other fuels. As

can be seen in the table shown here, cordwood

is the least expensive fuel to heat with, cost-

ing $17.05 per million Btu produced (after

combustion, or after factoring in the impact

on cost from moisture content and average

seasonal effi ciency of the heating equipment

for each fuel). Propane, on the other hand, is

the most expensive fuel to heat with at $29.47

per million Btu, followed by oil at $25.60

per million Btu. Wood pellets would save the

average customer about $5 per million Btu

compared to oil and about $9 per million Btu

compared to propane.

Careful consideration will need to be given to

the impact on pellet pricing when developing

a pellet fuel business plan. Pellet fuel prices

must offer measurable cost savings over oil

and propane if more pellet heat market growth

is to occur. The chart below gives a one-year

history of the falling price of traditional fossil

heating fuels.

While this current trend is not great news for

the pellet heating industry, a closer look at

longer term price trends shows wood pel-

let prices typically escalate one or two points

above general infl ation and the mean price of

oil, for example, may escalate at a rate two to

six points greater than general infl ation over

time. If the longer term trend of escalating

regional fossil heating fuel prices continues,

pellets (still escalating at a slower rate) will

likely become increasingly cost-competitive

with other heating fuels (with the exception of

cordwood, which has historically escalated at a

rate lower than general infl ation).

While the main target markets for pellet

heating are propane and oil, there has been

evidence of pellet heating appliances replac-

ing fi rewood heating. It is important to note

that the average customer will not likely save

money by converting from heating with cord-

wood to heating with pellets. They will save

time and effort due to the increased automa-

tion of pellet heating. So, in the case of poten-

tial pellet customers who are currently heating

with cordwood, price may not be as much of a

factor in a conversion to pellet heating.

Figure 41.

56

One-Year Price Trend$5.00 ________________________________________________________________________________________$4.75 ________________________________________________________________________________________$4.50 ________________________________________________________________________________________$4.25 ________________________________________________________________________________________$4.00 ________________________________________________________________________________________$3.75 ________________________________________________________________________________________$3.50 ________________________________________________________________________________________$3.25 ________________________________________________________________________________________$3.00 ________________________________________________________________________________________$2.75 ________________________________________________________________________________________$2.50 ________________________________________________________________________________________$2.25 ________________________________________________________________________________________$2.00 ________________________________________________________________________________________$1.75 ________________________________________________________________________________________$1.50 ________________________________________________________________________________________

Aug ‘0

8

Sep ‘0

8

Oct ‘0

8

Nov ‘0

8

Dec ‘0

8

Jan ‘0

9

Feb ‘

09

Mar ‘0

9

Apr ‘0

9

May ‘0

9

Jun ‘

09Ju

l ‘09

Aug ‘0

9

Fuel Oil

Kerosene

Propane

Gasoline

Diesel


8.2 RESIDENTIAL MARKET IN ADDISON

COUNTY

8.2.1 Estimating Annual Pellet Demand

for Residential Heating in Addison County.

The fi rst step in estimating the potential resi-

dential heating market for wood pellets is to

determine the current market demand for pel-

let fuels. The most recent census data (2000)

showed that Addison County has a total of

13,068 households. If the average household

is 2,000 square feet, then there is a total of

26,136,000 square feet of heated residential

area in Addison County. Figure 42 on the fol-

lowing page shows the population, number of

households, and estimated number of heated

residential square feet in Addison County by

town.

The Vermont Department of Public Service’s

Firewood Survey results (1997) showed that

the primary heating fuels used in Addison

County are oil (47 percent), propane (23

percent), and cordwood (18 percent). This

means that approximately 12,283,920 square

feet in Addison County are heated with oil,

6,011,280 square feet are heated with pro-

pane, and 4,704,480 square feet are heated

with cordwood.

There is extremely limited information avail-

able on the amount of pellet heating in the

United States, in the State of Vermont, or in

Addison County. However, a recent study con-

ducted by Macro International for the State

of Vermont concluded that 2.79 percent of

Vermont homes are currently heated in full or

in part by pellets. Therefore, the total annual

pellet demand for residential heating currently

is 2,313, tons of pellets. While this constitutes

a healthy market, it is not suffi cient to sup-

port a fi nancially viable pellet mill sized to the

service Addison County alone.

There are, however, numerous indicators that

pellet heating will continue its growth for the

next several years, especially in the Northeast-

ern US. Future demand for pellets is likely to

grow. For one, the VDPS Firewood Survey

Data (2009) reported that, of those respon-

dents who indicated they were planning to

install a wood heating system, over 28 per-

cent said they were planning to install a pellet

stove and another 4.4 percent said they were

planning to install a central pellet furnace or

boiler (the remainder were planning to install

cordwood stoves, furnaces or boilers).

In addition, national sales of pellet-fueled

heating appliances (stoves, furnaces and boil-

ers) have been growing dramatically over the

past few years. According to the national trade

association, Hearth, Patio, and Barbecue an-

nual sales of wood pellet stoves in the US has

increased by nearly 300 percent over the past

ten years. Also, the American Recovery and

Reinvestment Act of 2009 (ARRA) includes

a tax credit for homeowners on energy im-

provements, including 30 percent (or up to

$1,500) toward the purchase and installation

of biomass heating appliances such as stoves

and boilers through the end of 2010. All of

these factors point to the potential for further

market growth in pellet heating.

Given the likely trend towards greater conver-

sion to pellet heating, a basic analysis model

was developed to determine how many tons of

pellet fuel would be needed if the percentage

of pellet heating in Addison County continued

to grow in the future. Sensitivity analysis was

conducted to estimate total annual pellet de-

mand for three projected scenarios of further

pellet heating market growth—conservative,

moderate, and aggressive.

57


Census Data and Estimated Heated Residential Area for Addison County

Population Households Population/ Total Sq. Ft.27

household

Addison 1,393 494 2.82 988,000

Bridport 1,235 456 2.71 912,000

Bristol 3,788 1,460 2.59 2,920,000

Cornwall 1,136 427 2.66 854,000

Ferrisburg 2,657 1,014 2.62 2,028,000

Goshen 227 84 2.70 168,000

Granville 303 127 2.39 254,000

Hancock 382 164 2.33 328,000

Leicester 974 391 2.49 782,000

Lincoln 1,214 462 2.63 924,000

Middlebury 8,183 2,657 3.08 5,314,000

Monkton 1,759 642 2.74 1,284,000

New Haven 1,666 613 2.72 1,226,000

Orwell 1,185 441 2.69 882,000

Panton 682 248 2.75 496,000

Ripton 556 210 2.65 420,000

Salisbury 1,090 423 2.58 846,000

Shoreham 1,222 453 2.70 906,000

Starksboro 1,898 668 2.84 1,336,000

Vergennes 2,741 979 2.80 1,958,000

Waltham 479 178 2.69 356,000

Weybridge 824 322 2.56 644,000

Whiting 380 155 2.45 310,000

TOTAL 35,974 13,068 2.66 26,136,000

27 Assumes an average household size of 2,000 square feet of heated living space.

Figure 42.

58


Conservative: Assumes fi ve percent of heat-

ing oil and propane heating market install pel-

let heating appliances and begin buying pellet

fuel in the near future.

Moderate: Assumes 11 percent of the oil heat-

ing market, 8 percent of the propane market,

and 1 percent of the fi rewood market would

convert to pellet heating in the near future.

Aggressive: Assumes 15 percent of the oil

heating market, 12 percent of the propane mar-

ket, and 2 percent of the fi rewood market would

convert to pellet heating in the near future.

Figure 43 below shows the estimated annual

pellet demand for residential pellet heating

under these three market growth scenarios.

Estimated Annual Pellet Demand for Residential Heating in Addison County

(tons/year)

Analysis Run Conservative Moderate Aggressive

Addison 114.61 225.56 317.91

Bridport 105.79 208.21 293.46

Bristol 338.71 666.64 939.58

Cornwall 99.06 194.97 274.79

Ferrisburg 235.24 462.99 652.56

Goshen 19.49 38.35 54.06

Granville 29.46 57.99 81.73

Hancock 38.05 74.88 105.54

Leicester 90.71 178.53 251.63

Lincoln 107.18 210.95 297.32

Middlebury 616.41 1213.19 1709.91

Monkton 148.94 293.14 413.16

New Haven 142.21 279.90 394.49

Orwell 102.31 201.36 283.80

Panton 57.53 113.24 159.60

Ripton 48.72 95.89 135.14

Salisbury 98.13 193.14 272.22

Shoreham 105.09 206.84 291.53

Starksboro 154.97 305.01 429.89

Vergennes 227.12 447.01 630.03

Waltham 41.30 81.28 114.55

Weybridge 74.70 147.03 207.22

Whiting 35.96 70.77 99.75

TOTAL 3,031.70 5,966.87 8,409.88

Figure 43.

59


As Figure 43 shows, a reasonable range of

estimated future pellet demand for Addison

County is between 3,032 and 8,410 tons per

year. The conservative scenario represents a

30 percent increase from where the market is

presently. The moderate scenario represents

a 258 percent increase and the aggressive

scenario represents a 364 percent increase. The

near-future residential market potential may

be closest to the moderate 5,967 tons per year

fi gure should current trends of pellet appliance

sales continue for the next few years. However,

despite these positive trends, this moderate

fi gure for demand would still be insuffi cient

to support a pellet mill serving only Addison

County. If Chittenden and Rutland Coun-

ties were also included in the potential market

(adding the two most populated counties in

the state), then annual pellet demand would

increased by an estimated additional 37,500

tons per year. Total pellet demand for all three

counties would be about 43,500 tons per

year. This aggregated three county residential

market could be large enough to support a

medium sized pellet mill in Addison County.

8.2.2 Estimating Annual Savings on

Residential Heating Costs. Potential savings

on heating costs will be an important factor

in the actual portion of residences that will

convert to pellet heating in the future. A typi-

cal Addison County residence was character-

ized and simple payback analysis of installing

a pellet stove was conducted across a range

of three heating oil prices, assuming all other

factors (capital cost, oil offset, and pellet price)

remained the same. The results are shown in

Figure 44 above.

At oil prices of $3.50 and greater, payback

would be less than three years (2.77 years). At

an oil price of $3 per gallon, payback would

be 3.88 years. At an oil price of $2.50 per

gallon, payback would be just over six years.

For the typical Addison County resident using

oil for heating, total savings might be about

$300 over the heating season, assuming pellets

would displace 65 percent of the oil used for

heat and domestic hot water. The savings to

residents will depend on the degree to which

pellets are used for heating.

Simple Payback on Pellet Heating for an Average Addison County Residence

Oil Price $2.50/gal. Oil $3.00/gal. Oil $3.50/gal. Oil

Typical Home size 2,000 sq. ft. 2,000 sq. ft. 2,000 sq. ft.

Gallons oil per year 700 700 700

Annual cost of Oil $1,750 $2,100 $2,450

Capital cost of installing pellet stove $3,400 $3,400 $3,400

Replacement of oil28 65% 65% 65%

Price of Bagged Pellets $290 $290 $290

Simple Payback on Investment 6.45 years 3.88 years 2.77 years

Figure 44.

28 Scenario assumes a pellet stove will not provide 100% of heat and does not provide domestic hot water.

60


Figure 45 shows the relationship between pay-

back and oil price: As the price of oil increases,

the payback period becomes shorter, since

savings will increase with increasing oil prices

(assuming all other factors remain the same).

