BERC Pellet-Mill Report 2009

Addison County Pellet Feasibility Study
Final Report
November 2009
Acknowledgements Many people contributed to this study by providing their insight, review, and expertise. A steering committee was established and provided guidance throughout the study. These study stakeholders provided essential information and feedback throughout the process, and we thank the Steering Committee Members: Kevin Behm, Assistant Director, Addison County Regional Planning Commission Sid Bosworth, Associate Extension Professor, University of Vermont Ted Foster, Co-Owner, Foster Brothers Dairy Farm Adam Lougee, Executive Director, Addison County Regional Planning Commission Bob McNary, Addison County Regional Planning Commission Energy Committee Chair Harvey Smith, Former Director of Vermont Farm Service Agency and ACRPC Executive Board Member Chris Olson, Addison County Forester, State of Vermont Department of Forests and Parks Bill Scott, Chair, Addison County Farm Bureau Netaka White, BioFuels Director, Vermont Sustainable Jobs Fund Robin Scheu, Executive Director, Addison County Economic Development Corporation Special thanks go also to Mike Brouillette at Vermont Center for Geographic Information for the spatial analysis performed for the ber assessment and to Scott Sawyer at Vermont Sustainable Jobs Fund for coordinating synergistic efforts on the Vermont Energy Atlas. Nancy Wasserman of Sleeping Lion Associates conducted review of the conceptual pellet mill business nancials.
Additional thanks go to the following individuals for their assistance: Andy Mayer, Executive Director, Addison Chamber of Commerce Chris Brooks, CEO,Vermont Wood Pellet L.L.C Brian Terry, General Manager, Curran Energy L.L.C Duncan Harris, Redstone Real Estate Disclaimer This report presents the best effort to determine, conceptually, whether a pellet fuel manufacturing business could be established in Addison County and if so what the optimal sized business would be. None of the information contained in this report is specic to any particular business or project. All information and conclusions drawn are conceptual in nature and should not be construed as professional assessment of the viability of any specic project. Biomass Energy Resource Center The mission of the Biomass Energy Resource Center (BERC) is to achieve a healthier environment, strengthen local economies, and increase energy security across the United States by developing sustainable biomass energy systems at the community level. BERC is an independent, national nonprot organization that assists communities, colleges and universities, schools, state and local governments, businesses, utilities, and others in making the most of their local energy resources. With expertise in institutional and community-scale wood energy systems, BERC helps initiate and implement biomass projects for heating and power needs.
Printed on 100% post-consumer recycled paper manufactured using 100% wind-generated electricity. Copyright November 2009 Biomass Energy Resource Center. All rights reserved.

Final Report November 2009
Contents
Executive Summary 1.0 2.0 3.0 4.0 5.0 Introduction Study Scope Methods Introduction to Pellets Wood Fiber Assessment for Addison County Agricultural Fiber Assessment for Addison County Potential Pellet Mill Site Identification Pellet Fuel Market Assessment for Addison County Pellet Fuel Manufacturing Business Overview Study Conclusions Appendices 1 4 5 7 8
12
6.0
37
7.0
48
8.0
55
9.0
69 82
10.0 11.0
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BERC Final Report on Addison County Pellet Feasibility Study
Executive Summary
The Town of Bridport and the Addison County Regional Planning Commission (ACRPC) received a Vermont Community Development Program Planning Grant from the State of Vermont. They hired Biomass Energy Resource Center (BERC) to assess the feasibility of locating a pellet mill in Addison County and to determine to what extent bers for making pellets could be sourced from within the county and pellet fuel could be sold locally to serve the Addison County heating market. The scope of work includes an estimation of wood and agricultural ber availability and pricing, identication of sites for a potential bio-ber fuel production plant, an assessment of the pellet fuel market in Addison County, and an overview of a pellet fuel manufacturing business including site layout and capital costs. FIBER SUPPLY Pellet fuel is nearly completely dry whereas freshly cut wood or grass contains signicant moisture levels. Any pellet mill using green wood ber as its primary ingredient requires nearly twice as much input material than its production of pellets. The major difference is water weight lost in drying. Addison County covers 516,895 acres in total, of which 230,268 acres or 45 percent are forested and 133,946 acres or 25 percent are under agricultural uses. The remainder is mostly developed areas and bodies of water. Small volumes of wood residues from sawmills, secondary wood processing, and communities exist, but are either in high demand, have a dwindling supply, or are not ideal for pellet making. In order to use wood ber for pellet making, any facility will require an abundant, stable supply. Therefore, a very large majority of the wood ber will be sourced from harvested low-grade wood from local forests. Detailed analysis of the forest wood ber available in Addison County concluded that there is less than 100,000 green tons of low-grade wood suitable for wood fuel production on an accessible and presumably managed footprint of forestland. When current demand for residential rewood, pulp ber, and biomass for energy are subtracted, less than 20,000 green tons remain in excess capacity. If a pellet mill were built in Addison County and the owners looked to source its wood exclusively from within Addison County, it would signicantly limit the size of the pellet mill to the lower end of the normal pellet mill size spectrum. It should be noted that a typical sized pellet mill would likely draw upon several counties for its ber supply not exclusively Addison County. If a larger procurement area were used, a dramatically larger pellet mill could be supported with wood ber. Wood is not the only ber from which pellets can be made. Agricultural materials such as grass can be made into pellets; for this reason, the study also included analysis of the potential for agricultural bers to supplement the supply of wood. In any given year there are signicant amounts of waste hay (hay unsuitable for animal feed) produced each year in Addison County. However, due to the highly variable weather from year to year, the exact amount produced annually uctuates widely. In addition, the potential for dedicated energy crops (primarily grasses) were modeled. This analysis concluded there is far greater capacity to grow agricultural ber than there is sustainable supply of wood ber(beyond existing demand for wood fuel)conservative scenarios targeting small percentages of under-utilized farm land yielded amounts of ber equal to the modest amounts available from forests in the county.
Study purpose: to assess the feasibility of locating a pellet mill in Addison County to determine to what extent fibers for making pellets could be sourced from within the county and pellet fuel could be sold locally to serve the Addison County heating market
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However, while the in-county potential is greater for grass than for wood, the pellet mill business model does not currently support using more grass than wood ber. There are two main reasons whygrass costs on average 72 percent more than wood ber and grass bers contain on average four to six times greater levels of ash causing minerals. The large majority of the pellet purchasing market wants low-price and low ash pellet fuel with excellent performance and convenience. Therefore, at the current time, agricultural bers cannot compete in the market with wood ber and should only be considered a short term remedy to ll supply holes in the wood supply. As the markets change over time, grass may prove a more viable option. Left only with wood ber, the local resources of Addison County could not fully support a small pellet mill (3 tons per hour capacity) producing approximately 10,000 tons of saleable pellets annually. A more likely scenario of drawing wood from surrounding counties in addition to Addison County would signicantly increase the viability of ber supply for a larger pellet mill (6 or 12 ton per hour capacity). PELLET MILL LOCATIONS Pellet mills are fairly similar to sawmills in their facility size, nature of operation, and siting requirements. By reviewing industrial zoned parcels ve acres and larger, this study identied multiple locations for a possible pellet mill in Addison County. The scope was narrowed by reviewing truck access, distance to neighbors, access to rail spurs, distance to threephase electricity, and current use compatibility to select the ve best sites1. These were, in no particular order:
Undeveloped farmland adjacent to the Vermont Natural Ag Products composting operation Undeveloped land located on Industrial Ave in the Middlebury Industrial Park Integrated at the former Claire Lathrup Bandmill site in Bristol Integrated with the A Johnson Companys active sawmill operation in Bristol Integrated with the current feed mill operations at the old White Pigment mill in New Haven Most of the sites identied above could support 3 or 6 ton per hour pellet mills, however only the largest parcels could support a full 12 ton per hour pellet mill. PELLET FUEL MARKET At roughly 2.4 percent of the total heating market, the current commercial and residential markets for pellet heating fuels in Addison County are in their infancy, but the market potential for further conversion to pellet-based heating is strong. Analysis of Addison County commercial and residential heating concluded that there is insufcient current market within Addison County alone to support even a small pellet mill. However, further analysis of projected pellet heating market growth concluded a more than 600 percent increase in Addisons pellet market would be necessary to support a small pellet mill producing 10,000 tons annually. Like the ber assessment, the market study found that while the current in-county market for pellet sales is rather small, extending distribution to include both Chittenden and Rutland Counties would dramatically increase the size pellet mill that could be viable.
1 There are numerous other possible sites that could possibly support a pellet mill in Addison County. The list presented above is intended to present the best ve sites of those identied in this search and not intended to be an exhaustive list.
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A small online survey of Addison County residents and businesses showed that considerable interest exists in converting to pellet-based heating. However, most of those surveyed need less than a four-year simple payback on the investment to install the pellet heating appliance and a reliable source of pellets. At todays heating oil price of $2.50 per gallon, a typical payback period for installing a pellet heating appliance would be 5.3 years (only 3.7 years with current tax incentives). Whereas at $4.50 per gallon heating oil, this payback period would be cut in half. Survey responses from Addison County residents and businesses support the conclusion that dramatic expansion of the current pellet market would occur should the price of oil and propane rebound to their 2008 levels.
CONCLUSIONS Based upon the results of this ber resource assessment, the potential site location review, and the market assessment, BERC concludes that a pellet mill producing 10,000 tons per year is the optimum sized pellet manufacturing facility to serve Addison County. However, it is important to note that should a business envision a larger ber procurement area and larger product distribution area, Addison County could support a larger pellet millup to 50,000 tons per year in capacity. Development and examination of conceptual business pro forma nancials for three different sized pellet mills indicated that the largest pellet mill (capable of producing upward of 90,000 tons per year) produced the greatest nancial rate of return while the smaller pellet mill size (10,000 tons per year) yielded a very modest yet still positive return on investment.
Pellet Mill Size Small Medium Large
Pellet Mill Design Capacity 3 tons per hour 6 tons per hour 12 tons per hour
Operational Output Capacity Range2 7,200 to 21,600 tons per year 14,400 to 43,200 tons per year 28,800 to 86,400 tons per year
Variables include the number of eight hour shifts per day and the number of days per year the mill operates.
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1.0 Introduction
1.1 PROJECT OVERVIEW The Town of Bridport, Vermont and the Addison County Regional Planning Commission (ACRPC) received a Vermont Community Development Program Planning Grant from the State of Vermont to assess the feasibility of a solid bio-fuel production facility to be located in and draw feedstock from Addison County. They hired Biomass Energy Resource Center (BERC) to do this assessment. The following report details the ndings of the study. 1.2 PROJECT PARTNERS 1.2.1 Addison County Regional Planning Commission. ACRPC has 21 member communities and assists these communities by providing a forum for towns to discuss and resolve mutual concerns, providing assistance to towns with the planning process and information gathering, and developing a regional plan. 1.2.2 Biomass Energy Resource Center. BERC is an independent, national nonprot organization located in Montpelier, Vermont with a Midwest ofce in Madison, Wisconsin. BERC assists communities, colleges and universities, state and local governments, businesses, utilities, schools, and others in making the most of their local energy resources. BERC is a project-focused organization whose mission is to achieve a healthier environment, strengthen local economies, and increase energy security across the United States through the development of sustainable biomass energy systems at the community level. BERCs particular focus is on the use of woody biomass and other pelletizable biomass fuels.
