A renewable replacement for black coal could be made by converting Tasmanian plantation wood into biomass fuel pellets. A feasibility study by private equity firm New Forests could see a $130 million pellet plant built in the Tamar Valley.

After being snubbed domestically, 250,000 tonnes of “cooked” wood pellets could be heading to Japan, where coal power stations are subsidised to substitute the product for black coal, to reduce carbon emissions. Steam would be used to “cook” the less than 5mm wood particles at 200 Celsius under 20 atmospheres of pressure. New Forests managing director Mark Rogers said the densified wood pellets would be made from forestry residues from Forico timber plantations in Tasmania certified by the Forest Stewardship Council. The plant could be located on a disused wood chip export mill site at Long Reach.

Mr Rogers said. “The reason it’s going ahead in Japan is because the carbon component is being recognised in the feed-in tariff price. At the moment it’s 24 yen (27c) per kilowatt hour. “If Australia had a similar signal, then there is no reason why some of our black coal power stations could not use these pellets.” However the company was snubbed by the Clean Energy Finance Corporation, which said “The densified pellets did not meet its guidelines for subsidy.” Federal Environment and Energy Minister Josh Frydenberg recently flagged a new mandate for the CEFC, including more efficient and lower emissions coal power, as the nation looks to shore up reliable base load energy while fostering renewables. Mr Rogers said “The energy is stored in the pellets, which act as a battery. Bioenergy could be one of those options, like gas, which is lower carbon; and bioenergy is sometimes zero carbon but is still baseload. It will be interesting to see how that plays out in policy.

Japan has taken a strong stand and Australia has been procrastinating for 10 years. Forico chief executive Bryan Hayes said “Coal power plants could substitute up to 50% of their feedstock with the black wood pellets without major changes to plant and equipment. The total (Japanese coal power) industry is looking to substitute about 10% but in any plant it could be 20% to 50%,” The pellets produce slightly less energy than coal. “The black wood pellets can produce about 15 to 16 gigajoules per cubic metre and hard, thermal coal is about 21,” said Bryan. A decision is expected midyear and the plant could be operational by the end of 2017.