The above calculation of payback does not

include the American Recovery and Rein-

vestment Act (ARRA) of 2009 tax credit

mentioned previously. Through the ARRA,

homeowners who make energy

improvements, including purchasing

and installing a biomass stove, can

receive on their federal tax return

a credit equal to 30 percent of the

cost of the energy improvement (or

stove) up to $1,500. The appliance

must be rated to greater than 75

percent effi ciency to qualify for the

credit, and manufacturers of stoves

are free to use their own methods to

calculate effi ciency as long as they

can verify the results. Homeowners

should obtain a certifi cate of quali-

fi cation from the stove dealer; the

certifi cate does not need to be fi led

with the homeowner’s tax return, but should

be kept for their records. If a homeowner were

to install a qualifying stove and received the

tax credit, simple payback on the investment

would improve considerably. Figure 46 below

shows re-calculated simple payback including

the 30 percent tax credit; in this case, the tax

credit is $1,020, shown below as a reduction

in the capital cost of installing the pellet stove.

Figure 45 (top).

Figure 46

(bottom).

Simple Payback on Pellet Heating for an Average Addison County Residence—

With the ARRA 2009 Tax Credit

Oil Price $2.50/gal Oil $3.00/gal Oil $3.50/gal Oil

Typical Home size 2,000 sq. ft. 2,000 sq. ft. 2,000 sq. ft.

Gallons oil per year 700 700 700

Annual cost of oil $1,750 $2,100 $2,450



Price of Pellets $290 $290 $290


29 Scenario assumes a pellet stove will not provide 100% of heat and does not provide domestic hot water.

61


8.2.3 Residential Market Survey Results. In

an effort to better assess both the existing and

future residential pellet heating fuel market in

Addison County, this study included an on-

line survey. A copy of this survey is included

as Appendix I at the end of this report. Please

note that while the survey gathered viable in-

formation, both the limited survey distribution

(sample size) and the low response rate dimin-

ish the overall validity of the survey results.

Nonetheless, the results are worth presenting

and discussing. The following section pres-

ents the results of the survey to supplement

the market information discussed above, but

should not be misinterpreted as being results

accurately depicting the whole of Addison

County.

Fifty-fi ve Addison County residents responded

to the on-line residential market survey, most

of who had been notifi ed of the survey by

the Addison County Chamber of Commerce.

Average home size among the respondents was

1,971 square feet. Of 55 respondents, 28 heat

with fi rewood, 27 heat with oil, 24 heat with

propane, 11 heat with pellets, four heat with

electric, three heat with solar, two heat with

biodiesel and one heats with corn (many use

more than one heating source/fuel). Figure

47 at right (top) shows the breakout of home

heating fuels among the survey respondents.

Average heating oil price among respondents

was $3.05 per gallon.

Of the fi rewood users, only four heat solely

with fi rewood; of the pellet users, two heat only

with pellets and two heat with fi rewood and

pellets only (for 100 percent wood heating).

Of 44 respondents, 24 have considered heat-

ing with pellets. Respondents said they would

be most likely to convert to pellet heating if oil

prices were $4 per gallon or more or if simple

payback on the investment was three years or

less. Figure 48 at right (bottom) shows the

likelihood of respondents to convert to wood

pellet heating across three possible payback

periods. As is shown in this chart, a payback

period of less than three years would make

respondents more likely to convert to pellet

heating. In the examples of payback period

given in the previous section, payback would

be less than three years when the oil price is $3

per gallon, the pellet price is $290 per bagged

ton, and the ARRA of 2009 tax credit is used.

Without the tax credit, payback would likely

be too long unless the oil price was $3.50 per

gallon or more.

Figure 47 (top).

Figure 48

(bottom).

62


Thirty-three of the 55 respondents comment-

ed that they decided against pellet heating,

and cited their reasons. Many respondents

reported they prefer to use cordwood (over

pellets) because:

• They have access to free wood on a family

woodlot

• Cordwood is less expensive and less pro-

cessed than pellets

• Cordwood is more locally available than

pellets

Additionally, some of the overall reasons cited

for not heating with pellets included:

• “Already have a wood stove”

• “Think pellet stoves are messy and noisy”

• “Pellet stoves use electricity”

• “Think pellet supply is not reliable”

However, 31 of 51 respondents said they

would be interested in purchasing pellets lo-

cally if a pellet mill opened in Addison County.

In a separate survey question, 44 of 51 respon-

dents said they would prefer to buy pellets

through a distributor:

• 22 of 51 would prefer to receive pellets

delivered from a distributor, and

• 22 of 51 would prefer to pick up the pellets

from a distributor, possibly saving money.

21 of 51 respondents said they would prefer

to purchase pellets directly from the manufac-

turer by the ton, possibly picking the pellets up

themselves if it meant saving money. Eight of

51 respondents said they would not prefer to

buy pellets locally. Additionally, the majority of

people surveyed (29 out of 50) would prefer to

buy their pellets by the ton in 40-pound bags.

The majority of respondents said it is very im-

portant that their pellets are produced locally (22

out of 50 respondents), harvested locally (18 out

of 50), and harvested sustainably (32 out of 50).

Figure 49.

Figure 50.

Figure 51.

63


Respondents were given the opportunity to

provide any thoughts, comments, or feedback.

The two primary themes that emerged from

the 23 comments received were (1) the im-

portance of cost as a factor in the decision to

install a pellet heating system and (2) the need

for public education around the technology,

benefi ts, sustainability, and supply of pellets.

Some noteworthy comments are included be-

low, copied from the on-line survey (grammat-

ical and spelling errors were not corrected).

• “The problem is in fi nding the money to

purchase the unit - if there could be more

loan programs, people would buy. We had

the money, but when we could not fi nd

stoves or pellets last year, we went with a

wood stove.”

• “I think it would be nice to buy locally, not

to have to drive to Burlington or Rutland.”

• “I am very concerned about the impact on

our local forests and the sustainability of

our current forested landscape.”

• “Would think about purchasing a pellet

boiler if money was available whether or

not a facility is built in Addison (although

I’d like for one to become available) as

there is one in North Clarendon.”

• “I think pellets and biomass in general in

VT should not be considered a long term

solution to our energy issues. Wind and sun

are the only truly renewable resources and

we should be emphasizing those technolo-

gies as we force policy and market shifts.”

• I will always use my woodstove for heating

as I either harvest wood off my property or

buy logs and have all equipment necessary,

also it does not require electricity for its

operation. However I still rely on my boiler

to provide backup heat and domestic hot

water and am planning to replace my exist-

ing oil fi red unit within the next 5 years.

I have considered an outside wood boiler

or replacing the oil to a gas or pellet fi red

boiler. It would be easier to retro-fi t the

existing boiler and far cheaper and logisti-

cally easier to use pellets where it is located.

If a good quality locally produced pellet

was available it would defi nitely put me at

replacing the oil fi red boiler to a pellet. My

reluctance to switching to pellets at this

point are consistent quality, price fl uctua-

tions, and not a locally (at least regionally)

produced product, I’m already paying for

oil produced and transported half way

around the world.

• Would buy pellet boiler if present oil

boiler, now converted to use B100 biodie-

sel, needed replacement. Cost of pellets

compared with other fuels would not be a

factor. CO2 emissions would be.

• I am not interested in seeing a “plant” or

manufacturing facility of any kind in my

town unless it would mean that my prop-

erty taxes would go down signifi cantly.

8.3 COMMERCIAL MARKET

8.3.1 Estimating Annual Pellet Demand for

Commercial Heating in Addison County.

While the number of residences in Addison

County was easily obtained through census

data, the number of businesses in the County

was more diffi cult to determine—especially

those with heated building space. According

to ACRPC information, there are an estimated

1,800 businesses in Addison County including

all home based businesses. A large majority of

these businesses may not occupy physical space

requiring heat not already accounted for in the

residential survey. Therefore, a conservative

estimate of 300 businesses within the County

was assumed after surveying several sources of

information.

64


The average facility size was assumed to be

5,000 square feet, knowing that some facilities

would be signifi cantly larger manufacturing or

agricultural facilities and others may be smaller

retail-type settings. Using these assumptions, the

total estimated square footage of commercial

heated space in Addison County was 1,500,000.

If 70 percent of businesses were heated with

oil, 28 percent with propane, and 2 percent

with fi rewood, and 2.79 percent of the busi-

nesses heating with each fuel already heat with

pellets the current annual demand for pellets

in Addison County is approximately 145 tons.

This amount is not suffi cient to support a pel-

let mill, even when combined with the above

estimated residential demand of 5,967 (for a

total of 6,112 tons per year, not considering

Chittenden and Rutland Counties).

Assuming, however, that interest in pellet

heating is continuing to expand and the use

of central pellet boilers (not stoves) fueled

with bulk pellets is being more available to the

commercial heating sector, additional scenarios

of possible future demand were explored:

Conservative: Assumes 4 percent of the oil

heating market, 4 percent of the propane

market, and 0 percent of the fi rewood market

would convert to pellet

heating.

Moderate: Assumes 8

percent of the oil heating

market, 8 percent of the

propane market, and 1

percent of the fi rewood

market would convert to

pellet heating.

Aggressive: Assumes 15

percent of the oil heating

market, 12 percent of the

propane market, and 2

percent to the fi rewood

market would convert to

pellet heating.

Estimated Annual Pellet Demand for Commercial Heating in Addison County

(tons/year)

Analysis Run Conservative Moderate Aggressive

County Total 202 390 676

Simple Payback on Pellet Heating for an Average Addison County Business

Oil Price $2.50/gal Oil $3.00/gal Oil $3.50/gal Oil

Typical business size 5,000 sq. ft. 5,000 sq. ft. 5,000 sq. ft.

Gallons oil per year 4,200 4,200 4,200

Annual cost of Oil $10,500 $12,600 $14,700



Price of Pellets $270 $270 $270


Figure 52.

Figure 53.

30 Scenario assumes centralized pellet boiler will cover larger percentage of heating load and provide domestic hot water as compared to residen-tial scenario of pellet stove.

65


Figure 52 on the previous page (top) shows

the annual pellet demand for commercial pel-

let heating under these three scenarios.

Figure 53 on the previous page (bottom)

shows, a reasonable range of estimated pel-

let demand is between 202 and 676 tons of

pellets per year. The near-future commercial

market potential may be closest to the moder-

ate 390 tons per year fi gure, or 6,356 tons

per year when combined with the moderate

estimate of annual pellet demand for residen-

tial heating. As was described in the residential

market discussion, adding the commercial

markets of Chittenden and Rutland Counties

would greatly increase the demand, thereby

better supporting a pellet mill business in Ad-

dison County.

8.3.2 Estimating Annual Savings on

Commercial Heating Costs. As with

residential heating, potential

savings on heating costs will

be an important factor in

the actual portion of busi-

nesses that would convert

to pellet heating. A typical

Addison County business was

characterized and conceptual

simple payback analysis for

the installation of a pellet

boiler was conducted across

a range of three heating oil

prices, assuming all other fac-

tors (capital cost, oil offset,

and pellet price) remained

the same. The results are

shown in Figure 53 on the

previous page.

At oil prices of $3.50 and greater, payback

would be less than three years (2.70 years). At

an oil price of $3 per gallon, payback would be

about 4 years. At an oil price of $2.50 per gal-

lon, payback would be more than eight years.

As with the residential market assessment

above, the payback period becomes shorter as

the price of oil increases (assuming all other

factors remain the same). For the typical Ad-

dison County business using oil for heating,

total savings might be about $780 over the

heating season, assuming pellets replace 80

percent of the oil fuel use.

Figure 54 below shows the relationship

between increasing oil prices and decreasing

payback period.