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2.0 Study Scope

The study area for this assessment included all 23 towns of Addison County (shown in the map below): Addison, Bridport, Bristol, Cornwall, Ferrisburg, Goshen, Granville, Hancock, Leicester, Lincoln, Middlebury, Monkton, New Haven, Orwell, Panton, Ripton, Salisbury, Shoreham, Starksboro, Vergennes, Waltham, Weybridge, and Whiting. Both the forest- and agricultural-ber analyses reported here give acreages and tonnages for all 23 towns.3 While 23 towns may seem like a large geographic area, it is a relatively small area when the radius of a circle is overlaid and the distance measured. Addison County covers 808 square miles and its entire area can be covered within a 20-mile radius from the center of the county (see Figure 1 at left). The emphasis of this study was to determine the viability of an atypical pellet fuel production facility that would draw upon the ber resources only from within Addison County and aim to meet the pellet fuel heating needs of only Addison County. In a time when the typical pellet mill business template is large-scale production drawing upon a large ber basket and selling pellets regionally and even exporting product overseas, the concept of a smallerscale pellet mill, drawing upon a smaller area for source ber and distributing pellets locally, bucks the growing trend.
Figure 1.The study area for this assessment included all 23 towns of Addison County.
3 ACRPC serves 21 of the 23 towns in the county, excluding Granville and Hancock for practical geographic reasons, since Granville and Hancock fall on the eastern side of the Green Mountains. They more easily access and interact with other neighboring towns.
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BERC conducted a county-wide assessment to quantify, at the town level, the available and potential bio-bers that could be used as pellet feedstocks for this pellet mill. The study included both wood bers and the potential for agricultural bers. Average pricing and potential impacts on pricing were also considered. Other waste materials were not quantied due to the uncertainty of their performance as marketable pellet fuel. The study included market surveys and analysis of census data to determine the size of the potential market for pellet fuel within Addison County.
The best sites were identied within the county for a solid bio-fuel production facility to be located in and draw feedstock from within the county. Pro forma nancials were developed and assessed for three different sized pellet mills based on pellet mill capital costs, production costs, and market projections. From the ber assessments, the site review, the market assessment, and the review of the pro forma nancials for three different sizes of pellet mill, conclusions were drawn on the optimally sized facility suitable for Addison County.
Figure 2.
PELLET MILL SIZE, CAPACITY & OUTPUT Pellet Mill Size Small Medium Large Pellet Mill Design Capacity 3 tons per hour 6 tons per hour 12 tons per hour Operational Output Capacity Range4 7,200 to 21,600 tons per year 14,400 to 43,200 tons per year 28,800 to 86,400 tons per year
Variables include the number of eight hour shifts per day and the number of days per year the mill operates.
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3.0 Methods
The project methods are outlined in summary below. Full descriptions of methods used are provided in detail within the respective sections of this report. 1. FIBER ASSESSMENT a. Wood fiber assessment. Best available data on forestland area, forestland ownership, forest inventory, forest growth, and harvesting were assembled and entered into a custom model designed to calculate the amount of surplus wood ber at the town level. b. Agricultural fiber assessment. Best available data on agricultural land area, agricultural land use classication, and dedicated energy crop yield were assembled and entered into a custom model to examine the dedicated energy crop yield capacity in Addison County at the town level. 2. IDENTIFICATION OF POTENTIAL SITES FOR A PELLET MANUFACTURING FACILITY a. Digitized town zoning maps were assembled and standardized to identify industrial zoned sites of ve acres or larger. Preliminary sites identied were further assessed to determine viability based on location, truck and electric access, access to rail, distance to nearest neighbors, and compatibility with existing and/or historic site use. 3. MARKET STUDY a. Quantication of the existing and potential residential market for pellet fuel. Data were assembled and reviewed. Scenarios of possible market expansion were explored based on fossil fuel heating prices and simple payback on installing pellet heating equipment. Residential survey responses were used to supplement the data gathered. b. Quantication of the existing and potential commercial market for pellet fuel. Data were assembled and reviewed. Scenarios of possible market expansion were explored based on fossil fuel heating prices and simple payback on installing pellet heating equipment. Commercial survey responses were used to supplement the data gathered. 4. DEVELOPMENT AND ASSESSMENT OF PRO FORMA FINANCIALS FOR VARIOUS SIZES OF PELLET MILLS a. Projected capital costs, year one cash ow, and 10-year pro forma nancials were developed for three different sizes of pellet mill using information from pellet industry experts, published reports, and pellet mill owners and operators.
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4.0 Introduction to Pellets

4.1 PELLET OVERVIEW To introduce the framework for this study, a general discussion of pellet fuel is given in this section of the report, including the fuels characteristics, specications, and the advantages to using pelletized biomass fuels. 4.1.1 Description of Pellet Fuel. Fuel pellets can be made from a wide variety of biomass materials. Pellets are usually manufactured out of by-product wood bers from the forest products industry, such as sawdust and shavings, which are dried and extruded through pellet dies under high heat and pressure. Pellets can also be made using woodchips and/or non-woody plant material. Nationally, and even in Vermont where forests cover 78 percent of the land area, there is growing interest in the development of biomass fuel pellets made from agricultural feedstocks such as crops like grass or residues like corn stover or oat hulls. The recommended biomass feedstock depends on the cost of the fuel, the size of the facility, its heat load, boiler type and size, and other factors. Wood and agricultural biomass is generally processed or densied into pellets, cubes, or briquettes. While sometimes small amounts of binders or lubricants are added to the material, pellets can be made without the use of any additives. Natural plant lignin in the pelletized material is melted by the friction heat created as material is extruded through the pellet die, creating a durable casing that holds the pellets together without glues or additives.
Pellets are a uniform size and shape, making them easier to store and use than other biomass fuels.
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4.1.2 Advantages to Heating with Pellets. Biomass fuels such as pellets help to mitigate environmental issues like acid rain and global climate change. Perhaps the greatest advantage to biomass fuels, however, is they cost on average 25-50 percent less than traditional fossil heating fuels and are more stable in pricing. Also, any future carbon or energy taxes are less likely to increase the cost of biomass fuels and are more likely to raise the cost of heating with fossil fuels. Pellets are a locally-available and cost-effective biomass heating fuel, with several advantages over other types of biomass fuels. Pellets are a condensed form of biomass energy available in a uniformly sized package, which makes them easier to store and use than some other biomass fuels. The technology is also quite simple, minimizing operation and maintenance requirements. In addition, pellets: have a high energy content by volume and can be bulk stored in less space than other biomass fuels; are a clean-burning renewable fuel source and the technology is highly efcient compared to other biomass fuels; are price stable compared to fossil fuels. 4.1.3 Pellet Fuel Markets. Wood pellets are manufactured in the US and Canada and are available for residential use in 40-pound bags which can be bought in hardware or feed stores, nurseries, or other supply stores. Increasingly, heating with pellets is becoming common on larger scalesin municipal or federal buildings, educational facilities, housing complexes, ofce buildings, and other businesses.
While the majority of installations in this size range are in Europe, a growing number are in North America, including New England. The greater heating requirements of these buildings differ from those of residential settings, thus requiring different technology (boilers rather than stoves) and fuel supply infrastructure (bulk wood pellet supply as opposed to bags). When heating oil prices began their rapid rise in 2006 there was a resulting surge of market growth in the northeastern US, where oil heating is very prevalent, for both pellet heating appliances (mostly stoves) and for the pellet fuel itself. For the past two years there have been reports of long waiting periods for shipment of pellet stoves and shortages of pellet fuel. Today, only a small portion of the pellets burned in Vermont come from within New England. Signicant volumes of pellets are imported into the region from the Rocky Mountain Region, British Columbia, and Quebec. 4.1.4 The Importance of Local and Sustainable Biomass Fuel. The benets to heating with biomass fuels described above are best achieved when the feedstock is sourced locally and sustainably. In response to increased pellet fuel heating and increased demand for pellet fuel in Vermont, several pellet mills have been proposed in the state. By producing pellets in Addison County from locally- and sustainably-procured forest and agricultural feedstocks, greater energy security and self-sufciency can be achieved.
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PFI PELLET QUALITY STANDARDS Likely Source Materials Super Premium Premium Standard Wood ber Wood ber Primarily wood ber with possibly a small percent of other ag ber Wood ber, bark, grass, other Size Moisture Content <6% <8% <8% Btu Value >8,000 Btu/lb >8,000 Btu/lb >8,000 Btu/lb Ash Content <0.5% <1.0% <2.0% Bulk Density 40-46lbs/ft3 40-46lbs/ft3 38-46lbs/ft3 Fines Content <0.5% <0.5% <0.5%
6-8mm 6-8mm 6-8mm
Utility or Industrial
6-8mm and larger
<10%
>8,000 Btu/lb
<6.0%
38-46lbs/ft3
<0.5%
4.2 PELLET QUALITY Pellet fuel quality can range widely depending on the source materials and manufacturing process control. There are many different species and sources of feedstock and many ways in which the material can be harvested, processed, loaded, transported, and received, all of which can impact the overall quality of the pellet and thereby the successful operation of the pellet heating system. The performance of pellet heating systems is optimized by using a high-quality fuel designed for the heating equipment. 4.2.1 Pellet Fuel Specifications. Pellets provide clean, consistent, and uniformly-sized fuel. Ensuring that pellet fuel is up to certain standards means fewer mechanical jams, less ash produced (and therefore less time spent on removing ash), and longer periods of maintenance-free burn time. The Pellet Fuels Institute (PFI) is a national organization that promotes the use of pellet fuels and has established standards governing the quality of pellet fuels sold on the market. Figure 3 illustrates the pellet fuel quality parameters for the four main grades of pellet fuels as designated by PFI.
4.2.2 Discussion of Pellet Quality Parameters. Size Fuel pellets are of uniform size and shape (between 1 or 1 inches in length by approximately - 5/16 inches in diameter), making them easy to store and use in fuel auguring systems. Pellets also take up much less space in storage than other biomass fuels because they are relatively dry and densied compared to other biomass fuels such as woodchips. Moisture Content Pellets typically have moisture content between four and six percent. If pellets are stored improperly and are remoistened, many issues are created. Energy Content (Btu Value) Pellets have a higher energy content by weight (roughly 8,084 Btu per pound at six percent moisture content) than woodchips (roughly 4,500 5,000 Btu per lb at 50 percent moisture) and other non-densied biomass fuels. Pellets should contain a minimum of 8,000 Btu per dry pound.
