Contact steam to heat Norske Skog pellet business secured

By Gavin Evans

July 19 (BusinessDesk) - Norske Skog’s wood pellets business has secured a steam supply from Contact Energy for its Taupo plant.

The new energy supply for Nature’s Flame will largely come from downstream of the Tenon sawmill, which Contact has supplied with geothermal energy since 2007. It is part of a A$7 million project Norske Skog announced in December to bring the facility up to its full capacity of 85,000 tonnes of pellets a year.

Nature’s Flame operations manager John Goodwin says the additional energy supply enables the company to utilise plant that was installed at the site but not operating when the business was acquired from Solid Energy in 2015. It will also save feedstock – sawdust and shavings – currently being burned in the plant’s driers.

The Taupo plant is producing about 40,000 tonnes a year now – split almost equally between domestic and export sales. The low-moisture and low-ash pellets are a premium product and the new capacity is likely to go into overseas markets like Korea and Japan, Goodwin said.

Norske Skog, which also operates the Tasman paper mill at Kawerau, bought Nature’s Flame as part of a long-term strategic shift away from paper and into other sustainable options for wood fibre use. While it remains a major paper maker, in Europe it has been developing options for making biogas from mill sludge. In Australia it partnered with Circa Group to make the ‘green’ biosolvent Cyrene from wood waste.

Contact Energy operates five power stations on the Wairakei, Tauhara and Ohaaki geothermal fields and is considering a further expansion at Tauhara. It is encouraging greater direct use of the underground steam resource by industrial users as part of a strategy to use new renewable technologies to help them reduce their emissions.

Contact chief generation and development officer James Kilty says the new supply agreement with Nature’s flame will enable it to optimise the efficiency of the production well currently supplying Tenon for the benefit of both customers, he said.

Goodwin says the upgrade is on schedule for completion in the December quarter. At full capacity the pellet plant will use about 460,000 gigajoules of steam annually.

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