Figure 54.

66


8.3.3 Commercial Market Survey. To better

assess both the existing and future commercial

pellet heating fuel market in Addison County,

an on-line survey was designed and distributed

electronically. A copy of this survey is included

as Appendix J at the end of this report.

It is important to note that while the survey

was designed to gather statistically viable

information, both the limited survey distribu-

tion (sample size) and the meager response

rate diminish the overall validity of the survey

results. The following section presents the

results of the survey to supplement the market

information discussed above, but should not

be misinterpreted as being results accurately

representing the whole of Addison County.

Nineteen business owners responded to the

online commercial market survey. Average

facility size was 4,960 square feet among 15

of the respondents, with a 16th respondent

representing a manufacturing facility between

50,000 and 100,000 square feet (not included

in the calculation of average facility size). The

majority of business facilities are heated with

oil or propane, though some are heated with

fi rewood, pellets, or electricity. The chart

shown here gives the breakout of heating fuels

used among the survey respondents. One

facility each is heated with corn, bark chips,

and scrap wood (these are shown in the ‘other’

category on this chart).

Of the 19 business owners surveyed, 12 said

they have considered heating with pellets.

Thirteen respondents gave reasons for choos-

ing not to heat with pellets, including the cost

of the fuel (5 out of 13), the cost to install

the new system (3 out of 13), and the limited

availability of pellets (2 out of 13).

In general, the likelihood of installing pellet

heating increased with decreasing payback pe-

riods, with the majority being “very likely” to

heat with pellets if the payback period was less

than 3 years. In general more respondents said

they would consider or be likely to convert to

pellet heating with increasing oil prices.

Figure 55.

Figure 56.

Figure 57.

67


Of the 19 respondents, nine would be inter-

ested in buying pellets locally; three would

not be interested in buying pellets locally, and

seven said they might be interested in buying

pellets locally. Of 18 respondents (one skipped

this question), 12 would prefer to buy pellets

direct from the manufacturer by the ton (pick-

ing them up themselves and possibly saving

money), seven would prefer to buy them from

a distributor (picking them up themselves and

possibly saving money), seven would prefer to

buy from a distributor and have them deliv-

ered, and three said they would not be inter-

ested in buying pellets locally. Of 17 respon-

dents, nine would prefer to buy pellets by the

ton in 40-pound bags if they were available

locally, four would prefer to buy them in bulk

bags (large sacks on a pallet), four would pre-

fer to buy them in bulk (loose and delivered to

a holding bin), three would prefer to buy them

in 40-pound bags, and two said they would

not buy pellets locally. (It should be noted

here that, while this was not addressed in the

survey, pellet boilers of the size being installed

in mid- to large-sized businesses would re-

quire bulk fuel storage and delivery, since the

demand for pellets is greater. For these large

systems, handling bagged pellets would be too

cumbersome for the heating system operators.)

Among the 19 business owners surveyed, the

majority said it was very important that their

pellets be produced locally (9), harvested lo-

cally (10), and harvested sustainably (15).

Some noteworthy comments from the respon-

dents are included below, copied from the

online survey (these were not edited).

• “I would be very interested in burning

grass or local corn pellets. I would even

buy a new stove if I had to.”

• “I use pellets for my home and would love

a new source for purchasing and it would

also make the implementation of a system

in our warehouse more feasible.”

• “I have to be confi dent that the technology

and pellets will be available. I put off buy-

ing a pellet stove and/or furnace last year

because when we had the money to buy,

the supply disappeared.”

• “Sustainability is very important to me.

The biggest concern I have with an incom-

ing plant is where is the wood coming

from and how is it harvested? Is it going to

deplete the local supply of cord fi rewood

thus making it more diffi cult and expen-

sive to purchase? Maintaining forests and

maintaining air quality in the vicinity of

the plant (and down wind) are also strong

concerns of mine.”

• “Locally produced pellets sounds like a

great idea.”

Figure 58.

68


The following discussion and analysis is not

specifi c to any of the possible sites identifi ed in

section 7 of this report. In the sections below,

the conceptual design, operation, capital costs,

and business performance are explored for

three different sized pellet mills: three tons

per hour (TPH), six TPH, and 12 TPH. For

each of the three pellet mill scenarios a busi-

ness model of producing Super Premium,

Premium, and limited amounts of Standard

grade pellets in bags and bulk was used. It was

assumed that the source fi ber would be wood

and grass fi bers would not be included in the

blend for the fi rst few years.31

Pellet mill logistics—how fi bers are received

and processed—and the size of the pellet mill

can signifi cantly impact how the business func-

tions fi nancially. In this study it was assumed

that a conceptual pellet mill will receive both

wood and a small amount of grass fi bers.

It was also assumed that the majority of the

wood fi ber will be delivered to the facility as

roundwood which will require on-site debark-

ing and chipping prior to further pulverizing

and drying inside the pellet mill. Additionally,

it was assumed that the fi bers received will

require signifi cant drying using a large rotary-

drum drier and the drier will be heated by

either electricity or wood-fi red boilers.

9.1 THE MANUFACTURING PROCESS

9.1.1 Receiving and Storage. All shipments

of fi ber (roundwood, chips, or round bales

of grass) would be weighed on truck scales

upon entering the facility’s receiving yard, and

would be inspected to make sure the material

was acceptable. After unloading, the empty

trucks would again be weighed to determine

the net weight of the payload for tracking and

payment purposes.

9.1.1.1 Roundwood Receiving and Storage. Roundwood, the primary source of fi ber for

the conceptual pellet mill, would be received

and stacked in outdoor piles in the facility’s

wood storage yard. The wood storage yard

would be used to build suffi cient inventory to

ensure continued and consistent pellet produc-

tion at times when weather and road postings

limit the amount of harvesting and trucking of

wood from the forest. The wood receiving and

storage yard should be sized to hold roughly

three months worth of inventory.

9.0 Pellet Fuel Manufacturing Business Overview

31 Grass fi ber inclusion could be reexamined after a few years should the pellet market requirements change and the fi ber price differential between wood and grass decrease.

69


9.1.1.2 Chip Receiving and Storage. While a

majority of the wood yard would be dedicated

to roundwood receiving and storage, the

pellet mill would need to be able to receive

and process woodchips directly as needed.

Woodchips can be stock-piled and stored

outdoors; however, if stored for periods longer

than three months the risk for decomposition,

fermentation, and even self-ignition increases

dramatically. Due to the fact that chips are

more susceptible than roundwood to gaining

moisture by being exposed to the elements, it

is recommended that chips be stored under a

roofed area until they are used. Chips can be

delivered in live-bottom trailers but it is more

cost effective to receive chips in box trailers

which require a trailer-tipper for unloading.

If woodchips in quantities in excess of 10,000

tons per year will be used the cost and benefi ts

of installing a trailer tipper should be investi-

gated further.

9.1.1.3 Grass Receiving and Storage. Should

the decision to include grass be made at some

point in the future, hay bales can be received

and stored until they are needed to blend into

the wood fi ber mix. Bales can be stored out-

doors, but keeping them under cover of tarps

or a roof is helpful to minimize absorption of

excess moisture. While it is common to plastic

wrap hay bales for feed, it is not recommende

for grasses to be used in pellet making.

9.1.2 Feedstock Preparation and

Grinding. If Super Premium or Premium

grade pellets are desired, roundwood will need

to be stripped of its bark prior to chipping and

further grinding. If higher ash content fuel

such as Utility grade pellets was desired, the

debarking step could be skipped. But since the

majority of the pellet heating market requires

high quality and low ash content pellet fuel,

the roundwood should be de-barked. This can

be done several different ways with varying de-

grees of effectiveness: Using chain fl ail mecha-

nism, a rosser-head, or a ring debarker. The

bark stripped from roundwood can be sold as

bark mulch, stored separately and fed into the

pellet fi ber mix (though it will increase the ash

content), or used as boiler fuel to provide the

heat necessary to dry the pellet fi bers.

70


Once roundwood is debarked it can be fed

to chipping equipment which produces chips

ranging in size from 1 inch by 1 inch by 1/8th

inch to 2 ½ inches by 2 ½ inches by ½ inch.

Depending on the pellet mill’s size and capac-

ity, both the debarking and chipping can be

conducted using stationary installed on-site

equipment or by contracting a third party to

periodically debark and chip inventory on-site.

Larger pellet mills will invest in on-site debark-

ing and chipping equipment while smaller pel-

let mills may choose to contract out this step

to avoid the large capital costs of stationary

debarking and chipping equipment.

Once material is in chip form (or in loose

hay form) it is fed into the facility for further

grinding and screening to ensure a consistent

and fi ne fi ber for pellet making. Depending

on the feedstock, and particularly if multiple

feedstocks are blended, the material may

require further mixing and grinding to get an

even mixture of small particle size material.

The grinding is typically performed using a

hammer mill. While it is the goal to suffi ciently

reduce the particle size of the material for pel-

let making, it is important not to over grind

the fi bers into fl our like powder. Powdery fi nes

are extremely diffi cult to pelletize.

9.1.3 Drying. Once conveyed into the facility

the fi rst step is to dry the feedstock material

to a consistent and suitable moisture content.

This is most often performed using a rotary

drum drier (pictured here), bringing the mate-

rial to 8 to 12 percent moisture content. Ro-

tary drum driers are most commonly supplied

with hot air from a large combustion boiler/

furnace. These boilers/furnaces can be fueled

with oil, propane, natural gas but are most

commonly wood fi red. Most pellet mills use

waste wood unsuitable for pellet making (bark

from the debarking process,

etc.) as the boiler fuel. Green

fi ber for pellet making is con-

veyed into the drum and hot

air is supplied. Dry material is

removed from the back end

and the moisture rich exhaust

gas is ducted to a particulate

removal system and then

discharged via a stack. Sig-

nifi cant fi re prevention and

control systems are necessary

in the drying system (and

throughout the pellet mill)

to prevent hot air igniting

wood fi bers in the drier.

71

Pictured at right

is a rotary drum

dryer at a large-

scale pellet facility.


9.1.4 Pellet Extrusion. Once the material has

been dried and blended to optimal conditions,

it is fed into the pelletizer or pellet mill. There

are two main types of pellet mills: a fl at die

mill and a ring die mill. The fl at die type has a

circular perforated disk on which two or more

rollers rotate and force the material through

the holes. The ring die press features a rotating

perforated ring on which rollers press on the

material to the inner perimeter. A ram piston

or pressing roller (depending on the type of

mill used) on the pelletizer forces the material

through a die which molds the material into

the desired pellet shape and size. Knifes cut

the extruded material to the desired length.

The high amounts of pressure and heat cre-

ated in the process help the material to bind

(heat is generated by the piston or rollers).

For wood pellets, lignin naturally present in

the material holds the pellets together so no

additional binders are required. Other materi-

als low in lignin content, such as grasses, can

be supplemented with distilled lignin or starch

to enhance the binding of the material into a

durable pellet.

9.1.5 Cooling and Storage. Once the pellets

are made, they are spread out to cool, setting

up the lignin (or other binding material) and

hardening the fi nal product. Once cooled, the

pellets can be sieved to separate out residual

fi nes (which can be re-used for making pellets)

and then are moved to storage from where

they can be distributed or packed for use.

There is both science and art to the pellet

making process and minor changes in materials

or pellet process control can signifi cantly alter

the resulting pellet quality in terms of bulk

density, durability and fi nes content.