Figure 3.
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Ash content and mineral composition Ash content is perhaps the greatest distinguishing parameter among the four grades of pellet fuels. Super Premium pellets have less than 0.5 percent ash content; Premium pellets, less than one percent; Standard pellets, between one and two percent; and Utility or Industrial pellets have two to six percent. The amount and composition of minerals in the fuel will determine the amount of ash produced and to what extent these minerals will fuse or melt together, forming clinkers during combustion at standard combustion temperatures.5 Density Pellets have consistent hardness and energy content (minimum 40 pounds/cubic foot for Premium or Super Premium). Density is a key factor in pellet fuel quality. Less dense pellets will burn less efciently and deliver less heat. Less dense pellets are also less durable and often degrade into nes prematurely. Fines There is commonly a small amount of nes or dust from pellet breakdown due to wear and tear in handling and shipping. Excessive nes content can cause material bridging in the fuel hopper; minimizing the amount of nes content avoids fairly serious problems with the fuel feeding systems. The amount of ne dust passing through 1/8-inch screen should be no more than 0.5 percent by weight. Chlorides There should be limited salt content (no more than 300 parts per million) in pellets. When pellets are burned, chloride gases are extremely corrosive to metal and excessive levels can cause signicant damage to heat exchange and exhaust venting systems.
4.3 RECOMMENDED PELLET QUALITY FOR A PELLET BUSINESS IN ADDISON COUNTY In order to increase pellet fuel use within the residential and commercial markets, pellet fuel producers must strive to manufacture high quality pellets that can be burned easily and reliably in pellet heating appliances on the market today. Without the convenience of burning high-quality, reliable pellet fuel, fewer homeowners and business owners will likely switch from burning no-hassle liquid fossil fuels. Super Premium and Premium grade pellets are suitable for almost any pellet stove appliance. Premium and, to a certain extent, Standard pellets are suitable for most pellet boilers with automatic ash removal systems. Industrial grade pellets, or those with the increased risk of clinker (fused ash) formation are suitable for use in very large industrial boilers designed to handle such high ash content fuels. For the purpose of this report, it is assumed that Super Premium, Premium, and perhaps Standard grade pellets are the target products for Addison County. Industrial grade pellets could be produced, but would have a limited market, particularly since woodchips ll the industrial grade biomass heating fuel niche at roughly half the cost per Btu compared to pellets.
http://www.pelletheat.org/3/industry/index.html.
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5.0 Wood Fiber Assessment for Addison County

The rst step in determining whether a pellet mill could be located in Addison County is to determine how much source ber is available. Wood is the most common source of pellet fuel ber and historically wood pellets have been made almost exclusively from sawmill residues. Since pellet fuel is relatively low in moisture content (six percent) compared to freshly cut wood (or grass) that contains signicant moisture levels (40-60 percent for wood), any pellet mill using green wood ber as its primary feedstock will require nearly twice as much input material than its production of pellets. The major difference is water weight lost in drying the feedstock. 5.1 SOURCES AND AVAILABILITY OF WOOD RESIDUES 5.1.1 Sawmills. The business of sawing round logs into dimensional lumber produces a signicant amount of by-product wood. The slabs and off-cuts from lumber production at larger sawmills is typically chipped and shipped to regional pulpmills, biomass power plants, or woodchip heated institutions. These mill or paper chips are an excellent feedstock for pellet making. Mill chips tend to be the highest quality chips available because the sawlogs are debarked before being cut into lumber (without bark, the resulting chips have relatively low ash content). Mill chips are also commonly screened to remove over-sized stringers and nes. Wasted wood from sawmills is commonly chipped on a continual basis as logs are sawn and chips are blown directly into dedicated box trailers. When the trailers are full they are shipped to the various markets and empty trailers are set in their place. In addition to chips, sawmills also produce signicant volumes of bark and sawdust, both of which can be used as a feedstock for pellets. Sawdust is perhaps the most ideal material for making pellets: it is clean, high-quality material that is already ground into small bers and in many cases it is already dry. Despite the advantages of using sawdust as a primary feedstock for pellets, it is in tight supply because production is low and demand is high. Sawdust from sawmills has long been sold as bedding to farms. Dairy farms have, over the past ve years, experienced drastic price increases for sawdust due to the dwindling supplies and competition from regional pellet mills. During the past few years average prices for sawdust have increased an estimated 300 percent. Hardwood bark from sawmills is frequently used as boiler fuel at sawmills to run the lumber drying kilns. Hardwood bark is also frequently sold to composting operations for use in com-
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post and top-soil production. Softwood bark is most commonly sold to the horticultural markets as a mulch product. The value of softwood bark as mulch far exceeds its value as a fuel. It is extremely important to note that in the past several years the regional production of byproducts such as chips, bark, and sawdust has declined for two main reasons: (1) increased sawmill efciencies (producing more lumber and less waste) and (2) declining sawmill activity due to softening lumber markets. At the same time, demand for sawmill by-products has grown dramatically: Biomass power plants, wood heating systems, and regional pellet mills have increased the demand for these materials. There are two large sawmills in Addison County: A Johnson and Lathrups Maple Supply, both in Bristol, Vermont. There are several other smaller sawmills in the county producing well under one million board feet (MBF) per year. There are also several portable sawmills in operation, but these mills process relatively small volumes and thereby generate minimal volumes of residues. When assessing residue availability, larger sawmills should be targeted because they generate sufcient volumes and because the infrastructure to collect, load, and transport the material is already in place at the mill. Again, it is important to note that nearly all the material generated from these sawmills has existing markets and any use of these materials for pellet making would divert this material from another market that may be very dependent on its supply (i.e. farmers using sawdust for bedding).
5.1.2 Wood Products Manufacturing. There are several wood products manufacturing businesses in Addison County that generate waste wood scraps and sawdust from manufacturing raw lumber into value-added products such as ooring, furniture, and cabinets. Many of the businesses that manufacture wood products and generate wood scraps and sawdust produce very small volumes. Most either burn their scrap wood onsite for space heating or bag and sell it as kindling. Any signicant volumes of sawdust are sold to local farms. 5.1.3 Clean Community Wood Wastes. Addison County Solid Waste District (ACSWD) diverts approximately 800 tons of clean community wood waste each year from their facility. This material includes tree trimmings less than six inches in diameter, discarded Christmas trees, wooden pallets, tree stumps, etc. This material is collected at the transfer station, periodically ground into mulch chips, and currently given away as mulch to area residents.6 While ACSWDs wood waste is relatively clean, only a small amount is available since a large percentage of the waste wood in rural areas like Addison County is pile-burned or dragged into the woods to slowly decompose. Also, in general, community wood waste is a poor feedstock for making pellets. The ash content is high and the risk for contamination from painted or treated wood is too great. Community wood waste is not a recommended feedstock for pellet making.
Addison County Solid Waste District 2007 Annual Report.
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5.1.4 Conclusions on the Availability of Wood Residues. Addison County does not have a signicant wood residue resource. Community wood waste is not recommended for pellet manufacturing. While mill residues and waste from wood products manufacturing could be available, there are typically already established markets for this material. Increased demand will escalate prices, potentially hurting other parts of Addison Countys economy. In addition, mill residues have declined in availability and may continue to do so. Building a pellet manufacturing business that is dependent on this material is not recommended. 5.2 LOW-GRADE WOOD HARVEST POTENTIAL With extremely limited availability of wood residues within Addison County, harvested wood will likely account for nearly all wood ber sourced by a pellet mill. While higher-quality timber products such as veneer and sawlogs are commercially harvested routinely as part of forest management, low-grade wood has often been left behind in the absence of a reliable market. Reliable local markets for low-grade wood can create economic incentive to remove low-grade trees to help enhance the growth of the higher-quality trees for future harvest. Estimates were made of the amount of lowgrade wood that is accessible and available on an annual basis for making pellets. In an effort to quantify the low-grade wood that could be harvested for a pellet mill, a thorough review was conducted of forestland area, ownership, inventory, growth, and removals.
In order to quantify the potential wood resource in Addison County, BERC identied the footprint of actively managed forestland that would be accessible for harvesting and estimated the annual growth of low-grade wood that could be harvested sustainably from that footprint. By accounting for existing rates of harvest in the county for rewood, biomass, and pulp, BERC estimated the net amount of low-grade wood that would be available annually in Addison County (on a sustainable basis). The process is outlined below. 1. Gather and review data on wood residue generation. 2. Identify the total forested footprint in Addison County at the town level. 3. Perform spatial analysis to lter out inaccessible forestland and ecologically sensitive areas where forest management requiring periodic harvesting would be inappropriate. This was done sequentially so that areas were not double-counted if they fell within more than one category of inaccessibility. 4. Model annual growth of low-grade wood at the town level in Addison County using US Forest Service inventory data on forestland area ownership, forest inventory and composition, and forest growth. 5. Determine existing demand for wood (using State data on harvesting) and the net availability of low-grade wood from Addison County for potential use in pellet fuel manufacturing. 6. Examine harvesting and transportation costs and market pricing for low-grade wood to estimate wood ber prices.
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Figure 4 (above). ArcView GIS ModelBuilder was used to filter areas of forestland in Addison County that are inaccessible and ecologically sensitive, and therefore not appropriate for harvesting.The process is outlined in this flowchart. Figure 5 (opposite page).
5.2.1 Calculated Forestland Area. Vermont Center for Geographic Information (VCGI) was hired to use a geographic information system (GIS)-based approach to calculate the forested footprint in Addison County. The National Land Cover Dataset (NLCD, 2006), showing forestland broken down into deciduous, evergreen, and mixed forest types, was used as the base layer representing total forestland in Addison County. Total forestland area in Addison County is 230,268 acres (or nearly 45 percent of the total land area). Not all forestland, however, is physically accessible and ecologically appropriate for forest management that calls for periodic harvesting. To identify the footprint from which low-grade wood can be harvested in Addison County, spatial analysis was conducted to reduce total forestland to only the footprint that is accessible and appropriate for harvesting. ArcView GIS ModelBuilder was used to lter out those areas of forestland in Addison County that are inaccessible and ecologically sensitive, and therefore not appropriate for harvesting, due to the following physical factors: slope greater than 40 percent grade elevation higher than 2,500 feet wetlands (including 50 foot buffers)
streams (including 50 foot buffers) deeryards and other designated habitat areas wilderness and other conserved lands roads (including 25 to 50 foot buffers) other developed spaces such as homes and driveways These factors were accounted for sequentially so that areas were not double-counted if they fell within more than one category of inaccessibility. The model is mapped in Figure 4 above. Figure 5 on the following page summarizes the results of this spatial analysis, showing by town and by forest type (deciduous, evergreen, and mixed forest) the remaining footprint of forestland in Addison County that is accessible and appropriate for harvesting after accounting for the physical inaccessibility factors listed above.
