Once planned for North Carolina, Active Energy’s wood pellet experiment in Maine hits a snag

Source: Active Energy investor chat webinar

Active Energy, the company behind a controversial wood pellet plant in Lumberton, has produced only a fraction of the amount it promised to deliver from a quickly assembled operation in Maine.

Because of delays in North Carolina, Active Energy in early June began a trial run of of CoalSwitch pellets in Ashland. The company was on a contractual deadline to deliver 900 to 1,000 tons of pellets to PacifiCorp, which plans to burn them at its Hunter Power plant in Utah, according to company correspondence with investors.

So far that’s not gone well. Eric Kennedy, director of licensing and compliance with Maine’s Bureau of Air Quality, said that during the trial period the company has produced only about eight tons of pellets that it had promised to PacifiCorp.

In response to questions from Policy Watch, an Active Energy spokesman said via email that “Active Energy Group will not be making any comments at this time.”

Nonetheless, in a video message to investors in June, Active Energy CEO Michael Rowan said the company had made the “first deliveries” of CoalSwitch pellets to PacificCorp, but did not specify amounts.

In Maine, the CoalSwitch technology had been added to a recently permitted log extruding plant owned by Player Design. The company, which is also Active Energy’s engineering consultant in North Carolina, manufacturers fireplace logs. The facility is smaller than the one under construction in Lumberton, according to a description of the project provided to Maine environmental regulators.

Environmental regulators in Maine had originally scheduled the temporary air permit to expire on July 31. The company has requested an extension of the trial period through Sept. 29, which the Maine Bureau of Air Quality has granted, Kennedy said.

Active Energy CEO Michael Rowan told investors in a letter on May 20 that the company hopes the Maine facility will be a second CoalSwitch plant, and eventually receive approval to produce up to 35,000 tons of pellets per year.

The company has heralded CoalSwitch wood pellets as a game changer for utilities. The patented technology creates a pellet that can burned alongside coal or as a standalone fuel in traditional power plants with no loss of heat. Utilities that use CoalSwitch pellets wouldn’t have to spend millions of dollars to retrofit their facilities. And because the manufacturing process uses steam to explode the pellets to remove some contaminants, they burn cleaner than coal.

However, the pellet production process itself can emit tons carbon monoxide, particulate matter and hazardous air pollutants. Kennedy said Maine regulators don’t yet have emissions data from the trial period, but expect to after it concludes. This data could be instructive for the NC Department of Environmental Quality, which has questioned the accuracy of the company’s most recent emissions estimates.

Source: Active Energy Group investor webinar

DEQ granted Active Energy an air permit last year, over strenuous public objections and concerns about public health and the environment. Shortly afterward, the company began tinkering with the technology, ostensibly to reduce potential emissions. Instead, the changes appear to increase them. DEQ issued a Notice of Violation to Active Energy on May 5  for construction new equipment and changing the process design without state approval.

When Active Energy announced in May that it would manufacture wood pellets in Maine, conservative lawmakers were quoted in the Carolina Journal blaming, without evidence, the NC Department of Environmental Quality for the company’s decision. Active Energy still owns the Lumberton plant, but has not produced pellets there.

Division of Air Quality spokeswoman Zaynab Nasif said in May that the company’s amended application, filed in late April, “appears to indicate an increase in potential emissions due to these control and process modifications. The department has also found inconsistencies in the emissions estimates.”

The most significant upticks are for carbon monoxide, the emissions of which are projected to increase 104%, from 7.9 tons per year to just over 16 tons. Particulate matter — essentially fine dust — would increase dramatically from 0.1 tons per year to 26.7 tons, according to the permit applications. Hazardous air pollutants, classified by the EPA as those that can cause cancer and other serious health problems, also increased: 6,263 pounds a year, up from 4,963 pounds.

The Division of Air Quality asked Active Energy for more information. However, Nasif told Policy Watch today that the department has not received any updates since May 21, including any information regarding testing in Maine.

Active Energy was running a sawmill at the Lumberton facility, but that operation is also in doubt. “We’ve ceased saw log exports from Lumberton because it doesn’t fit our ethos with what we’re trying to achieve,” Rowan said in the investor presentation. “We’ve kept the sawmill under review. We have produced the feedstock for future activities.”

The company had been awarded a $500,000 grant from the Department of Commerce to upfit the old Alamac Knits factory in Lumberton. The grant was contingent on meeting job creation benchmarks of 40 to 50 full-time positions. As of March, the Commerce Department had yet to deliver the funds to Robeson County, the pass-through agency, because the paperwork had not yet been completed.

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