9.1.6 Bagging. If the pellets are not sold in

bulk, either loose or in 1 ton bulk sacks, the

pellets will be packaged into 40 pound bags

for distribution to the residential heating mar-

ket. Bagging operation can be rather low-tech

and slow or very sophisticated and capable of

producing hundreds of bags per hour. After

fi lling and sealing, the bags are stacked 50 to a

pallet (one ton) and stretch-wrapped for ship-

ment.

Figure 59 above summarizes the overall

pellet-making process.

Figure 59.

Debarking &

Chipping

Densifi cation &

Extrusion

Cooling, Storing

& Packaging

Further

GrindingDrying

72


9.2 FACILITY DESIGN OPTIONS AND

OPERATION

9.2.1 Facility Size Options. While both

the fi ber resource assessment and the market

assessment concluded there is limited sup-

ply of fi ber and market demand for pellet fuel

exclusively within the boundaries of Addison

County, it should be noted that a signifi cantly

larger scale pellet mill could be supported

by extending both the fi ber basket and the

product distribution area. For this reason the

conceptual logistics and fi nancial performance

of three sized pellet mills were examined. Fig-

ure 60 above illustrates several critical factors

for each sized facility.

As with most manufacturing businesses, econ-

omies of scale weigh greatly on the economic

viability of a pellet mill. Economies of scale in

pellet manufacturing are signifi cant, both in

the fi xed and variable costs. Larger facilities are

able to produce pellets at a lower cost per unit

than small mills can. Figure 61 on the follow-

ing page illustrates the relationship between a

pellet mill’s size and the per-unit cost to pro-

duce pellets. As is shown, while there are slight

economies of scale that apply to the capital

costs of a pellet mill, the greatest impact comes

from the operating costs.32

According to the data

presented in the graph

above, there is a three-

fold production cost

advantage between a

mill producing three

TPH and a mill pro-

ducing 12 TPH. This

large of a production

cost advantage strongly

favors the business vi-

ability of larger pellet

mills.

Most of the pellet mills recently constructed

or under development in North America are

designed to produce 12-14 TPH or approxi-

mately 100,000 tons of pellets annually. The

recently completed New England Wood Pellet

mill in Schulyer, New York and the brand

new Curran Energy pellet mill in Malone,

New York are examples of 100,000 ton per

year pellet mills. In addition nearly all pellet

mills being proposed and under development

elsewhere in Vermont and the Northeast are

slated to produce approximately 100,000 ton

annually.

In addition to economies of scale, another ad-

vantage of larger pellet mills is the amount of

operational run time. Smaller pellet mills often

have one pellet machine and should the ma-

chine breakdown or need routine maintenance

the facility is not producing any pellets. Larger

pellet mills often use multiple smaller machines

in their production line so that, should one

machine go down, there are still one or two

more machines operating.

Figure 60.

32 Graph was developed by Dr. Sudhagar Mani at the University of British Columbia and presented at a Bio-Energy conference in 2006.

Pellet Mill Size and Logistical Details

3 tons 22,500 40 19.5 8,000 4

6 tons 45,000 79 40 12,000 6

12 tons 90,000 159 79.5 18,000 8

Estimated Mini-mum Total Site Land Require-ment (acres)

Pellet Mill Hourly Capacity

Maximum yearly output

Average weekly in-bound truck traffi c

Average weekly out-bound truck traffi c

Estimated Mini-mum Required Building Size (sq. ft.)

73


9.3 CONCEPTUAL PELLET MILL

CAPITAL COSTS

The costs to construct a pellet mill vary widely

based on whether a pellet mill is built from

scratch on undeveloped land or if a pellet mill

can be built at an existing site where some

infrastructure and buildings are in place. For

this study and the following business analysis,

it was assumed that undeveloped land would

be purchased and a facility would be built from

scratch.

The following table displays the estimated

costs of building a three, six, and 12 TPH ca-

pacity pellet mill. Key assumptions embedded

in the fi gures presented are:

• The land is purchased

• The pellet mill is built on an undeveloped

site without the use of existing infrastructure

• All three size facilities include on-site

roundwood processing capacity (debarking

and chipping)

• All three used wood fi red boilers to dry

pellet fi bers

Figure 61.

74


Pellet Mill Capital Costs

Mill Capacity 3 TPH 6 TPH 12 TPH

Land Purchase $150,000 $200,000 $325,000

Site work $100,000 $150,000 $200,000

Building Construction $1,540,000 $2,100,000 $2,800,000

Wood Yard

Receiving $30,000 $50,000 $70,000

Storage $30,000 $40,000 $50,000

Processing $650,000 $750,000 $850,000

Pellet Mill

Conveyors $50,000 $65,000 $70,000

Driers + Boiler $500,000 $700,000 $1,000,000

Pelletizer $400,000 $800,000 $1,400,000

Cooling $50,000 $70,000 $90,000

Bulk Storage $50,000 $100,000 $150,000

Bagging $75,000 $120,000 $150,000

Bag Storage Included in building cost

Electric Hookup $25,000 $25,000 $25,000

Water/Sewer $10,000 $10,000 $10,000

Design $50,000 $60,000 $70,000

Permitting $25,000 $25,000 $25,000

GC mark-up $50,000 $70,000 $100,000

Contingency $567,750 $890,250 $1,227,750

Working Capital $500,000 $1,000,000 $1,900,000

TOTAL $4,852,750 $7,135,250 $10,392,750

Total (less Working Capital) $4,352,750 $6,135,250 $8,492,750

Capital Cost per Max. Ton Capacity33 $ 246.33 $ 181.10 $ 131.89

Figure 62.

33 Assumes 95% capacity production.

75


The estimated capital costs presented in Figure

62 on the previous page are based on several

published pellet mill costs, interviews with pel-

let mill owners and managers, and pellet mill

business consultants.34

It is clear that the largest pellet mill has the

lowest per unit capital cost and illustrated

earlier in the graph depicting the economies of

scale for pellet mills.

Conceptual Pellet Mill - Year-One Cash Flow

3 TPH 6 TPH 12 TPHRevenue

Bulk Sales $720,000.00 $1,440,000.00 $2,880,000.00

Bags Sales $2,538,000.00 $5,076,000.00 $10,152,000.00

TOTAL REVENUE $3,258,000.00 $6,516,000.00 $13,032,000.00

Expenses

Fiber Purchased $1,008,000.00 $1,958,400.00 $3,686,400.00

Labor $604,800.00 $1,036,800.00 $1,555,200.00

Benefi ts, fringe, etc. $151,200.00 $259,200.00 $388,800.00

Insurance $25,000.00 $50,000.00 $95,000.00

Electric $396,000.00 $792,000.00 $1,440,000.00

Equip. Maint.& Repair $100,000.00 $200,000.00 $250,000.00

Printed Bags & Packaging Supplies $216,000.00 $378,000.00 $691,200.00

Product Distribution $216,000.00 $432,000.00 $864,000.00

Advertising $15,000.00 $28,000.00 $40,000.00

Debt Service $473,294.15 $695,908.94 $1,013,616.57

Misc. $50,000.00 $75,000.00 $100,000.00

TOTAL EXPENSE $3,255,294.15 $5,905,308.94 $10,124,216.57

PROFIT/(Loss) Before Taxes $2,705.85 $610,691.06 $2,907,783.43

Taxes (Federal & Vermont) $160.87 $259,068.70 $1,235, 332.96

Profi t/(Loss) After Taxes $2,544.97 $351,622.36 $1,672,450.47

Figure 63.

34 PFI report “Equipment and operating costs for a wood pellet plant” 1994. CSU report on “Wood pellet Manufacturing Production Equipment and Cost Study for Walden, Colorado” by William and Lynch, 1995.

76


9.4 FIRST-YEAR CASH FLOW

Using the pellet mill capital costs presented

above, fi rst year cash fl ow for the three differ-

ent sized pellet businesses were developed. Key

assumptions included the following:

• 70 percent of capital cost is secured

through commercial fi nancing

• Remaining 30 percent is owner equity

• Commercial fi nancing is at 7.5 percent

• The plant is operational 4,800 hours per

year

• 75 percent of the product is sold in bags at

$235 per ton (wholesale price)

• 25 percent of the product is sold in bulk at

$200 per ton (wholesale price)

• 100 percent build out of mill capacity and

sales in year 1

• Bulk product is sold direct to the customer,

but bags are sold via a distributor

• Every ton produced is sold

Figure 63 on the previous page shows the

fi rst-year cash fl ow for each of the three pellet

business options. It illustrates the somewhat

marginal economics of the three TPH pellet

mill size as compared to the six and 12 TPH

pellet sizes on a fi rst year cash fl ow basis. While

all three of the pellet mills were cash fl ow posi-

tive in year one, the 12 TPH mill generated

roughly 657 times more after tax profi t than

the three TPH pellet mill.

9.5 CONCEPTUAL 10-YEAR PRO

FORMA FINANCIALS

Once the fi rst year fi nancial performance was

examined on a cash basis, a ten-year projection

was crafted to determine the longer term fi -

nancial performance of the three sizes of pellet

mills. These 10-year pro forma examined the

fi nancials on an accrual basis, accounting for

non-cash expenses such as depreciation.

The three TPH pellet mill generated a cumu-

lative profi t of $1.2 million over the ten-year

period. The 6 TPH facility generated $6.3

million in profi ts over ten years and the 12

TPH facility produced $11.4 million in profi t.

For full versions of the 10 year pro forma, see

Appendices K-M at the end of this report.

When the all the capital costs, working capital,

and business pro forma are analyzed there

are several main fi nancial indicators that were

examined to determine the overall fi nancial

viability of the three options—cash fl ow,

simple payback on investment, net present

value(NPV) of the investment, and the inter-

nal rate of return (IRR) for the investment in a

pellet mill.

Financial Analysis Results

3 TPH 6 TPH 12 TPH

Project Capital Costs $4,352,750 $6,135,250 $8,492,750

Initial Working Capital $500,000 $1,000,000 $1,900,000

Total Capital $5,352,750 $7,135,250 $10,392,750

Simple Payback (years) 232.19 12.03 3.59

NPV $577,599 $6,326,775 $20,743,160

IRR -5% 5% 24%

Figure 64.

77


The three TPH pellet mill option was cash

fl ow negative in the fi rst year but turning cash

fl ow positive in the second year and sustaining

continued revenue greater than expense for the

remainder of the ten year analysis period. Both

the six and twelve ton per hour pellet mill op-

tions proved cash fl ow positive in the fi rst year.

Simple payback (fi rst year profi t before taxes

divided by total capital invested) was calculated

for all three pellet mill size options and the

three ton per hour mill’s small profi t margin

would require over 200 years to pay back the

investment made in the mill. The six ton per

hour pellet mill size option generated a fi rst

year profi t margin suffi cient to pay back the

investment made in just over 12 years. The

twelve ton per hour pellet mill size option gen-

erated the largest profi t and the fastest payback

of less than four years. While simple payback

can be a helpful basic indicator of fi nancial

performance it is not sophisticated enough to

account for the changing annual performance

of a business. For this reason, both NPV and

IRR of the investment in a pellet business are

better metrics of fi nancial performance.

NPV is a very detailed fi nancial tool, that

measures the value of the invest performance

over the time fi nancial analysis time-period

(10 years) at today’s dollar value. The NPV of

all three pellet mill size options was calculated

and only the 12 TPH mill generated a NPV

greater than the total capital requirements.

IRR is based on NPV calculations but trans-

lates the fi nancial performance of an invest-

ment (like a pellet manufacturing business)

into a rate of interest earned on the invest-

ment. Most investors require a higher IRR on

the investment in a business than what they

could earn by investing their money in stocks,

bonds, and other possible investments. The

IRR of investing in a business with a high level

of risk needs to well exceed the rate of return

on lower risk investment opportunities.