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Total Starting Forestland & Remaining Accessible Forestland Area in Addison County (acres)
Total Land Area Addison Bridport Bristol Cornwall Ferrisburg Goshen Granville Hancock Leicester Lincoln Middlebury Monkton New Haven Orwell Panton Ripton Salisbury Shoreham Starksboro Vergennes Waltham Weybridge Whiting TOTAL 31,327 29,642 26,371 18,391 39,192 13,275 32,625 24,696 13,882 29,312 25,403 23,212 26,560 31,823 14,103 31,599 19,262 29,521 29,155 1,621 5,910 11,243 8,770 516,895 Starting Starting Starting Total Accessible Accessible Accessible Total Deciduous Evergreen Mixed Starting Deciduous Evergreen Mixed Accessible Forest Forest Forest Forest Forest Forest Forest Forest 2,531 3,131 12,560 2,425 3,442 8,007 19,044 15,639 4,228 15,441 7,247 6,403 4,242 5,901 613 19,753 6,238 3,451 17,281 93 1,780 2,490 483 162,422 332 279 1,173 522 1,163 1,110 2,395 2,521 1,138 3,160 1,393 1,491 1,619 2,117 224 4,265 1,220 559 746 17 176 255 96 27,969 317 404 3,891 341 933 2,158 4,475 2,197 466 5,224 1,434 3,943 1,597 799 119 4,518 706 555 4,786 5 276 702 28 39,876 3,180 3,814 17,624 3,288 5,539 11,275 25,914 20,357 5,832 23,825 10,074 11,837 7,457 8,817 955 28,536 8,164 4,566 22,813 115 2,232 3,446 607 230,268 830 2,541 8,268 1,894 2,522 6,344 12,458 10,038 3,118 11,594 5,727 5,160 3,451 4,716 526 13,491 4,563 2,914 15,345 70 1,463 1,040 352 118,424 128 204 685 376 789 680 1,292 1,148 774 1,470 815 943 1,024 1,383 150 781 744 464 496 11 142 92 68 14,660 75 345 2,600 272 664 1,536 2,957 1,554 286 3,492 843 2,411 1,125 661 107 2,347 424 469 3,671 2 201 286 26 26,355 1,033 3,090 11,553 2,542 3,975 8,560 16,707 12,741 4,178 16,556 7,385 8,513 5,599 6,760 783 16,619 5,731 3,847 19,512 83 1,807 1,418 446 159,438
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As shown in Figure 5 on the previous page, out of the total forestland in Addison County, 159,438 acres (or nearly 70 percent) are found to be accessible and appropriate for harvesting low-grade wood. Results are shown by town and, as can be seen in the table above, some towns are more heavily forested, such as those on the eastern side of the county like Bristol, Goshen, Granville, Hancock, Lincoln, Ripton, and Starksboro. Figure 6.The forest area that is showing through (in shades of green) represents the portion of Addison Countys forestland that is accessible and appropriate for harvesting. Figure 6 below shows total forestland area in Addison County overlaid by the areas that are physically inaccessible or inappropriate for harvesting (in red). The forest area that is showing through (in shades of green) represents the portion of Addison Countys forestland that is accessible and appropriate for harvesting. (This is a spatial depiction of the same results shown in the table above.) A full size version of this map is included as Appendix A at the end of this report.
Figure 7 on the opposite page shows the difference, by forest type, between the total starting area of forestland in Addison County and the remaining area of forestland that is physically accessible and appropriate for harvest. 5.2.2 Net Available Wood Fiber in Addison County. In summary, the rst step identied 159,438 acres in Addison County that are physically accessible and ecologically appropriate for harvesting low-grade wood. The next step is to estimate the net annual growth of low-grade wood on that footprint, and further, the net amount of wood ber available annually after existing demands for the material and current harvest rates are accounted for. This estimation included: identifying the portion of accessible forestland that is actively managed (and therefore periodically harvested), understanding total forest inventory and the portion that is low-grade material appropriate for wood fuel production, approximating the annual rate of new growth, quantifying existing demands for low-grade wood, and understanding current harvest rates. A model was developed by BERC (adapted from the Vermont Wood Fuel Supply Study and shown in Figure 8) that takes the abovelisted factors into account to calculate the amount of low-grade wood grown annually on a sustained-yield basis on the forestland that is accessible and appropriate for harvest. The owchart in Figure 9 (page 19) gives an overview of the models inputs and outputs. The following sections of this report detail these inputs, with the ultimate result being the net amount of low-grade wood ber that would be available annually for a pellet mill in Addison County.
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Figure 7 (top). Total starting and remaining forestland, by forest type. Figure 8 (bottom). Screen shot of the BERC-developed model for calculating the amount of low-grade wood grown annually on a sustained-yield basis on forestland that is accessible and appropriate for harvest.
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Figure 9.This flowchart gives an overview of the models inputs and outputs.The result was an estimation of the net amount of low-grade wood fiber that would be available annually for a pellet mill in Addison County.
Forest Ownership and Parcel Size. As part of the quantication of low-grade wood available annually in Addison County, forestland ownership and parcel size were gauged to determine likely forest management practices with periodic harvesting. Both of these factors can be good indicators of the likelihood of harvest; therefore, the percent of forestland in each ownership category was a key component of the estimation of available low-grade wood. Figure 10 on the opposite page gives an overview of the ownership of Addison Countys forestland. National, State and Municipal forests, which comprise about one-quarter of Addison Countys forestland, are not as actively managed and harvested as forests owned by the forest industry, for example. Forests owned by corporations or farmers are moderately managed and harvested. Forestland in private ownership can be more likely to be actively managed and harvested than most of the other ownership categories (with the exception of forest industry-owned forests).
There is also a distinct difference in the likelihood of harvest on privately owned forests based on parcel size. Figure 11 on the opposite page shows the relationship between parcel size and the probability of harvesting. In general, the probability of harvesting increases with increasing parcel size. On parcels less than about 50 acres in size, harvesting is not as likely. This can be due to personal values or to the challenge of harvesting less volume from smaller forest parcels, since there is limited space for equipment to access and move around within a smaller piece of forestland. On parcels greater than 50 acres, however, it is more likely that forestland will be harvested. The tax burden on larger tracts of forestland tends to encourage these owners to harvest for the economic gains.
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Figure 10 (top). Forestland ownership and parcel size were gauged as factors that can be good indicators of the likelihood of harvest.The percent of Addison Countys forestland in each ownership category is shown here, and was a key component of the estimation of available low-grade wood. Figure 11 (bottom). In general, there is a positive correlation between parcel size and the probability of harvesting.
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Figure 12.
Forest Inventory. Another component of quantifying the amount of low-grade wood available annually in Addison County is estimating both the total inventory on the accessible forestland and the portion of inventory that is low-grade wood appropriate for wood fuel production. The only source of complete forest inventory data in Addison County is compiled by the USDA Forest Service. Since it is impossible to count every tree, the USDA Forest Service Forest Inventory and Analysis (FIA) Program uses a statistically designed sampling method. First, aerial pho-
tographs of the forest are interpreted. Next, a grid of thousands of points is overlaid on the aerial photos. If forested, each point is classied according to land use and tree size. Using this information, a sample of dozens of plots is selected for measurement by FIA eld crews. In the most recent annual survey there were 70 FIA inventory plots in Addison County. The sample includes plots that were established during previous forest inventories. The re-measurements of the same plots yield valuable information on how individual trees grow. Field crews also collect data on the number, size, and species of trees, and the related forest attributes. All this information is used to generate reliable estimates of the condition and health of the forest resource, and how it is changing over time. For live trees of a merchantable size (ve inches Diameter at Breast Height [DBH] and larger) there are two main qualitative categories: growing stock and cull. The term growing stock refers to the traditionally merchantable wood contained in live trees greater than ve inches, whereas cull refers to trees or portions of trees that are rough or rotten and therefore are traditionally un-merchantable. Only the portion of the growing stock bole7 and the portion of the cull bole inventory, marked in green in Figure 12, plus non-commercial species of live standing trees ve inches DBH and larger were counted for this ber resource assessment.
Bole is the main stem or trunk of a tree.
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While top and limb wood is a common source of wood fuel for other biomass energy markets (such as woodchips for electrical generation), it was excluded from this assessment for two main reasons: forest ecology and pellet fuel quality. Top and limb wood, often extracted from the forest as part of whole-tree timber harvests, are a vital source of organic matter and nutrients for forest soils. Removing this wood repeatedly in each harvest cycle runs the risk of adversely impacting forest soil productivity. In addition to the ecological reasons for excluding top and limb wood, it is difcult to produce highquality pellets from smaller diameter top and limb wood. High quality pellets that fetch the higher market price are produced from the white wood (wood without bark) component of the tree by stripping off the outer bark layer. Larger diameter and straighter stems are easier to effectively de-bark. Smaller stems with more curves, such as those included in the T&L wood, are extremely difcult to debark and will dramatically increase the resulting pellets bark content, therefore increasing its ash content. Standing and downed deadwood was not counted due to its value as wildlife habitat and because it does not represent inventory on which new growth occurs. Seedling and saplings were not counted either. Foliage, roots, and stumps are not counted. Figure 13 above illustrates the comparative volume of all bole wood and top and limb wood in a typical Addison County forest and the proportions of higher quality growing stock trees to the lower quality cull trees. Figure 13 also shows the majority of the forest inventory of live trees ve inches DBH or greater fall within the growing stock category. Additionally, the majority of the wood volume and mass (above a one foot stump and excluding foliage) lies within the bole, or main stem, inventory of the tree as compared to the top and limb wood. Figure 14 on the following page gives the total forest inventory,8 by town, on the physically accessible and actively managed portion of forestland in Addison County. Figure 14 also shows that the towns on the eastern side of Addison County have the most forestland area and therefore the greatest inventories of wood. Figure 13.
Total forest inventory of live trees ve inches DBH and larger (includes growing stock and cull trees and bole and top and limb wood inventory). This total is then whittled down to a smaller and more appropriate low-grade wood inventory on which net annual growth rates are applied.
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Net Annual Growth. In addition to determining the amount of standing wood (or inventory) and the forests composition, knowing how much the forests are growing and what level of harvest can be sustained over time gives a clearer picture of wood fuel availability and the viability of long term supply of wood ber for pellet fuel production. When forests are examined from a more broad perspective, wood inventory can be compared to money invested in a bank account that earns interest annually. The total annual growth of trees in a forest is analogous to the interest earned on capital. A wise nancial investor strives to only spend the annual interest and not dip into the principal. Forests can be viewed in a similar way: Continual harvesting beyond the rate of growth, or withdrawing the principal, is unsustainable.
