RWE Innogy to build pellets factory in the US

05.02.2010: RWE Innogy, an RWE subsidiary, wants to produce wood pellets in the US from 2011 on. They will be co-fired in Dutch coal-fired power stations.

In the South of the state of Georgia, RWE Innogy wants to set up a factory that will produce 750,000 tons of wood pellets annually. According to the Austrian machinery supplier Andritz, the plant will be the largest pellets factory in North America. RWE Innogy plans to use about 1.5 million tons of fresh wood from Georgia's forests as the source material. The company argues that more wood grows there than people use – especially since paper and cellulose manufacturers have withdrawn from the region.

RWE Innogy is investing about € 120 million in the new pellets factory, which will start production in 2011. The pellets will be shipped to the Netherlands and fired there in existing hard-coal-fired power plants of the energy company Essent. So far, “up to 30 percent” of the hard coal has been replaced by biomass; this fraction will rise to “up to 50 percent”. RWE Innogy also plans to supply the wood pellets to other power stations in Europe, both conventional and those fired purely with biomass.

Austria based company Andritz will supply complete equipment for the plant including woodyard. This includes a debarking line, a chip handling system as well as hammer and pellets mills. The order value is approximately € 40 million.

In the US, however, RWE Innogy does not plan any further activities. “For strategic reasons”, as the parent company RWE says, they will not be investing in power stations of their own in the USA on the basis of renewable energies as long as no CO₂ emissions trading scheme has been implemented there.