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Wood pellets are manufactured from compressed wood waste – usually sawdust or shavings – but also from pulpwood size whole trees that are chipped and converted to pellets.  The moisture content of finished pellets is approximately 6-8%, and no adhesives are used to bind the pellets.  Instead, the high pressure exerted on the material as it is compressed causes the lignin in the wood to act as a natural binder.

Bagged pellets are most often used for heating homes, typically in places where heating oil and propane are the most readily available other options.  The other very large use of pellets is for co-firing in power plants in Europe and, more recently, Asia.  The forest products industry has responded to this growing market by developing pellet manufacturing facilities that are either co-located at sawmills or in the vicinity of primary conversion facilities so that the pellet raw material does not have to be shipped long distances.

Beck has completed a number of wood pellet feasibility studies.  The analysis typically covers the following factors:

  • Raw material supply analysis

  • Pellet market assessment

  • Technical assessment of pellet plant, including capital costs, operating cost assumptions, and other production-related issues

  • Financial analysis of the return on investment

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