For the purpose of this project, the net annual growth9 of wood was chosen as the indicator of how much wood the forests of Addison County can provide on a sustained-yield basis. Averaged net growth rates were applied to the portion of the forestland deemed accessible and appropriate to estimate the amount of low-grade wood growing annually in Addison County. Three model runs were conducted to cover a set of assumptions for conservative, moderate, and aggressive estimates of the net annual growth of low-grade wood on the footprint of accessible and appropriate forestland in Addison County. As was described above, the focus was on growing stock bole, cull bole, and noncommercial species of live standing trees ve inches DBH and larger. Figure 15 on the next page shows the key assumptions used in each run of the analysis. The moderate run is likely to be the most accurate depiction of reality, with the conservative and aggressive runs serving as the bookends for a possible range of results. The moderate set of assumptions in Figure 15 appears in a darker font for emphasis.
Figure 14.
9 FIA denes forest net annual growth as the change, resulting from natural causes, in growing-stock volume during the period between surveys (divided by the number of growing seasons to produce average annual net growth). The simplied FIA formula for net growth is: In-growth + Accretion Mortality = Net growth.
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Figure 15. Key Assumptions Used in Three Forest Fiber Yield Scenarios Tested
Percentage of Accessible Forest Land Actively Managed and Periodically Harvested by Ownership and Parcel Size Conservative National Forest State Municipal Forest Industry Farmer Corporate Individual < 50 Acres Individual > 50 Acres Other 0% 10% 10% 80% 40% 40% 0% 40% 10% Moderate 5% 10% 10% 90% 50% 50% 10% 50% 10% Aggressive 10% 20% 20% 100% 60% 60% 20% 75% 25%
Percent of Forest Inventory Components that Are Low Grade % Growing Stock Bole NAG Low Grade % Cull Bole NAG that is Low Grade % Growing Stock T&L NAG Harvestable % Cull T&L NAG Harvestable Average Net Annual Growth Rate 40% 40% 0% 0% 1.50% 50% 50% 0% 0% 2% 60% 90% 15% 15% 2.24%
Again, the moderate model run is the best depiction of the current reality of forest management and wood supply. The aggressive and conservative model runs are designed to illustrate the possible range should variables change in either direction. As can be seen in Figure 15, top and limb wood was included in the aggressive analysis, but not in the moderate or conservative analyses.
Using the data assembled and the key assumptions listed above, the three model runs were conducted and Figure 16 on the following page illustrates the results.
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Figure 16. Net Annual Growth of Low-Grade Wood on Accessible Managed Forestland (green tons)
Conservative Total (Bole Only) Addison Bridport Bristol Cornwall Ferrisburg Goshen Granville Hancock Leicester Lincoln Middlebury Monkton New Haven Orwell Panton Ripton Salisbury Shoreham Starksboro Vergennes Waltham Weybridge Whiting TOTAL 217 648 2,422 533 833 1,795 3,503 2,671 876 3,471 1,548 1,785 1,174 1,417 164 3,485 1,202 807 4,091 17 379 297 93 33,429 Moderate Total (Bole Only) Bole 455 1,362 5,092 1,120 1,752 3,773 7,364 5,616 1,841 7,298 3,255 3,752 2,468 2,980 345 7,325 2,526 1,696 8,600 37 796 625 197 70,276 944 2,824 10,558 2,323 3,633 7,823 15,268 11,643 3,818 15,130 6,749 7,780 5,117 6,178 715 15,188 5,237 3,516 17,831 76 1,651 1,296 407 145,703 Aggressive Top & Limb 29 87 324 71 111 240 468 357 117 464 207 239 157 189 22 466 161 108 547 2 51 40 12 4,469 Total 973 2,911 10,881 2,394 3,744 8,063 15,736 12,000 3,935 15,594 6,956 8,018 5,274 6,367 737 15,654 5,398 3,623 18,378 78 1,702 1,336 420 150,172
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Figure 17.
Moderate Model Run A moderate assessment of the net amount of low-grade wood available from accessible and actively managed forestland was 70,276 green tons per year. The largest variables were the percentages of the accessible forestland that is actively managed (by ownership class), the portion of inventory that is low-grade and appropriate for wood fuel harvesting, and the average rate of growth. The chart shown here gives the results of the moderate run. While this is the most accurate depiction of wood supply at present, it is based on analysis that can vary dramatically with small changes of key variables. For this reason, the study team chose to test the models sensitivity to relatively minor changes in the key variables.
Conservative Model Run This model run explores what happens if fewer forest landowners manage their forestland, if fewer trees are suitable for fuel harvest, and if the average rate of growth slows. A conservative estimate of the net amount of low-grade wood available on accessible and actively managed forestland within Addison County was 33,429 green tons per year, as shown in the table above. Aggressive Model Run This model run explores the results of a larger percentage of forest landowners managing their woodlots, more wood inventory that is suitable for wood fuel (including some top and limb wood), and faster average rate of forest growth. These conditions would yield 150,172 green tons per year from accessible and actively managed forestland in Addison County.
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Existing Demands for Low-grade Wood. The town level numbers presented above do not account for removals. Harvesting information is only gathered at the county level; therefore the net amount of low-grade wood remaining after removals are accounted for can only be calculated at the county level and not at the town level. Forest inventory and growth data can be applied at the town level using county wide per acre averages, but harvesting data cannot be applied using per acre averages. The section below explores the current market demand for low-grade wood from Addison County. Historically, there have been three main markets for low-grade wood: rewood, pulp, and biomass. Both rewood and pulp markets consume mostly low-grade bole wood, whereas biomass markets often consume just top and limb wood, but in some cases they utilize entire chipped trees. More recently, two more markets have emerged in addition to rewood, pulp, and biomass: The seasonal chip heating market has grown dramatically over the past few years and pellet manufacturing will soon be a signicant market for low-grade wood. Firewood Residential rewood accounts for a large majority of low-grade wood demand in the region. Given the current high cost of heating oil, Vermont has seen a dramatic increase in demand for cordwood for home heating over the past ve years. Current estimates of rewood use and harvesting in Vermont are 300,000 cords or 700,000 green tons annually. Pulpwood Pulpwood demand and harvesting in Vermont has gradually declined over the past decade, although there are still several large pulpmills in eastern New York, southern Quebec and northwestern Maine that still draw upon Vermont for their wood supply. Although pulp volumes have declined, current prices paid by the pulpmills have increased dra-
matically in the past 12 months. In 2004, over 650,000 green tons of pulpwood were harvested and exported to the regional pulpmills. Just two years later only 250,000 greens tons of pulpwood were harvesteda 62 percent reduction. Biomass Power Plants Both of Vermonts wood-red power plants, McNeil Station in Burlington and Ryegate Power Station in Ryegate, consume large amounts of harvested wood in the form of whole-tree chips. Tops and limbs left over from mechanized wholetree timber harvests are also chipped into fuel. International Paper and Finch Paper also consume whole-tree chips as boiler fuel in addition to the pulpwood and pulp chips they consume for making paper. Over the past several years nearly 200,000 green tons of low-grade wood from whole-tree harvesting in Vermont has been chipped for power plant fuel each year. Due to their locations, both Ryegate and McNeil Station source signicant portions of their wood fuel from adjoining New York and New Hampshire. Institutional Chip Heating Market Woodchip heating for schools and institutions has grown steadily over the past two decades in Vermont. In the past two years this growth has increased dramatically with several more schools and two college campus installations. Initially, nearly all woodchip heating systems sourced their chip fuel directly from sawmills as a by-product material; however as sawmill activity has slowly declined and demand for chip fuel has increased (as was described in the previous section on wood residues), a larger percentage of chip systems now source their fuel from chipped pulpwood as a commodity. In the past two years the combined chip heating market has grown from consuming approximately 25,000 tons annually to over 50,000 tons. The recently installed woodchip
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system at Middlebury College accounts for a large portion of this recent growth. This demand will continue to grow and there are currently several larger district heating projects proposed in Vermont. Pellet Manufacturing While there currently are no operational pellet mills in Vermont and few in the surrounding states, there are numerous proposals for pellet mills to be built in Vermont, New York, and New Hampshire in the near future.10 If only a small portion of the proposed mills are built, they will constitute a signicant market for low-grade wood. Similar to the institutional chip heating market, pellet mills have transitioned from sourcing their ber from exclusively sawmill by-product to increasingly sourcing pulpwood that is then debarked, chipped, and re-ground to their specications onsite.
Net Available Wood Fiber. The next and nal step is to explore the capacity, if any, for further market demand from a pellet mill in Addison County. The previous step of this analysis showed there are 70,276 green tons (moderate assessment) of low-grade wood growing annually on forestland that is accessible and appropriate for harvest in Addison County. Data on existing harvest rates of low-grade wood being removed for rewood (estimated), pulp, and biomass (pulp and biomass amounts came from Vermont Department of Forests, Parks and Recreations Annual Harvest Reports) were subtracted from this net annual growth, giving the net available low-grade wood in Addison County. When the harvesting data gathered by the State of Vermont is examined (shown in Figure 18 below), it is clear that high-quality
Figure 18. Data on existing harvest rates of low-grade wood being removed for firewood, pulp, and biomass were accounted for in estimating the net amount of lowgrade wood that is available in Addison County.
10
There is one pellet mill in Clarendon,Vermont that expects to be producing 10,000 tons annually by Fall 2009.
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Figure 19.
timber products such as sawlogs and veneer account for the majority of harvested wood; however, the amounts have been gradually declining. Pulpwood saw a tremendous spike in 2000 and has since fallen to half its pre-1998 harvest levels. Whole-tree chips for biomass power have accounted for a very small amount of harvested wood over this time period. Unfortunately, the annual harvest data compiled by the State of Vermont does not include rewood harvesting because rewood is
frequently harvested under the radar by individuals. This type of harvesting activity is difcult to track using an annual survey. When the most recent data for rewood consumption in Vermont is reviewed it is clear that rewood accounts for a very signicant amount of the total demand. As Figure 19 above shows, rewood harvesting accounts for nearly 70 percent of all wood harvested in Addison County. It is important to note that at the time of this study the most recent 2008 data on rewood use in Vermont was not released and the estimates of rewood harvesting used here come from county level projections based on the original 1997 data.
Figure 20. Addison County Annual Supply and Demand of Low-grade Wood (green tons)
Net Annual Growth of Low-grade Wood (moderate estimate) Estimated Firewood Harvest11 Average Pulpwood Harvest12 Average Chipwood Harvest13 Estimated New Demand from Middlebury College14 Net Available Wood Fiber 70,276 (48,000) (2,500 ) (1,000) (2,000) 16,776
11 12 13 14
Based on 1997 Firewood Study data. Based on 4 year average of pulpwood harvest data for Addison County from Annual Harvest Report compiled by VT FPR. Based on 4 year average of chipwood harvest.