The IRR for all three pellet mill size options

were calculated and only the twelve ton per

hour option generated a rate of return greater

than typical market rates of 7-9 percent.

While this analysis clearly leans toward the

larger pellet mill as the most fi nancially viable

option, it is extremely important to note that

if the cost to construct a pellet mill could be

lowered signifi cantly (such as co-locating at

an existing facility with some of the necessary

infrastructure in place) the economic indicators

would look dramatically better. The analysis

presented in this report was based on the cost

to construct a pellet mill on undeveloped land.

For example, if the 3 TPH pellet mill could be

built and launched for $3 million, the simple

payback would fall to just less than 30 years

and the IRR would increase to 4 percent. If

typical investors are looking for simple pay-

backs less than fi ve years and rates of return

better than market performance, the three

TPH size option is not viable even if the capital

costs could be trimmed down to $3 million.

9.6 PELLET FUEL MARKET

COMPETITION

According the Pellet Fuel Institute there are

currently over 80 established pellet mills oper-

ating in North America and producing in ex-

cess of 1.1 million tons annually. Not included

in this fi gure are the countless proposed pellet

mills—some of which will likely be built and

some of which will not proceed beyond the

planning stage. A quick survey of bagged pel-

let retailers in Vermont showed there are pel-

lets from New Hampshire, Maine, New York,

Pennsylvania, Colorado, British Columbia and

Quebec already being sold.

The following section reviews those existing and

proposed pellet mills within a reasonable distance

from Addison County. Some of these mills may

be in direct competition with a mill in Addison

County for feedstock as well as for pellet sales.

78


9.6.1 Pellet Mill Competitors. Figure 65 be-

low shows the location of existing pellet mills,

and the green area around each mill represents

a 90-minute drive time radius from that mill.35

The following are descriptions of the existing

pellet mills depicted in the map above:

Vermont Wood Pellet Company LLC

www.vermontwoodpellet.com

Vermont Wood Pellet just began commercial

production of pellets in September of 2009 in a

converted pallet mill in North Clarendon, Ver-

mont that went out of business a few years ago.

Vermont Wood Pellet purchases pine pulp-

wood as it main fi ber and produces loose bulk,

bulk sack, and 40 pound bags of premium

pellets. This 10,000 ton per year mill is the

closest possible competitor located approxi-

mately 45 miles from the center of Middle-

bury, Vermont.

Vermont Wood Pellet already has bulk distri-

bution representation in Addison County via

Bordeau Brothers and a retail relationship with

the Addison County Relocalization Network

(ACORN) for bagged product distribution -

http://www.acornenergycoop.com/products-

services.html.

Figure 65.

35 With the exception of Vermont Wood Pellet which has only a 60 minute drive time depicted in the map above.

79


Curran Renewable Energy LLC

www.curranpellets.com

Pat Curran, owner of Seaway Timber Harvest-

ing, has built and is nearing completion of a

new pellet mill located in Malone, New York.

This mill would produce 100,000 tons of

fi nished pellets annually and consume approxi-

mately 200,000 tons annually. It is expected

that Curran Energy will be operating at near

capacity in late 2009. Curran Energy uses pa-

per grade woodchips from its own substantial

in woods chipping operations that use fl ail-de-

barker chippers. This mill is approximately 130

miles from the center of Middlebury, Vermont.

New England Wood Pellet

www.pelletheat.com

New England Wood Pellet (NEWP) owns and

operates two existing pellet mills and has a third

under development. NEWP’s fl ag ship facility is

located in Jaffrey, New Hampshire, which is 130

miles from the center of Middlebury, Vermont.

Its recently completed second mill, located in

Schuyler, New York, is 170 miles away from

Middlebury. NEWP recently announced its

acquisition of Norbord’s Medium Density Fi-

berboard facility in Deposit, New York that will

be converted into a third pellet mill. It will be

located more than 200 miles away from Mid-

dlebury. In addition to the three pellet mills,

NEWP operates a pellet distribution center in

Palmer, Massachusetts where railcars of loose

pellets from British Columbia are off-loaded

and repackaged for the New England market.

Energex

www.energex.com

Energex operates two pellet mills in the re-

gion—the fi rst in Miffl intown, Pennsylvania

and the second in Lac-Megantic, Quebec. The

Quebec mill is 160 miles from the center of

Middlebury, Vermont and the Pennsylvania

mill is too far away to effectively compete with

a mill in Addison County.

Maine Woods Pellet Company

www.mainewoodspelletco.com

This recently completed pellet mill is located

in Athens, Maine. This pellet mill can produce

up to 100,000 tons of pellets annually and

distribute both bulk and bags.

Corinth Wood Pellets

www.corinthwoodpellets.com

Corinth Wood Pellets is another new pellet mill

in Central Maine that has just come on-line in

the last year. They produce hardwood pellets

and distribute bulk and bagged product.

The following are descriptions of known pro-

posals for new pellet mills in Vermont. While

these projects are currently under development

and are moving forward, there is no guarantee

they will be built.

Vermont Renewable Energy Company

LLC (Pellet Mill), Island Pond, Vermont

As of February 2009, a Newport, Vermont-

based couple has been planning to turn the

closed Ethan Allen furniture factory in Island

Pond into a wood pellet manufacturing plant.

Vermont Renewable Energy Company LLC

will produce 50,000 tons of wood pellets a

year with capacity to produce 100,000 tons

annually. If built, this mill would be 160 miles

from the center of Middlebury, Vermont.

International Wood Fuels

www.iwoodfuels.com

International Wood Fuels has recently begun

construction of a pellet mill located in Maine

but this company has been looking to establish

a pellet mill somewhere in Vermont. IWF had

been considering the possibility of locating

at the Old Burke Lumber site located in the

town of Sutton but is reportedly evaluating

other options at this time.

80


9.7 IMPORTANT RESOURCES

Should an entrepreneur pursue establishing a

pellet mill in Addison County, the following

section highlights some important resources

available to assist in the planning and permit-

ting processes.

9.7.1 Economic Development. The follow-

ing are sources for assistance for businesses

looking to locate in Addison County or in

Vermont:

Addison County Economic Development

Corporation (ACEDC)

www.addisoncountyedc.org

ACEDC operates three Revolving Loan

Funds. Eligible businesses can borrow between

$5,000 and $100,000 for early stage develop-

ment projects as well as equipment purchases,

leasehold improvements, working capital,

and other activities. More information can be

found at their website.

State of Vermont Economic

Development Offi ce

www.thinkvermont.com

The Department of Economic Development,

is part of the Agency of Commerce and Com-

munity Development and works to create and

retain quality jobs and strengthen the competi-

tiveness of Vermont’s businesses and the over-

all economy. The Department of Economic

Development’s principal focus is to support

Vermont’s businesses. Much of this support is

delivered through specialized programs that

provide solutions to business challenges.

9.7.2 Permitting. There are a wide range of

possible permits that would be necessary for

a pellet mill. Further information on local

permits can be obtained by contacting the host

town directly. A brief review of state land use

and air quality permitting is presented below:

Vermont Act 250

Under Act 250, known as the Land Use and

Development Act, the State of Vermont cre-

ated nine District Environmental Commissions

to review large-scale development projects

using 10 criteria that are designed to safe-

guard the environment, community life, and

aesthetic character of the state. They have the

power to issue or deny a permit to real estate

developers for any project that encompasses

more than 10 acres (40,000 m²), or more than

1 acre (4,000 m²) for towns that do not have

permanent zoning and subdivision bylaws. For

further information contact the District 9 Act

250 offi ce at:

Geoff Green

111 West Street

Essex Junction, Vermont 05452

Phone: 802-879-5657

Air Pollution Control

www.anr.state.vt.us/air/Permitting

Any pellet mill using a boiler larger than 90

horse power will need to submit an applica-

tion for an air permit. The attached link is to

the APCD’s web page with information for

permits.

Generally the amount of criteria pollutants

that may be emitted by a proposed source will

be determined by the proposal. The Agency

then determines which regulatory require-

ments that the project will trigger.

The contact for the Air Pollution Control Di-

vision of the Vermont Department of Environ-

mental Conservation is given below:

Steven Snook, Environmental Engineer

Air Pollution Control Division - Engineering

Services

[email protected]

Phone: 802-241-3856

Fax: 802-241-2590

81


Pellet heating is a growth industry where

demand for heating appliances and fuel has

been growing steadily for the decade. There is

a business opportunity to make pellet heat-

ing fuel in Vermont from Vermont resources

in effort to lower the current dependence on

imported heating fuels (oil, propane, and even

pellets).

There is virtually no supply of wood or

agricultural residues available for pellet fuel

making. Any fi ber would be sourced from har-

vested low grade wood or possibly from dedi-

cated energy crops such as grass. While there

is tremendous agricultural capacity to grow

grasses in Addison county, their viability as

pellet feedstock is limited. Wood fi ber would

be the primary fi ber input for a pellet making

business. When limiting factors such as access

and ownership are considered and current de-

mand for fi rewood are accounted for, there is

barely enough wood fi ber available in Addison

County to support a 3 TPH pellet mill. There

is ample supply of wood fi ber to build a 6 ton

per hour if the adjoining counties are included

in the fi ber basket.

There are several excellent possible pellet mill

locations in Addison County each one with its

own pros and cons.

There is currently insuffi cient market within

Addison County to support a 3 TPH facility.

With higher fossil heating fuel costs, more

market growth, and distribution to neighbor-

ing counties, Addison County could support a

6 TPH facility.

The economics of pellet fuel production

clearly favor larger facilities, but there are ways

in which a smaller pellet mill can be fi nancially

viable—namely reduction of the capital costs.

Figure 66 below summarizes the study

fi ndings.

10.0 Study Conclusions

Summary of Findings

Addison County Only Addison County + Rutland and Chittenden

3TPH 6TPH 12TPH 3TPH 6TPH 12TPH

Wood and Ag Fiber √ X X √ √ X

Site Locations √ √ √ √ √ √

Current Market X X X √ X X

Financial Feasibility ? ? √ ? ? √

Figure 66.

82



11.0 Appendices

Maps

A. Total Starting and Remaining Accessible Forestland

B. Total Starting and Remaining Functional Agricultural Land

C. Industrially and Commercially Zoned Areas in Addison County

D. Middlebury Industrial Park

E. Vermont Natural Agricultural Products – OMYA Quarry

F. Claire Lathrop Sawmill

G. A Johnson Company

H. White Pigment Mill – Phoenix Feed Mill

Online Market Surveys

I. Residential

J. Commercial

Ten-Year Pro Forma Financials

K. 3 TPH Mill

L. 6 TPH Mill

M. 12 TPH Mill

N. First-Year Cash Flow

Additional Resources

O. Pellet Mill Equipment Manufacturers

P. Pellet Dealers in Addison County

Addison County Pellet Addison County Pellet Feasibility StudyFeasibility Study


RIPTON

ORWELL

BRISTOL

LINCOLNADDISON

GRANVILLEBRIDPORT

FERRISBURG

SHOREHAMHANCOCK

NEW HAVEN

MONKTON

SALISBURY

LEICESTER

PANTON

STARKSBORO

MIDDLEBURY

GOSHEN

CORNWALL

WHITING

WEYBRIDGE

WALTHAM

VERGENNES

PHYSICALLY INACCESSIBLE AREAS AND REMAINING ACCESSIBLE FORESTLAND

Map LegendTown BoundariesAddison CountyInaccessible Areas

Accessible Forest Areasby Forest Type

DeciduousEvergreenMixed

This map was created by the Biomass Energy Resource Center using the National Land Cover Dataset modfied for this project by Vermont Center for Geographic Information. Copyright 2009. All rights reserved.

