AFRICA is a bio-resource powerhouse. However, when it comes to wood pellet and biomass pellet energy, Africa usually flies under the radar.
Africa’s forest resources are depleting rapidly. Net loss of forest areas has accelerated at an average of 3.9 million hectares per year over the past decade. Wood pellets and biomass pellets created from abundant agriculture, crop, and timber residues are seen as a sustainable way to produce bio-energy, strengthen local economies, and fulfil overall energy requirements while protecting forests.
According to Future Market Insights report on Biomass Pellets Market, biomass pellets will generate sales revenue of about $11.3bn in 2022. The demand will be backed by the ongoing expansion of power plants, mining, and manufacturing industries.
Rising demand of clean energy creating opportunities for wood pellet biomass
Wood pellets or biomass pellets are biofuels made from timber waste, wood shavings, and sawdust. They are high energy density fuels that have the capacity to store more than five times the energy for the same volume in comparison with untreated biomass. Wood pellets have approximately the same calorific value as that of charcoal but with a lower carbon footprint.
Wood pellets improve the thermal value of biomass and require a fractional amount of energy for production in comparison with charcoal production. Research has shown that around 80% of the energy content is lost during the transformation of wood to charcoal. Owing to these properties, these pellets are replacing coal in industrial boilers and domestic heating applications.
According to Future Market Insights market intelligence study on Wood Pellet Market, sales are poised to grow at percent 11 percent CAGR over the next ten years. The demand is expected to increase owing to its ability to perform combustion without generating any smoke. Another reason to use pellets is their small particle size. When used with proper equipment, wood pellet powered cook-stoves are as clean and stable as their LPG counterpart but at a lower cost.
Wood pellets are becoming popular among various end-use industries as they are looking for sustainable and carbon-neutral sources of energy to reduce their greenhouse gas (GHG) emissions in compliance with stringent GHG emission norms.
Gabon: Biomass abundance creating lucrative opportunities
Countries such as Cameroon, Central African Republic, the Democratic Republic of the Congo, Republic of the Congo, Equatorial Guinea and Gabon possesses 216 million hectares of tropical rainforest reserve. Most of these countries are highly dependent on wood pellets for their energy needs. Thus, they have created lucrative opportunities for wood pellet manufacturers in the region.
Currently, untreated biomass containing residues from agriculture production, post-processed crop residues, and timber production residues are used in Congo River basin countries for biofuel production. Untreated biomass is a poor source of fuel for bio-energy production and utilisation owing to its low density, low calorific value, and high sensitivity towards humidity. However, with the establishment of new production plants, technological advancement, and increasing investment from top companies, this scenario is changing in Africa.
Enviva Partners LP, Pinnacle Renewable Energy Inc., Wood Pellet Energy (UK) Ltd, Andritz AG, Energex, and Georgia Biomass LLC are among the companies operating in the international market. While regional players are also entering the market owing to the large reserve of forest resources in the region.
Congo Basin Pellet is one such example. The company is building a 30,000-ton per year pellet production plant in Gabon. The Nkok plant will use wood waste from the 50 wood transformation companies installed in the Special Economic Zone, about 30kms east of Libreville. The wooden pellets made from Okoume and Azobe woods will be shipped to European power plants.
South Africa: Investors eyeing production
When it comes to mitigating climate change, South Africa is the front runner among other African nations. Investors are focusing on this region, as the majority of their partners have been operating in the country for decades and are actively developing sustainable wood pellet and high-value energy chains in the country. There are clean fuels pellet manufacturing plants present in Port Elizabeth further boosting investor confidence in the region.
Forestry being a major industrial sector in South Africa, woody biomass suitable for making pellets is readily available in bulk amounts from forests and sawmills. Initiation of multiple environment protection programmes is also providing substantial woody biomass for pellet production. This will create a lucrative opportunity for market players who want to enter the region.
Hive Energy, iLive Sustainable Development, and Partners for Innovation took over the idle wood pellet production plant at Coega Development Zone near Port Elizabeth in 2020. These three companies are project development companies operating in renewable energy, waste-to-energy, and bio-energy space. They are upgrading and revitalising the wood pellet factory through modern tech to create a profitable business and realise positive socio-economic and environmental impacts at a regional level.
The South African government is also taking proactive measures to reduce dependency on coal-fired plants. For instance, the government is currently building a 25MW biomass plant as a part of its Renewable Energy Independent Power Producer Programme. As a part of this initiative, the biomass plant will use wood pellets and biomass pellets made from waste material from the surrounding plantations for power generation.
Parting thoughts on bioenergy
Companies are developing innovative torrefaction technologies for producing wood pellets. They are also searching for feasible and viable drying techniques for white and black biomass pellets production. White pellets are considered ideal for industrial applications like heating furnaces in power plants while black pellets are easier to transport over long distances and require less critical feedstock.
The benefit of wood pellets has huge potential in terms of contributing to a more sustainable and green economy. However, the development of new wood pellet or similar clean energy value chains is a slow process, difficult to implement, and requires sustained cooperation between business, government and local communities.
South Africa will be benefitting the most from the current clean energy boom. The country is setting up more wood pellet factories to boost its production rate and exporting them to Europe, in order to make more profit. European countries are importing more biomass pellets, as more and more countries are switching to wood pellets for domestic heating purposes. Future Market Insights report that over 60% of overall biomass pellet sales currently come from Europe.
Based on the aforementioned factors, the future of the wood pellet market in Africa looks bright and promising over the upcoming decade.
Nikhil Kaitwade is Associate Vice President (AVP) – Market Research at Future Market Insights, ESOMAR-certified market research and consulting firm Future Market Insights (FMI). The award-winning firm is headquartered in Dubai, with offices in the US, UK and India. MarketNgage is the Market Research Subscription Platform from FMI that assists stakeholders in obtaining in-depth research across industries, markets and niche segments
This article first appeared on ESI-Africa.com