February 5, 2018

High electricity costs drive wood pellet maker out of business

The high cost of electricity to manufacture wood pellets has driven a Boothbay pellet manufacturer out of business.

The Boothbay Register reported that Erik Carlson is a certified forester and logger who runs C&L Forestry in Edgecomb. For the past two years, he also ran a small wood pellet manufacturing plant in Boothbay's industrial park. But he closed up shop after Central Maine Power Co. sent him a disconnection notice.

"I couldn't overcome the oppressive and unsustainable costs of electricity," he told the newspaper, saying he had paid $30,000 in electrical bills for less than a year's worth of full production.

Other larger Maine wood pellet companies struggle with Maine's high electricity costs compared to the national average, as well, the newspaper reported. Maine Wood Pellets in Athens, for example, produces 400 tons of wood pellets per day and had an approximately $300,000 CMP monthly bill. But unlike Carlson's small operation, Maine Wood Pellets had greater financial resources and spent several million dollars to build its own co-generation plant for producing its own electricity.

In 2010, the pellet industry was seen as a rising star, when pellet boilers and stoves became available and forest product companies in Maine began looking at the fuel as a strong new market. Austrian wood pellet manufacturer OkoFEN Pellet Heating established Maine Eco Pellet Heating LLC in Bethel to manufacture wood pellet boilers for commercial and residential buildings, with the boilers to be sold and installed by Maine Energy Systems and ReVision Heat LLC, the latter a company formed by ReVision Energy and Corinth Wood Pellets.

During the winter of 2016-17, though, demand was slack for the wood pellet industry due to continued low oil prices and an average winter.


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