RIPTON

ORWELL

BRISTOLLINCOLN

ADDISON

GRANVILLEBRIDPORT

FERRISBURG

SHOREHAMHANCOCK

NEW HAVEN

MONKTON

MIDDLEBURY

SALISBURY

LEICESTER

PANTON

STARKSBORO

GOSHEN

CORNWALL

WHITING

WEYBRIDGE

WALTHAM

VERGENNES

TOTAL STARTING AND REMAINING FUNCTIONALAGRICULTURAL LAND

Map LegendTown BoundariesAddison CountyInaccessible Areas

Agricultural LandCROP COVER

CornFallowHayPasture / IdleOther Crops

This map was created by the Biomass Energy Resource Center using the National Land Cover Dataset modfied for this project by Vermont Center for Geographic Information. Copyright 2009. All rights reserved.

RIPTON

ORWELL

BRISTOL

LINCOLN

GRANVILLE

ADDISON

BRIDPORT

FERRISBURG

SHOREHAM

HANCOCK

NEW HAVEN

STARKSBOROMONKTON

MIDDLEBURY

SALISBURY

LEICESTER

PANTON

WEYBRIDGE

GOSHEN

CORNWALL

WHITING

WALTHAM

VERGENNES

MAP LEGENDTown BoundariesIndustrial / Commercial DistrictsCommercial Districts3-Phase Power LinesRoadsRailroadsWater

INDUSTRIAL AND COMMERCIAL AREASADDISON COUNTY, VERMONT

This map was created by the Biomass Energy Resource Center using data from Addison County Regional Planning Commission and Vermont Center for Geographic Information. Copyright 2009. All rights reserved.

Middlebury Industrial Park5 Acres

MIDDLEBURY

WEYBRIDGE

MAP LEGENDIndustrial / Commercial DistrictsCommercial Districts3-Phase Power LinesRoadsParcelsTown BoundariesRailroadsWater

POTENTIAL SITES FOR A BIO-FIBER FUEL PRODUCTION FACILITY - MIDDLEBURY, VERMONT

This map was created by the Biomass Energy Resource Center using data provided by Addison County Regional Planning Commission and Vermont Center for Geographic Information. Copyright 2009. All rights reserved.

Moo Doo(Vermont Natural

Agricultural Products)506 Acres

MIDDLEBURY MAP LEGENDPARCELSIndustrial / Commercial DistrictsCommercial Districts3-Phase Power LinesRoadsTown BoundariesRailroadsWater

POTENTIAL SITES FOR A BIO-FIBER FUEL PRODUCTION FACILITY - MIDDLEBURY, VERMONT


Photo of Vermont Natural Agricultural Products Site

Claire (Jim) Lathrop Site,Former Sawmill

12.37 acres

BRISTOL

MAP LEGENDIndustrial / Commercial DistrictsCommercial DistrictsparcelsTown Boundaries3-Phase Power LinesRoadsRailroadsWater

POTENTIAL SITES FOR A BIO-FIBER FUEL PRODUCTION FACILITY - BRISTOL, VERMONT


Photo of Claire (Jim) Lathrop Site, former sawmill

A. Johnson Sawmill58.57 acres

BRISTOL MAP LEGENDIndustrial / Commercial DistrictsCommercial DistrictsparcelsTown Boundaries3-Phase Power LinesRoadsRailroadsWater

POTENTIAL SITES FOR A BIO-FIBER FUEL PRODUCTION FACILITY - BRISTOL, VERMONT


Photo of the A. Johnson Sawmill Site

Old Grain Mill (Pheonix Feed)

NEW HAVEN

MAP LEGENDParcelsTown Boundaries3-Phase Power LinesRoadsRailroadsIndustrial / Commercial DistrictsCommercial DistrictsWater

POTENTIAL SITES FOR A BIO-FIBER FUEL PRODUCTION FACILITY - NEW HAVEN, VERMONT


Photo of Old Grain Mill (Pheonix Feed) Site

Addison County Bio-Fiber Pellet Market SurveyAddison County Bio-Fiber Pellet Market SurveyAddison County Bio-Fiber Pellet Market SurveyAddison County Bio-Fiber Pellet Market Survey

The following survey is a part of a study being conducted by the Biomass Energy Resource Center for the Addison County Regional Planning Commission exploring the feasibility of a community-scale pellet fuel manufacturing business serving Addison County. If you are not a resident of Addison County please do not fill out or submit a survey. Please only one survey entry per household.

Confidentiality Statement

The confidentiality of each survey respondent is of the utmost importance. All information submitted in the survey response will be kept confidential and will not be presented in a manner that reveals the respondent’s identity.

To be entered into the raffle to win a free ton of pellets or a free cord or firewood, please fill out your contact information at the end of this survey.

1. Are you a full- or part-time resident of Addison County?

2. What is the square footage of your home in Addison County?

3. What type of fuel did you heat your home with last winter? Check all that apply.

1. Residential Market

I am not a resident of Addison County

nmlkj

Part-time resident

nmlkj

Full-time resident

nmlkj

Which town?

Oil

gfedc

Propane

gfedc

Firewood

gfedc

Pellets

gfedc

Electric

gfedc

Solar

gfedc

Other (please specify)

gfedc

Addison County Bio-Fiber Pellet Market SurveyAddison County Bio-Fiber Pellet Market SurveyAddison County Bio-Fiber Pellet Market SurveyAddison County Bio-Fiber Pellet Market Survey4. How much of each fuel did you use for heating last year?

5. What price did you pay last winter for your heating fuel(s)?

6. If you heated with pellets last winter, where did you buy the pellets? Check all that apply.

Oil (in gallons)

Propane (in gallons)

Firewood (in cords)

Pellets (in tons)

Electric (kWh)

Other (give units)

Oil (per gallon)

Propane (gallon)

Firewood (cord)

Pellets (ton)

Electric (kWh)

Other (give unit)

I did not heat with pellets

nmlkj

Local hardware store

nmlkj

Pellet stove dealer

nmlkj

Local co-operative

nmlkj


nmlkj

Addison County Bio-Fiber Pellet Market SurveyAddison County Bio-Fiber Pellet Market SurveyAddison County Bio-Fiber Pellet Market SurveyAddison County Bio-Fiber Pellet Market Survey7. If you heated with pellets last winter, where did the pellets come from? Check all that apply.

8. If you heat with pellets, how satisfied are you with your current supply of pellets?

9. If you do not currently heat with pellets, have you considered it?

10. If you decided against heating with pellets, please give your reason in the space provided.

Very Satisfied Satisfied Indifferent Not SatisfiedI do not heat with

pellets

Overall, I am nmlkj nmlkj nmlkj nmlkj nmlkj


gfedc

New England

gfedc

New York

gfedc

Pennsylvania

gfedc

Western US

gfedc

Quebec

gfedc

Canada (other than Quebec)

gfedc

I do not know where they came from

gfedc

I am not concerned with where they came from

gfedc


gfedc

Please share any comments on your satisfaction level.

No

nmlkj

Yes

nmlkj

Addison County Bio-Fiber Pellet Market SurveyAddison County Bio-Fiber Pellet Market SurveyAddison County Bio-Fiber Pellet Market SurveyAddison County Bio-Fiber Pellet Market Survey11. If you do not currently heat with pellets, but you have considered it, what type of appliance would you install?

12. If you do not currently heat with pellets, at what oil price would you consider converting to heating with pellets?

13. If you do not currently heat with pellets, how likely would you be to switch to heating with pellets if the payback was:

14. If a pellet mill opened in Addison County would you be interested in buying pellets locally?

Not worth itI would think about

it

I would definitely

install a systemI'm not sure N/A

$3.50 per gallon nmlkj nmlkj nmlkj nmlkj nmlkj



$5.00 and up nmlkj nmlkj nmlkj nmlkj nmlkj

Not likely Somewhat likely Very likely I'm not sure N/A

Less than 3 years nmlkj nmlkj nmlkj nmlkj nmlkj



I have not considered it

nmlkj

Pellet stove

nmlkj

Pellet boiler

nmlkj

Pellet furnace

nmlkj

I am not sure

nmlkj


nmlkj

No

nmlkj

Yes

nmlkj

Maybe

nmlkj

Addison County Bio-Fiber Pellet Market SurveyAddison County Bio-Fiber Pellet Market SurveyAddison County Bio-Fiber Pellet Market SurveyAddison County Bio-Fiber Pellet Market Survey15. If you were interested in buying pellets locally, where would you prefer to buy them? Check all that apply.

16. If you are interested in buying pellets locally, how would you prefer to purchase them? Check all that apply.

17. How important is it to you that your pellets are:

18. What is your annual household income?

19. What is your level of education?

Not importantSomewhat

importantVery important I'm not sure N/A

Produced locally nmlkj nmlkj nmlkj nmlkj nmlkj

Harvested locally nmlkj nmlkj nmlkj nmlkj nmlkj

Harvested sustainably nmlkj nmlkj nmlkj nmlkj nmlkj

Through a distributor (such as a hardware store), delivered

gfedc

Through the distributor (you pick up and possibly save money)

gfedc

Direct from the manufacturer (by the ton, you pick up and possibly save money)

gfedc

I am not interested in buying pellets locally

gfedc

40-lb bag

gfedc

By the ton in 40-lb bags (1 ton on a pallet)

gfedc

In bulk bags (large sacks on a pallet)

gfedc

In bulk (loose), delivered to a holding bin

gfedc

I would not buy pellets locally

gfedc

$0-14,999

nmlkj

$15,000-29,999

nmlkj

$30,000-49,999

nmlkj

$50,000-69,999

nmlkj

$70,000 or more

nmlkj

High school

nmlkj

Some college

nmlkj

Undergraduate degree

nmlkj

Advanced degree

nmlkj

Addison County Bio-Fiber Pellet Market SurveyAddison County Bio-Fiber Pellet Market SurveyAddison County Bio-Fiber Pellet Market SurveyAddison County Bio-Fiber Pellet Market Survey20. What is your age?

21. How did you find out about this survey?

22. Other thoughts or comments?

23. In order to be entered into the raffle to win a free ton of pellets or a free cord of firewood, please enter your contact information below. Name

Street Address

Town

Email

Phone Number

20-29 years

nmlkj

30-39

nmlkj

40-49

nmlkj

50-59

nmlkj

60-69

nmlkj

70-79

nmlkj

80 and over

nmlkj

Announcment in the newspaper

nmlkj

Email from Addison County Regional Planning Commission

nmlkj

Email from Addison County Chamber of Commerce

nmlkj

Email from Addison County Economic Development Corporation

nmlkj


nmlkj

Addison County Bio-Fiber Pellet Market SurveyAddison County Bio-Fiber Pellet Market SurveyAddison County Bio-Fiber Pellet Market SurveyAddison County Bio-Fiber Pellet Market Survey

The following survey is a part of a study being conducted by the Biomass Energy Resource Center for the Addison County Regional Planning Commission exploring the feasibility of a community-scale pellet fuel manufacturing business serving Addison County. If your business or facility is not in Addison County please do not fill out or submit a survey. Please only one survey entry per entity.

Confidentiality Statement

The confidentiality of each survey respondent is of the utmost importance. All information submitted in the survey response will be kept confidential and will not be presented in a manner that reveals the respondent’s identity.