Assumes 50 mile procurement radius and 10 county supply area for Middlebury Collegetherefore, Addison County provides one tenth of its total annual requirement of 20,000 green tons.
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Figure 20 on the previous page shows the ten year averages for harvested wood in Addison County, including rewood, and how much low-grade wood is available for a potential pellet mill in Addison County. This quantity is based on the moderate estimation of net annual growth: 70,276 green tons per year.
Figure 21. Moderate Assessment of Regional Net Available Low-Grade Wood

County Addison Chittenden Rutland Total Amount in green tons/year 16,776 63,173 80,022 159,971
The net amount of wood ber available annually in Addison County (after accounting for growth and existing demand) is 16,776 green tons, as shown in the table above. This quantity is dependent on the size of the procurement area, which is in this case only Addison County. This is a theoretic boundary; in reality wood routinely moves between counties, states, and even countries. Harvested wood will go to where the logger can make top dollar.. If the wood ber procurement were conned to only Addison County the amount of ber available would dramatically limit the size of the pellet manufacturing facility. A small pellet mill producing 10,000 tons per year will require 20,000 tons of wood bertherefore Addison County has insufcient wood ber resources to support even the smallest size option of pellet mill. Further review of how agricultural bers could supplement the availability of wood ber is provided in the following section of this report. However, if a slightly larger wood ber procurement area were used (adding only Chittenden and Rutland Counties for example) a dramatically larger supply of wood ber would be available. The table below shows the net available low-grade wood within Addison County and two of its neighboring counties, Chittenden and Rutland, as a more plausible reality of wood ber procurement.
Despite being Vermonts most populated county, Chittenden County has abundant forestland. The average size forest parcel is somewhat smaller than the average size forest parcel in either Addison or Rutland County (and so harvesting may be less likely on these parcels, according to the relationship between parcel size and likelihood of harvest explained previously). But, there is still opportunity for southern and eastern Chittenden County to contribute wood ber to a pellet mill in Addison County. Slightly smaller than Windsor County, Rutland County is the second largest county in Vermont and has the second greatest amount of forestland. Expanding the wood ber procurement for a pellet mill located in Addison County to include Rutland County would greatly impact the size of pellet mill that could be viable by signicantly increasing the wood ber available to the mill. Based on the three county supply of nearly 160,000 green tons of wood ber a pellet mill of roughly 80,000 tons of output could be viable.
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5.3 RESOURCE COMPETITION FROM LARGE WOOD-CONSUMING FACILITIES If a pellet mill producing pellets from wood ber were established in Addison County, it would likely face competition from other established and future large-scale consumers of low-grade wood. Older facilities that have already paid down all debt service often are able to out-compete newer start up businesses that are laden with debt service on the large capital cost of their facility. The following section details the existing facilities that would have the greatest competitive impact. Burlington Electric Department (BED) Joseph McNeil Generation Station Burlington, Vermont This 50 megawatt power plant consumes approximately 400,000 green tons of wood per year. The power plant is owned by BED with minority ownership by several Vermont electric utilities. Due to the McNeil Stations proximity to downtown Burlington and Winooski, their plant is limited to receiving only 25 percent of their volume directly via tractor trailer trucks due to concerns about truck trafc from city residents. Therefore the remaining 75 percent of the wood fuel received by McNeil is transported to the facility via rail. The Swanton Rail Yard is BEDs only rail yard and it is located approximately 35 miles to the north of the power plant in Swanton, Vermont. The rail yard receives truck shipments of chips and re-loads these chips onto railcars for nal delivery to the McNeil Station. Ryegate Power Station East Ryegate, Vermont Ryegate Power located on the eastern border of Vermont, along the Connecticut River, is a 20 MW power plant owned and operated by Suez Energy. The power plant consumes approximately 250,000 green tons of wood fuel
annually. A majority of the woodchip fuel is whole-tree chips from commercial timber harvests. The rest of the material is mill residues and clean urban wood. Boralex Power Station Chateauguay, New York The Boralex power plant is a 20 MW plant that consumes approximately 225,000 green tons annually. International Paper (IP) Company Ticonderoga, New York IP Ticonderoga is a large pulp and paper mill that consumes raw wood ber for pulping and boiler fuel. It consumes an estimated 700,000 green tons of wood annually. A majority of the wood ber used at this facility comes as pulpgrade roundwood. Finch Paper Glens Falls, New York Finch Paper, formerly Finch Pryun, owns and operates a pulp and paper mill in Glens Falls, New York. This mill consumes raw wood ber for pulping and boiler fuel. They consume an estimated 500,000 tons annually. Middlebury College Middlebury, Vermont At the end of 2008, Middlebury College completed the installation of a large woodchipred boiler at the campuss central steam plant in effort to replace one million gallons (or 50 percent) of the colleges oil use for heating and powering their campus. This new wood combustion system will consume an estimated 20,000 green tons annually when running at full capacity. The college has announced its intent to draw 100 percent of its wood fuel from within a 75-mile radius.
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Others In addition to the competitors listed above there are pulpmills and pellet mills scattered throughout the northeastern US and southern Quebec. Under current market conditions these competitors do not directly impact the potential supply of low-grade wood in Addison County, but should market conditions change and procurement ranges expand, greater competition for wood resources could occur. 5.4 WOOD PROCUREMENT STRATEGIES FOR A PELLET MILL Harvested wood ber for a pellet mill can be transported from the forest to the facility as either chips or roundwood. When a pellet mill is planned, a decision must be made early in the planning process whether the mill intends to receive a majority of its supply as chips or roundwood, since the type of feedstock will dictate the equipment that is installed. Facilities receiving roundwood need additional wood handling equipment. 5.4.1 Roundwood. One of the major advantages of procuring wood ber as roundwood is the storage shelf-life. Roundwood can be stored outside without absorbing water from the elements, while also not being as susceptible to decomposition as chip piles are. This longer shelf-life allows facilities to build large wood inventories when harvesting conditions are good, protecting the business from running out of inventory during periods of wet and muddy conditions when harvesting has ceased. For roundwood, International Paper Company in Ticonderoga, NY would be the pellet mills biggest competitor. When sourcing material from Vermont, the pellet mill would have to rely on the cost advantage for avoided hauling costs to convince loggers and truckers to deliver to the pellet mill instead of driving to Ticonderoga, New York.
5.4.2 Chipped Wood. Typical chipping operations in Vermont are chipping for the electric-generating market where little attention to chip quality is needed and a wide variety of low-grade wood can be fed to the chipper. Typical whole-tree chips can be used for pellet fuel production but tend to produce a higher ash content pellet. A possible strategy is to utilize a ail-debarking chipper instead of a typical whole-tree chipper to improve chip quality for pellet feedstocks. 5.4.3 Recommended Strategies. For security and longer term on-site storage it is recommended that the majority of sourced wood ber be roundwood (rather than chips) that would be chipped on-site as needed by hired chipping contractors. If for some reason on-site chipping is not an option (due to local permitting), whole-tree chips and bole chips can be sourced instead. 5.5 WOOD FIBER PRICING In the Northeast, biomass (or low-grade wood, in this case) as a by-product is well spoken for and transitioning from a waste-stream product to a commodity. Due to the overall lack of available clean chips and sawdust, the focus of the pricing section is specic to the purchase of low-grade roundwood or pulpwood that would be delivered to the facility, stored, and eventually debarked and chipped before entering the pellet mill for further processing. The price of wood is affected by numerous factors, but the primary ones are: Wood source and production costs. This varies widely depending on whether the wood is a by-product of some more lucrative activity. Strength of the sawlog market. Higher prices paid for sawlogs can help lower prices for pulpwood and chips.
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Figure 22. Itemized Production Cost of Low-Grade Roundwood

Cost Range Stumpage Cost to fell, skid, and process at landing Cost to haul to mill Total Cost $0.50 - $5.00/green ton $15.00 - $25.00/green ton $5.00 - $20.00/green ton $20.00 - $50.00/green ton Average Cost $4.50 $17.00 $10.00 $31.50
Regional balance of supply and demand for low-grade wood. Trucking distance from point of generation to end market. The cost of trucking is discussed in greater detail in the section below. In short, the price paid per ton of feedstock is dependent heavily on the cost to transport the material; this cost rises with higher diesel prices and with greater trucking distances.
Over the past 20 years, woodchip and pulpwood prices have increased at approximately one percent annuallywell under the general rate of ination. This is due to the fact that woodchips and, to a certain extent, pulpwood have historically been a by-product or secondary product of other primary activities like sawlog harvesting and lumber production. Looking forward, woodchip prices are expected to increase, on average at 3.25 percent annually, or matching the rate of general ination. An important consideration in sourcing wood from outside of the procurement area considered here is the increase in price that will come from trucking the material further distances. When wood (or agricultural) bers are transported over greater distances, not only does the cost per ton paid by the pellet mill increase, but the energy requirements also increase. The hauling costs presented in the table above are based on the core assumption that the majority of material would be transported less than 35 miles. In theory, for every mile wood is transported, the delivered price to the receiving facility increases. At todays diesel
Figure 22 above gives both an itemized range and average costs for low-grade wood15. It uses approximate costs (as the costs to harvest, process, and haul pulpwood changes from harvest job to harvest job and depends widely on dozens of variables such as volumes harvested, layout of skidding roads, skid distances, equipment used, topography, distance to the mill, etc.). It also assumes the pulpwood is harvested as part of an integrated harvest where some sawlogs are removed at the same time. If pulpwood were harvested without any sawlogs, the costs presented in the table above would be higher, since the economic gains from harvesting sawlogs can help to subsidize the cost of removing low-grade wood.
15
Some prot margin has been factored into the costs presented for the landowner, logger, and trucker.
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Figure 23. Transport Cost Sensitivity to Diesel Fuel Price and Haul Distance
Transport Cost Sensitivity to Diesel Fuel Price Price of Diesel Fuel ($/gallon) Labor Cost Trucking overhead Hourly Cost of Transportation Average Haul Distance (miles) Average Speed (MPH) Average Transport Time One Way (hours) Average Load and Unload Time (hours) Average Load Size (green tons) Average Transport Cost per Green Ton $2.50 $18.00 $20.00 $100.50 35 40 $3.00 $18.00 $20.00 $113.00 35 40 $3.50 $18.00 $20.00 $125.50 35 40 $4.00 $18.00 $20.00 $138.00 35 40 $4.50 $18.00 $20.00 $150.50 35 40
0.875
0.875
0.875
0.875
0.875
1 25
1 25
1 25
1 25
1 25
$11.06
$12.43
$13.81
$15.18
$16.56
Transport Cost Sensitivity to Transport Distance Price of Diesel Fuel ($/gallon) Labor Cost Trucking overhead Hourly Cost of Transportation Average Haul Distance (miles) Average Speed (MPH) Average Transport Time One Way (hours) Average Load and Unload Time (hours) Average Load Size (green tons) Average Transport Cost per Green Ton $2.50 $18.00 $20.00 $100.50 35 40 $2.50 $18.00 $20.00 $100.50 45 40 $2.50 $18.00 $20.00 $100.50 55 40 $2.50 $18.00 $20.00 $100.50 65 40 $2.50 $18.00 $20.00 $100.50 75 40
0.875
1.125
1.375
1.625
1.875
1 25
1 25
1 25
1 25
1 25
$11.06
$13.07
$15.08
$17.09
$19.10
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Figure 24 (top). There is a positive correlation between the price of diesel fuel and the average transportation cost per green ton of wood. Figure 25 (bottom). Similarly, average transportation costs (per ton of wood) increase with increasing haul distances.