To be entered into the raffle to win a free ton of pellets or a free cord or firewood, please fill out your contact information at the end of this survey.

1. Is your business located in Addison County?

2. What is the nature of your business?

3. How many square feet of your facility are heated?

1. Commercial Market

No

nmlkj

Yes

nmlkj

If yes, which town?

Retail

nmlkj

Light Manufacturing

nmlkj

Agricultural / Silvicultural

nmlkj

Service

nmlkj


nmlkj

Addison County Bio-Fiber Pellet Market SurveyAddison County Bio-Fiber Pellet Market SurveyAddison County Bio-Fiber Pellet Market SurveyAddison County Bio-Fiber Pellet Market Survey4. Which type of fuel did you heat your facility with last winter? Check all that apply.

5. How much of each fuel did you use for heating last year?

6. What price did you pay last winter for your heating fuel(s)?

7. If you heated with pellets last winter, where did you buy the pellets?

Oil (in gallons)

Propane (in gallons)

Firewood (in cords)

Pellets (in tons)

Electric (kWh)

Other (give units)

Oil (per gallon)

Propane (gallon)

Firewood (cord)

Pellets (ton)

Electric (kWh)

Other (give unit)

Oil

gfedc

Propane

gfedc

Firewood

gfedc

Pellets

gfedc

Electric

gfedc

Solar

gfedc


gfedc


nmlkj

Local hardware store

nmlkj

Pellet stove dealer

nmlkj

Local co-operative

nmlkj


nmlkj

Addison County Bio-Fiber Pellet Market SurveyAddison County Bio-Fiber Pellet Market SurveyAddison County Bio-Fiber Pellet Market SurveyAddison County Bio-Fiber Pellet Market Survey8. If you heated with pellets last winter, where did the pellets come from?

9. If you heat with pellets, how satisfied are you with your current supply of pellets?

10. If you do not currently heat with pellets, have you considered it?

11. If you have decided against heating with pellets, please give your reason in the space provided.

Very Satisfied Satisfied Indifferent Not SatisfiedI do not heat with

pellets

Overall, I am nmlkj nmlkj nmlkj nmlkj nmlkj


gfedc

New England

gfedc

New York

gfedc

Pennsylvania

gfedc

Western US

gfedc

Quebec

gfedc

Canada (other than Quebec)

gfedc

I do not know where they came from

gfedc

I am not concerned with where they came from

gfedc


gfedc

Please share any comments on your satisfaction level.

No

nmlkj

Yes

nmlkj

Addison County Bio-Fiber Pellet Market SurveyAddison County Bio-Fiber Pellet Market SurveyAddison County Bio-Fiber Pellet Market SurveyAddison County Bio-Fiber Pellet Market Survey12. If you do not currently heat with pellets, but you have considered it, what type of appliance would you install?

13. If you do not currently heat with pellets, at what oil price would you consider converting to heating with pellets?

14. If you do not currently heat with pellets, how likely would you be to switch to heating with pellets if the payback was:

15. If a pellet mill opened in Addison County would you be interested in buying pellets locally?

Not worth itI would think about

it

I would definitely

install a systemI'm not sure N/A




$5.00 and up nmlkj nmlkj nmlkj nmlkj nmlkj

Not likely Somewhat likely Very likely I am not sure N/A




I have not considered it

nmlkj

Pellet stove

nmlkj

Pellet boiler

nmlkj

Pellet furnace

nmlkj

I am not sure

nmlkj


nmlkj

No

nmlkj

Yes

nmlkj

Maybe

nmlkj

Addison County Bio-Fiber Pellet Market SurveyAddison County Bio-Fiber Pellet Market SurveyAddison County Bio-Fiber Pellet Market SurveyAddison County Bio-Fiber Pellet Market Survey16. If you are interested in buying pellets locally, where would you prefer to buy them? Check all that apply.

17. If you are interested in buying pellets locally, how would you prefer to purchase them? Check all that apply.

18. How important is it to you that your pellets are:

19. Other thoughts or comments?

20. In order to be entered into the raffle to win a free ton of pellets or a free cord of firewood, please enter your contact information below.

Not importantSomewhat

importantVery important I'm not sure N/A

Produced locally nmlkj nmlkj nmlkj nmlkj nmlkj

Harvested locally nmlkj nmlkj nmlkj nmlkj nmlkj

Harvested sustainably nmlkj nmlkj nmlkj nmlkj nmlkj

Name

Address

Town

Email

Phone Number

Through a distributor (such as a hardware store), delivered

gfedc

Through a distributor (you pick up and possibly save money)

gfedc

Direct from the manufacturer (by the ton, you pick up and possibly save money)

gfedc

I'm not interested in buying pellets locally

gfedc

40-lb bag

gfedc

By the ton in 40-lb bags (1 ton per pallet)

gfedc

In bulk bags (large sacks on a pallet)

gfedc

In bulk (loose), delivered to a holding bin

gfedc

I would not buy pellets locally

gfedc

APPENDIX K

3 TPH Option 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Revenue

Bulk 720,000.00$ 745,200.00$ 771,282.00$ 798,276.87$ 826,216.56$ 855,134.14$ 885,063.83$ 916,041.07$ 948,102.51$ 981,286.09$ Bags 2,538,000.00$ 2,626,830.00$ 2,718,769.05$ 2,813,925.97$ 2,912,413.38$ 3,014,347.84$ 3,119,850.02$ 3,229,044.77$ 3,342,061.34$ 3,459,033.48$ TOTAL REVENUE 3,258,000.00$ 3,372,030.00$ 3,490,051.05$ 3,612,202.84$ 3,738,629.94$ 3,869,481.98$ 4,004,913.85$ 4,145,085.84$ 4,290,163.84$ 4,440,319.58$

ExpensesWood Purchased 1,008,000.00$ 1,043,280.00$ 1,079,794.80$ 1,117,587.62$ 1,156,703.18$ 1,197,187.80$ 1,239,089.37$ 1,282,457.50$ 1,327,343.51$ 1,373,800.53$ Labor 604,800.00$ 625,968.00$ 647,876.88$ 670,552.57$ 694,021.91$ 718,312.68$ 743,453.62$ 769,474.50$ 796,406.11$ 824,280.32$ Benefits, fringe, etc. 151,200.00$ 156,492.00$ 161,969.22$ 167,638.14$ 173,505.48$ 179,578.17$ 185,863.41$ 192,368.62$ 199,101.53$ 206,070.08$ Insurance 25,000.00$ 25,875.00$ 26,780.63$ 27,717.95$ 28,688.08$ 29,692.16$ 30,731.38$ 31,806.98$ 32,920.23$ 34,072.43$ Electric 396,000.00$ 409,860.00$ 424,205.10$ 439,052.28$ 454,419.11$ 470,323.78$ 486,785.11$ 503,822.59$ 521,456.38$ 539,707.35$ Equip. Maint.& Repair 100,000.00$ 103,500.00$ 107,122.50$ 110,871.79$ 114,752.30$ 118,768.63$ 122,925.53$ 127,227.93$ 131,680.90$ 136,289.74$ Printed Bags & Packaging Supplies 216,000.00$ 223,560.00$ 231,384.60$ 239,483.06$ 247,864.97$ 256,540.24$ 265,519.15$ 274,812.32$ 284,430.75$ 294,385.83$ Product Distribution 216,000.00$ 223,560.00$ 231,384.60$ 239,483.06$ 247,864.97$ 256,540.24$ 265,519.15$ 274,812.32$ 284,430.75$ 294,385.83$ Advertising 15,000.00$ 15,525.00$ 16,068.38$ 16,630.77$ 17,212.85$ 17,815.29$ 18,438.83$ 19,084.19$ 19,752.14$ 20,443.46$ Interest on Debt 230,079.96$ 212,497.98$ 193,645.01$ 173,429.15$ 151,751.88$ 128,507.56$ 103,582.91$ 76,856.46$ 48,197.94$ 17,467.70$ Depreciation 259,261.90$ 259,261.90$ 259,261.90$ 259,261.90$ 259,261.90$ 259,261.90$ 259,261.90$ 259,261.90$ 259,261.90$ 259,261.90$ Misc. 50,000.00$ 51,750.00$ 53,561.25$ 55,435.89$ 57,376.15$ 59,384.32$ 61,462.77$ 63,613.96$ 65,840.45$ 68,144.87$

TOTAL EXPENSE 3,271,341.86$ 3,351,129.89$ 3,433,054.86$ 3,517,144.18$ 3,603,422.77$ 3,691,912.77$ 3,782,633.14$ 3,875,599.27$ 3,970,822.59$ 4,068,310.05$

PROFIT/(Loss) Before Taxes (13,341.86)$ 20,900.11$ 56,996.19$ 95,058.66$ 135,207.16$ 177,569.21$ 222,280.72$ 269,486.57$ 319,341.25$ 372,009.53$

Taxes (Federal & Vermont) (6,812.38)$ 8,407.55$ 23,748.38$ 39,924.93$ 56,988.04$ 74,991.92$ 93,994.31$ 114,056.79$ 135,245.03$ 157,629.05$

Profit/(Loss) After Taxes (6,529.48)$ 12,492.57$ 33,247.81$ 55,133.73$ 78,219.12$ 102,577.30$ 128,286.41$ 155,429.78$ 184,096.22$ 214,380.48$ Cummulative (6,529.48)$ 5,963.09$ 39,210.90$ 94,344.63$ 172,563.74$ 275,141.04$ 403,427.46$ 558,857.23$ 742,953.45$ 957,333.93$

Net Cash Flow 252,732.43$ 271,754.47$ 292,509.71$ 314,395.63$ 337,481.02$ 361,839.20$ 387,548.32$ 414,691.68$ 443,358.13$ 473,642.39$

APPENDIX L


Bulk 1,440,000.00$ 1,490,400.00$ 1,542,564.00$ 1,596,553.74$ 1,652,433.12$ 1,710,268.28$ 1,770,127.67$ 1,832,082.14$ 1,896,205.01$ 1,962,572.19$ Bags 5,076,000.00$ 5,253,660.00$ 5,437,538.10$ 5,627,851.93$ 5,824,826.75$ 6,028,695.69$ 6,239,700.04$ 6,458,089.54$ 6,684,122.67$ 6,918,066.97$ TOTAL REVENUE 6,516,000.00$ 6,744,060.00$ 6,980,102.10$ 7,224,405.67$ 7,477,259.87$ 7,738,963.97$ 8,009,827.71$ 8,290,171.68$ 8,580,327.68$ 8,880,639.15$