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fuel prices, transporting 22 to 28 ton loads (a trailer load) of roundwood or woodchips costs between $2.50 and $3.00 per mile. More detailed presentation on the cost of transporting material distances greater than 35 miles is given in the table and graphs below. Figure 24 on the previous page shows the positive correlation between the price of diesel fuel and the cost to transport a green ton of wood: As diesel fuel prices escalate, the cost to transport the material will also increase. Similarly, there is a positive correlation between the haul distance and the cost to transport a green ton of wood. As Figure 25 on the previous page shows, longer trucking distances will only slightly increase the purchase cost of the wood ber. Typically, it is advisable to keep trucking distances to a minimum, but $5 more per green ton for wood hauled an extra 15 to 20 miles is a small price to pay for greater assurance of sufcient supply. In the case of a pellet mill for Addison County, the benets of securing additional wood from Chittenden and Rutland County to supplement those secured from Addison County far outweigh the few extra dollars paid per ton for slightly longer haul distances. 5.6 WOOD FIBER ASSESSMENT CONCLUSIONS All signicant volumes of desirable wood residues such as sawdust and mill chips are utilized by other markets, and targeting sawdust for a pellet mill would negatively impact bedding prices paid by farmers, hurting other parts of Addison Countys economy. Additionally, clean community wood waste is not a recommended feedstock. Since residue materials are largely unavailable for a pellet mill in Addison County, harvested wood will likely account for nearly all wood ber sourced by a pellet mill. Reliable local markets for low-grade wood can
bolster the local forest products industry and enhance the growth of the higher-quality trees for future harvest. Addison County has a signicant amount of forestland, with nearly 45 percent of the county being forested. Of this, almost 70 percent of the countys forestland was found to be accessible and ecologically appropriate for harvesting. An assessment was conducted using moderate assumptions for the portion of this forestland that is actively managed, the inventory of low-grade wood, and the average rate of growth. This analysis found that 70,267 green tons of low-grade wood would be available each year (the range could be as wide as 33,429 to 150,172 green tons) to be sustainably harvested from the accessible and managed portion of forestland in Addison County. Current harvesting to meet existing market demands signicantly impacts this allotment, virtually reducing this moderate gure to 16,776 green tons that are availablean amount insufcient to support a small pellet mill. However, when neighboring Chittenden and Rutland Counties are included, this amount increases to 159,971 green tons that would be available each year. Pricing of roundwood from within Addison County is estimated to cost $31.50 in the rst year, but major swings in sawlog and pulpwood markets and diesel fuel costs could impact this price. Additionally, while it is typically advisable to keep trucking distances to a minimum to prevent increasing prices for wood, the advantage of greater feedstock security from increased amounts of available wood from neighboring counties would far outweigh the relatively small increase in cost.
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6.0 Agricultural Fiber Assessment for Addison County

The natural occurring minerals in various biomass materials are what form ash when these materials are combusted. In many cases higher ash content is not the critical factorthe composition of minerals and to what extent these minerals fuse together to form clinkers during combustion is the major factor. During combustion, higher chlorine and potassium levels in grasses vaporize and form corrosive salts on the interior walls of an appliance. Clinker build up can make ash removal difcult, limit air ow and lower combustion efciency, and even cause fuel feeding jams. At present, the residential and small commercial heating markets do not use heating appliances capable of reliably burning pellets made from 100 percent agricultural bers. There is, however, strong interest in fuel pellets made from agricultural feedstocks and technology is constantly being researched and developed. As Addison County considers production of fuel pellets using locally-sourced feedstocks, agricultural residues and energy crops should be considered. Both sources of agricultural bers are examined below. 6.1 AGRICULTURAL RESIDUES Similar to the wood ber residues, limited options exist for pellet making from waste or residue material from agriculture. The section below reviews these materials, their sources, and the pros and cons of their use in pellet making.
There is potential to use agricultural fibers for pellet production in Addison County.
In addition to the forest ber potential discussed earlier, signicant potential exists for using agriculturally-derived bers for pellet fuel production. Grasses have 95 percent of the Btu value of wood and several pioneering companies, mostly in the mid-west, are beginning to produce grass pellets for heating. As with wood ber, there are two main categories of agricultural bers: residues (or ber produced as a by-product) and bers grown as energy crops. Since pellet heating systems such as stoves, furnaces, and boilers, are typically designed to burn wood pellets, simply substituting grass for wood in the same combustion system will generally not produce satisfactory results. Grasses have higher mineral content and a different chemical composition; therefore, distinct combustion systems are needed to handle these differences.
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6.1.1 Sources and Availability of Agricultural Residues. Many of the agricultural residues commonly found in other parts of the country are not typically generated here in Vermont. In many parts of the country there are harvestable residues left in the farm elds after the commodity food or feed crop has been harvested. Corn stover (stalks and leaves) and oatstraw are good examples. In Vermontand in Addison County the majority of crops grown are feed for dairy operations where the entire plant is harvested and fed to the animals. Even with oil seed crops, the resulting meal is very valuable as a feed material leaving little as a potential feedstock for pellet fuel making. Addison County has 80,608 acres of agricultural land in hay yielding 257,010 dry tons of hay annually16. In many years producing quality feed hay is difcult due to erratic weather conditions. Hay that does not meet feed quality, commonly referred to as waste hay, is a potential source of agricultural ber from which pellets could be made. This low-quality hay is frequently sold and used as mulch. The amount of waste hay produced annually in Addison County is extremely difcult to quantify because, in good years, nearly all hay harvested is high quality and therefore little waste hay is produced, while in wet summers more waste hay is produced. 6.2 DEDICATED ENERGY CROPS Unlike by-product supply of agricultural bers which are very nite, increasing amounts of dedicated energy crops can be grown to meet the market needs, so this study included developing a model to explore both the maximum resource capacity and the moderate yield that would be more likely. In a similar way to the
wood ber assessment described above, this study considered the potential for and annual availability of dedicated energy crops. Numerous types of dedicated crops exist and they are grown purposefully for various energy markets. Oil crops, such as rapeseed, sunower, and soybean can be grown, harvested, and pressed to extract the oil that is then converted into fuel. Small amounts of oil seed crops are already being grown throughout Vermont, however the feed value of the resulting meal (left over plant bers after the oil has been extracted) well exceeds its value as a feedstock for fuel pellets. For this reason, this analysis focused only on ber crops, and not oil crops, as a possible feedstock for making pellet fuel. 6.2.1 Grasses. No one grass species can be grown effectively in all regions and climates; however, the most broadly-considered grasses for energy production are: Switchgrass (and other native prairie grasses such as Big Bluestem and Prairie Cord grass); Miscanthus, a hybrid high-yielding crop that has garnered much interest; and Reed Canarygrass, an important forage grass in Vermont that is high-yielding and grows well in wet, marginal areas, but that is also recognized as potentially invasive, competing with other native wetland species, making its use as an energy crop more contentious. Each species has its own benets and drawbacks as a biomass fuel source. There are other potential grasses as well, all of which need further evaluation. When deciding which species of grass is the best choice for pellets, the rst consideration is generally the yield per acre in any given microclimate or soil type, as this greatly inuences the economics of conversion of the crop to a useful form for energy extraction.
16
USDA 2002 Census of Agriculture.
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Another consideration is the mineral, and therefore ash, content of a given grass on a given plot, which may affect the value of the crop as a densied fuel for thermal applications. Another consideration may be harvest windows as inuenced by local climates. What will the moisture content of the harvested grass be? Will this limit uses? Are there other users, birds for example, of the grass elds as it is growing and how do they shape options for harvesting? Switchgrass (Panicum virgatum) is native to the United States and is one of the best nonwoody energy crops because of its perennial growth habit, high yield potential on a wide variety of soil conditions and types, compatibility with conventional farming practices, and value in improving soil and water conservation and quality. This native, warm-season grass is widely adaptive once established; however, this species requires attentive weed control in the rst year of establishment so cool season grasses do not overwhelm it. Nitrogen fertilizer is not recommended in the rst year to reduce competition from grassy weeds. Switchgrass should be harvested once per year, generally after frost, using standard haying equipment. Grasses cut in the fall and left to over-winter are far lower in yield but have been shown to leach out potassium and chlorine, two minerals that may create issues during combustion. Reed Canarygrass (Phylaris arundinacea) is a perennial wetland grass, native to parts of the US, Europe, and Asia. It is a cool-season grass that is less productive than warm-season grasses. It is winter hardy so can be grown in colder climates and under shorter growing seasons; however, many ecologists and conservation departments consider it an invasive species because it frequently out competes and threatens natural wetland species.
In general, grasses grown for energy are managed for biomass yield rather than forage or nutritive quality. In fact, lower nutrient levels (nitrogen, sulfur, chlorine, etc.) may improve fuel quality and reduce emissions. As expected, the growth and yield of the grass crop is highly dependent on soil conditions, moisture, fertility, weed control, and timing of harvest. During the growing season, modest use of fertilizers may be needed to maintain soil fertility and improve crop yields. Careful attention must be paid to ensure that crops are not over-fertilized for risk of leaching surplus nutrients into ground and surface waterways. 6.2.2 Woody Plants (Energy Crops). Willow and poplar were reviewed and considered as potential energy crops for this study. Willow and poplar coppice have potential as dedicated energy crops, but were largely not included as part of the core analysis conducted for this study (with exception of the Aggressive model run). For one, these woody shrubs are intensive to grow and are expensive when all the costs of cultivation, fertilization, planting, weed control, and harvesting are factored in. Harvesting willow and poplar coppice also requires specialized harvest equipment that is not typically owned by farmers. Lastly, willow and poplar coppice are suitable for biomass fuel for large boiler systems but are not as attractive for pellet making due to the relatively high bark and foliage content in shrubby willows as compared the proportionally lower amount contained in larger diameter logs. Bark and foliage have dramatically higher ash content than white wood ber from the inside of tree stem.