ExpensesWood Purchased 1,958,400.00$ 2,026,944.00$ 2,097,887.04$ 2,171,313.09$ 2,247,309.04$ 2,325,964.86$ 2,407,373.63$ 2,491,631.71$ 2,578,838.82$ 2,669,098.18$ Labor 1,036,800.00$ 1,073,088.00$ 1,110,646.08$ 1,149,518.69$ 1,189,751.85$ 1,231,393.16$ 1,274,491.92$ 1,319,099.14$ 1,365,267.61$ 1,413,051.98$ Benefits, fringe, etc. 259,200.00$ 268,272.00$ 277,661.52$ 287,379.67$ 297,437.96$ 307,848.29$ 318,622.98$ 329,774.78$ 341,316.90$ 353,262.99$ Insurance 50,000.00$ 51,750.00$ 53,561.25$ 55,435.89$ 57,376.15$ 59,384.32$ 61,462.77$ 63,613.96$ 65,840.45$ 68,144.87$ Electric 792,000.00$ 819,720.00$ 848,410.20$ 878,104.56$ 908,838.22$ 940,647.55$ 973,570.22$ 1,007,645.18$ 1,042,912.76$ 1,079,414.70$ Equip. Maint.& Repair 200,000.00$ 207,000.00$ 214,245.00$ 221,743.58$ 229,504.60$ 237,537.26$ 245,851.07$ 254,455.85$ 263,361.81$ 272,579.47$ Printed Bags & Packaging Supplies 378,000.00$ 391,230.00$ 404,923.05$ 419,095.36$ 433,763.69$ 448,945.42$ 464,658.51$ 480,921.56$ 497,753.82$ 515,175.20$ Product Distribution 432,000.00$ 447,120.00$ 462,769.20$ 478,966.12$ 495,729.94$ 513,080.48$ 531,038.30$ 549,624.64$ 568,861.50$ 588,771.66$ Advertising 28,000.00$ 28,980.00$ 29,994.30$ 31,044.10$ 32,130.64$ 33,255.22$ 34,419.15$ 35,623.82$ 36,870.65$ 38,161.13$ Interest on Debt 338,298.49$ 312,446.80$ 284,726.29$ 255,001.87$ 223,128.66$ 188,951.33$ 152,303.33$ 113,006.03$ 70,867.94$ 25,683.67$ Depreciation 375,357.14$ 375,357.14$ 375,357.14$ 375,357.14$ 375,357.14$ 375,357.14$ 375,357.14$ 375,357.14$ 375,357.14$ 375,357.14$ Misc. 75,000.00$ 77,625.00$ 80,341.88$ 83,153.84$ 86,064.23$ 89,076.47$ 92,194.15$ 95,420.94$ 98,760.68$ 102,217.30$

TOTAL EXPENSE 5,923,055.63$ 6,079,532.95$ 6,240,522.95$ 6,406,113.91$ 6,576,392.12$ 6,751,441.52$ 6,931,343.17$ 7,116,174.77$ 7,306,010.08$ 7,500,918.29$

PROFIT/(Loss) Before Taxes 592,944.37$ 664,527.05$ 739,579.15$ 818,291.77$ 900,867.75$ 987,522.45$ 1,078,484.54$ 1,173,996.91$ 1,274,317.61$ 1,379,720.87$

Taxes (Federal & Vermont) 251,526.36$ 281,949.00$ 313,846.14$ 347,299.00$ 382,393.79$ 419,222.04$ 457,880.93$ 498,473.69$ 541,109.98$ 585,906.37$

Profit/(Loss) After Taxes 341,418.01$ 382,578.06$ 425,733.01$ 470,992.76$ 518,473.96$ 568,300.41$ 620,603.61$ 675,523.22$ 733,207.63$ 793,814.50$ Cummulative 341,418.01$ 723,996.07$ 1,149,729.08$ 1,620,721.84$ 2,139,195.80$ 2,707,496.21$ 3,328,099.82$ 4,003,623.04$ 4,736,830.66$ 5,530,645.16$

Net Cash Flow 716,775.15$ 757,935.20$ 801,090.15$ 846,349.91$ 893,831.10$ 943,657.55$ 995,960.75$ 1,050,880.36$ 1,108,564.77$ 1,169,171.64$

APPENDIX M


Bulk 2,880,000.00$ 2,980,800.00$ 3,085,128.00$ 3,193,107.48$ 3,304,866.24$ 3,420,536.56$ 3,540,255.34$ 3,664,164.28$ 3,792,410.03$ 3,925,144.38$ Bags 10,152,000.00$ 10,507,320.00$ 10,875,076.20$ 11,255,703.87$ 11,649,653.50$ 12,057,391.37$ 12,479,400.07$ 12,916,179.08$ 13,368,245.34$ 13,836,133.93$ TOTAL REVENUE 13,032,000.00$ 13,488,120.00$ 13,960,204.20$ 14,448,811.35$ 14,954,519.74$ 15,477,927.94$ 16,019,655.41$ 16,580,343.35$ 17,160,655.37$ 17,761,278.31$

‐$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ Expenses ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$

Wood Purchased 3,686,400.00$ 3,815,424.00$ 3,948,963.84$ 4,087,177.57$ 4,230,228.79$ 4,378,286.80$ 4,531,526.84$ 4,690,130.27$ 4,854,284.83$ 5,024,184.80$ Labor 1,555,200.00$ 1,609,632.00$ 1,665,969.12$ 1,724,278.04$ 1,784,627.77$ 1,847,089.74$ 1,911,737.88$ 1,978,648.71$ 2,047,901.41$ 2,119,577.96$ Benefits, fringe, etc. 388,800.00$ 402,408.00$ 416,492.28$ 431,069.51$ 446,156.94$ 461,772.44$ 477,934.47$ 494,662.18$ 511,975.35$ 529,894.49$ Insurance 95,000.00$ 98,325.00$ 101,766.38$ 105,328.20$ 109,014.69$ 112,830.20$ 116,779.26$ 120,866.53$ 125,096.86$ 129,475.25$ Electric 1,440,000.00$ 1,490,400.00$ 1,542,564.00$ 1,596,553.74$ 1,652,433.12$ 1,710,268.28$ 1,770,127.67$ 1,832,082.14$ 1,896,205.01$ 1,962,572.19$ Equip. Maint.& Repair 250,000.00$ 258,750.00$ 267,806.25$ 277,179.47$ 286,880.75$ 296,921.58$ 307,313.83$ 318,069.82$ 329,202.26$ 340,724.34$ Printed Bags & Packaging Supplies 691,200.00$ 715,392.00$ 740,430.72$ 766,345.80$ 793,167.90$ 820,928.77$ 849,661.28$ 879,399.43$ 910,178.41$ 942,034.65$ Product Distribution 864,000.00$ 894,240.00$ 925,538.40$ 957,932.24$ 991,459.87$ 1,026,160.97$ 1,062,076.60$ 1,099,249.28$ 1,137,723.01$ 1,177,543.31$ Advertising 40,000.00$ 41,400.00$ 42,849.00$ 44,348.72$ 45,900.92$ 47,507.45$ 49,170.21$ 50,891.17$ 52,672.36$ 54,515.89$ Interest on Debt 492,744.00$ 455,090.08$ 414,714.16$ 371,419.45$ 324,994.97$ 275,214.46$ 221,835.31$ 164,597.38$ 103,221.72$ 37,409.20$ Depreciation 533,238.10$ 533,238.10$ 533,238.10$ 533,238.10$ 533,238.10$ 533,238.10$ 533,238.10$ 533,238.10$ 533,238.10$ 533,238.10$ Misc. 100,000.00$ 103,500.00$ 107,122.50$ 110,871.79$ 114,752.30$ 118,768.63$ 122,925.53$ 127,227.93$ 131,680.90$ 136,289.74$

TOTAL EXPENSE 10,136,582.10$ 10,417,799.18$ 10,707,454.74$ 11,005,742.62$ 11,312,856.12$ 11,628,987.41$ 11,954,326.98$ 12,289,062.93$ 12,633,380.22$ 12,987,459.92$

PROFIT/(Loss) Before Taxes 2,895,417.90$ 3,070,320.82$ 3,252,749.46$ 3,443,068.73$ 3,641,663.63$ 3,848,940.52$ 4,065,328.43$ 4,291,280.42$ 4,527,275.15$ 4,773,818.39$

Taxes (Federal & Vermont) 983,967.09$ 1,043,434.08$ 1,105,459.82$ 1,170,168.37$ 1,237,690.63$ 1,308,164.78$ 1,381,736.67$ 1,458,560.34$ 1,538,798.55$ 1,622,623.25$

Profit/(Loss) After Taxes 1,911,450.81$ 2,026,886.74$ 2,147,289.64$ 2,272,900.36$ 2,403,972.99$ 2,540,775.74$ 2,683,591.76$ 2,832,720.08$ 2,988,476.60$ 3,151,195.14$ Cummulative 1,911,450.81$ 3,938,337.56$ 6,085,627.20$ 8,358,527.56$ 10,762,500.55$ 13,303,276.30$ 15,986,868.06$ 18,819,588.14$ 21,808,064.74$ 24,959,259.88$

Net Cash Flow 2,444,688.91$ 2,560,124.84$ 2,680,527.74$ 2,806,138.45$ 2,937,211.09$ 3,074,013.84$ 3,216,829.86$ 3,365,958.18$ 3,521,714.69$ 3,684,433.23$

APPENDIX N

3TPH 6TPH 12TPHAssets

Current AssetsAcounts Recievables 28,800$ 57,600$ 115,200$ Inventory 313,080$ 589,416$ 1,060,813$ Cash 134,487$ 917,207$ 3,547,551$

Long‐term AssetsLand 250,000$ 350,000$ 525,000$ Building 1,540,000$ 2,100,000$ 2,800,000$ Equipment 1,835,000$ 2,695,000$ 3,830,000$ Less Accumulated Depreciation (259,262)$ (375,357)$ (533,238)$

TOTAL ASSETS 3,842,105$ 6,333,866$ 11,345,326$

LiabilitiesCurrent Liabilities

Accounts payable (includes payroll) 271,275$ 492,109$ 843,685$

Long‐term LiabilitiesDebt Service to Bank 3,153,711$ 4,637,065$ 6,754,052$

Owner Equity 417,119$ 1,204,692$ 3,747,589$

TOTAL LIABILITIES 3,842,105$ 6,333,866$ 11,345,326$

First Year Balance Sheet ‐ Conceptual Pellet Mill Business

APPENDIX O Pellet Mill Equipment Manufacturers

List of Pellet Mill Equipment ManufacturersCompany Equipment Capacity Die Specifications Phone Andritz Sprout Ring die (800) 446‐8629Anyang General International

0.2 to 20 TPH Ring die (86) 372‐596‐5148

Bliss Industries, Inc. Up to 45 TPH n/a (580) 765‐7787California Pellet Mill Ranges Pneumatic gear motor

drive system (800) 428‐0846

Comact Equipment Unknown n/a (418) 228‐8911GEMCO Energy Machinery Co.

0.2 to 3 TPH Ring die (86) 372‐508‐0869

PelHeat n/a Flat die and ring die Pellet Systems International

0.5 to 15 TPH Double die system with satellite rollers

(506) 575‐2231

Sweden Power Chippers AB

0.2 to 0.77 TPH Matrix 46 33‐23 97 90

APPENDIX P List of Pellet Fuel Retailers and Distributors in Addison County

List of Pellet Dealers in Addison County, VermontCompany Name Town Phone NumberAcorn Energy Co‐Op Middlebury (802) 385‐1911Agway Middlebury (802) 388‐4937Aubuchon Hardware Middlebury (802) 388‐1400 Aubuchon Hardware Vergennes (802) 877‐6700 Benoit Trucking Bridport (802) 758‐2555Bordeau Brothers Seymour

Middlebury (802) 388‐7000

Goodrow True Value Lumber


Martin’s Hardware Bristol (802) 453‐3617Martin’s Hardware Middlebury (802) 388‐9500Paris Farmers Union Middlebury (802) 388‐3139 RK Miles Middlebury (802) 388‐2721Teton West Lumber (a distributor to area retailers)



PO Box 1611, Montpelier, VT 05601-1611

ph 802-223-7770 x121 • fax 802-223-7772

[email protected] • www.biomasscenter.org

Documents

AAddison County Pellet ddison County Pellet FFeasibility ... · PDF fileAAddison County Pellet ddison County Pellet FFeasibility Studyeasibility Study Final Report • November 2009