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6.3 DEDICATED ENERGY CROP POTENTIAL Similarly to the wood ber assessment described previously, the total agricultural land footprint within Addison County was reduced to the existing and functional footprint of agricultural lands that could be converted to energy crops. This agricultural land area was categorized by its dominant agricultural use and further ltering was conducted to ensure prime agricultural land most suitable for food and feed production was not counted. The amount of agricultural residues and the potential amount of agricultural feedstock that could be grown within Addison County was quantied. This analysis focused on two grasses as energy crops (switchgrass and reed canarygrass) and, to a limited extent, willow. Best available information was used to determine growth rates for each crop and three scenarios compared different target acreages to be converted to these energy crops. The result was an estimation of the total amount of agricultural feedstock that could be grown for pellet production in Addison County. This process is outlined as follows.
1. Determine the total agricultural land area in Addison County at the town level. 2. Perform spatial analysis to lter out inaccessible and inappropriate agricultural land and categorize based on agricultural use. This was done sequentially so that areas were not double-counted if they fell within more than one inaccessible category. 3. Gather available information regarding agricultural residues. 4. Model the various scenarios for dedicated energy crop yields for Addison County at the town level. 5. Examine planting, cultivation, harvesting and transportation costs and market pricing for energy crops to estimate the ber prices to be expected by a pellet mill.
Switchgrass (Panicum virgatum) is native to the United States and is one of the best non-woody energy crops because of its perennial growth habit, high yield potential on a wide variety of soil conditions and types, compatibility with conventional farming practices, and value in improving soil and water conservation and quality.
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Figure 26 (opposite page).
6.3.1 Calculated Agricultural Area. The rst step toward determining the potential agriculture ber resource capacity is to determine how much agricultural land exists in the county and explore its current use. To do this, the Common Land Unit (CLU) spatial data layer, maintained by the USDA Farm Service Agency, was updated at the University of Vermonts Spatial Laboratory using 2003 imagery to show crop cover and pasture/suburban areas. The suburban lawns were removed and the crop and pasture feature classes were merged to create a single detailed agricultural layer. Of the total land area in Addison County (516,895 acres), approximately 26 percent or 133,946 acres is agricultural land. This GIS data layer categorizes the total agricultural land into ve main groups: corn, hay, pasture, urban pasture, and other. These categories approximate the total acreage that, at any given time, is in corn production, hay production, pasture use, idle urban pasture, or other. It is important to note that corn and hay are often rotated and to denitely categorize agricultural land as corn or hay seems to ignore the reality of typical crop rotations. However, the important point to consider here is that this information gives the user an approximate quantication of the amount of agricultural land that is in corn, hay, and so on at any given time. While this starting CLU data source accurately depicted the total agricultural land area, it constituted too broad a measure of the functional agricultural land area. This study ltered the base layer of agricultural lands in a similar way as the forested footprint (in ArcGIS) to account for the following factors: slope greater than 12 percent grade, wetlands (including 50 foot buffers),
streams (including 50 foot buffers), other designated habitat areas, roads (including 25 to 50 foot buffers) buildings and three acre buffers surrounding them, and other developed spaces such as driveways. Figure 26 on the following page shows, by town and by crop category, total starting agricultural land area, the amount of land ltered out by spatial analysis (by town only), and the remaining agricultural land that serves as the functioning agricultural footprint for this assessment. Using the lters described above, this analysis concluded the actual functioning footprint of agricultural land in Addison County is 98,626 acres, a 26.4 percent reduction from the starting 133,946 acres. As a comparison to the spatial analysis performed for this study, the 2007 Census of Agriculture reports that there are 102,629 acres of harvested agricultural land in Addison County.17 Figure 27 on page 43 shows total agricultural land area in Addison County and the portions ltered out using spatial analysis (in red). The agricultural area that is showing through represents the remaining agricultural land that serves as the functioning agricultural footprint for this assessment. (This is a spatial depiction of the same results shown in the table above.) A full-size version of this map is included as Appendix B of this report. Figure 28 on page 43 illustrates the makeup of the total starting and remaining functional agricultural land area in Addison County and its distribution between corn, hay, pasture, urban pasture and other.
17
Table 9 2007 Census of Agriculture County Data compiled by USDA, national Agricultural Statistics Service.
Total and Functional Agricultural Land (in acres)

Total Corn Total Functl Ag. Land 13,033 13,841 2,368 4,762 10,236 71 7 0 8 0 339 500 599 6,476 3,171 0 426 1,451 4,937 629 2,390 4,647 4,385 9,787 133,946 1,345 4,385 5,175 169,862 383 27 310 1,022 387 18,380 55 1,065 7,634 779 200 1,333 1,768 1,574 66,023 1,058 228 48 227 776 309 34 183 218 178 7,498 35 35 65 0 0 0 0 112 51 0 0 210 1 1,036 40 40 552 276 626 609 185 0 102 647 1 61 113 269 34 5,689 169 71 792 742 4,624 3,495 8,876 8,817 4,741 103 1,820 10,620 1,523 322 1,939 3,488 2,174 98,626 Total Hay Total Pasture Total Other Total Total Total Functl Urban Starting Filtered Corn Pasture Ag. Land 443 1,453 157 579 1,116 5 20 0 304 50 883 468 831 855 275 0 359 1,017 1 103 182 487 199 412 2,191 13,618 4,515 9,747 5,995 135 14,009 5,917 3,100 1,157 11,554 8,224 675 10,958 7,339 1,771 4,810 8,612 364 2,320 5,816 6,942 9,050 883 2,815 1,025 9,553 0 504 197 2,359 7,510 0 625 119 100 9,334 0 62 9 0 283 11,106 3 125 34 0 95 3,779 0 48 19 0 4 14,433 13,046 2,168 6,666 715 37 649 6,825 7,345 818 3,223 424 4 295 2,964 9,767 751 1,339 169 0 110 17,642 6,650 2,046 10,030 792 212 761 15,745 9,227 3,738 8,394 325 267 309 Functl Hay Functl Pasture Functl Other Functl Urban Pasture
Total Land Area 4,413 2,341 905 1,036 2,871 0 7 0 63 0 1,496 420 2,086 858 1,320 0 707 1,798 430 28 364 1,273 723 23,139 85,346 14,399 1,276 2,576 863 24 2,271 362 254 1,527 317 0 234 48 0 1,035 673 53 9,258 1,380 164 2,851 599 0 65 70 0 3,974 347 0 8,048 1,793 0 7,022 938 80 2,953 919 50 3,877 611 74 650 326 0 1,603 380 9 87 13 0 169 88 0 56 35 0 9,019 1,385 42 4,439 767 4 1,591 311 0 11,959 1,657 232 10,082 517 290
Addison
31,327
Bridport
29,642
Bristol
26,371
Cornwall
18,391
Ferrisburg
39,192
Goshen
13,275
Granville
32,625
Hancock
24,696
Leicester
13,882
Lincoln
29,312
Middlebury
25,403
Monkton
23,212
New Haven
26,560
Orwell
31,823
Panton
14,103
Ripton
31,599
Salisbury
19,262
Shoreham
29,521
Starksboro
29,155
Vergennes
1,621
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Waltham
5,910
Weybridge
11,243
Whiting
8,770
TOTAL
516,895
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6.3.2 Calculated Crop Yields. Once spatial analysis determined that the total functional agricultural footprint in Addison County is 98,626 acres (and the acres in each of the ve agricultural use categories), further assessment was needed of the amount of agricultural land that could be used to grow some dedicated energy crops to supply a potential pellet mill. Due to the lack of available spatial data easily delineating prime agricultural land from the targeted marginal agricultural land for growing energy crops, BERC developed a model to calculate this crop yield potential using agricultural land area and crop yield data and several key assumptions as inputs. The model allows the user to test crop yield scenarios by exploring two main variables: the crops grown and the amount of each category of agricultural land to convert to dedicated energy crops. For this analysis, extremely small percentages of the functional agricultural land were targeted for dedicated energy crops due to the current lack of market demand for this type of crop and the desire to avoid planting energy crops where food and feed crops are needed.
Figure 27 (top). Figure 28 (bottom).
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Countless different model runs could be performed and numerous runs were, however for discussion purposes three main model runs will be presented: This report presents conservative, moderate, and aggressive estimates of the dedicated energy crop yield potential in Addison County. Each run assumed the same averaged growth rate for each crop; however, they differed in the amount of agricultural lands targeted, by agricultural land category and for each energy crop. The moderate assessment is likely to be the best depiction of reality, with the conservative and aggressive assessments serving as bookends of the possible range.
For the reasons detailed above, this analysis focused on the potential for perennial grasses, such as switch grass and reed canarygrass, and to a limited extent, woody plants like willow. To quantify the amount of each that can be grown annually in Addison County, per-acre yields and target acreages were assumed for each grass and energy crop. Figure 29 below shows the assumptions used in each run of the analysis. Since the moderate assessment is likely to best reect reality, these assumptions are shown in a darker font for emphasis.
Figure 29. Key Assumption Inputs Used in Three Agricultural Fiber Yield Model Runs
Conservative
Moderate
Aggressive
Perennial Grasses Target Corn Acreage for Perennial Grass Target Hay Acreage for Perennial Grass Target Pasture Acreage for Perennial Grass Target Other Acreage for Perennial Grass Target Urban Pasture for Perennial Grass Perennial Grass Averaged Yield per acre (DT) Moisture Content of Harvested Grass Willow Coppice Target Corn Acreage for Willow Target Hay Acreage for Willow Target Pasture Acreage for Willow Target Other Acreage for Willow Target Urban Pasture for Willow Willow Averaged Yield per acre (DT) 0% 0% 0% 0% 0% 3.00 0% 0% 0% 0% 0% 3.00 0% 10% 10% 0% 2% 3.00 0% 2% 2% 0% 2% 2.79 15% 0% 5% 5% 0% 5% 2.79 15% 5% 10% 15% 0% 20% 2.79 15%
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Figure 30. Projected Annual Dedicated Energy Fiber Crop Yield (green tons)
Conservative Perennial Grass Yield Addison Bridport Bristol Cornwall Ferrisburg Goshen Granville Hancock Leicester Lincoln Middlebury Monkton New Haven Orwell Panton Ripton Salisbury Shoreham Starksboro Vergennes Waltham Weybridge Whiting TOTAL 604.55 775.60 108.29 263.87 537.72 4.75 11.08 4.76 52.49 49.66 248.16 207.33 471.47 545.20 239.95 6.90 93.34 606.44 72.90 19.77 109.08 151.023 119.55 5,303 Moderate Perennial Grass Yield 1,511.37 1,938.99 270.72 659.67 1,344.29 11.88 27.69 11.90 131.23 124.14 620.39 518.33 1,178.67 1,363.00 599.86 17.25 233.36 1,516.09 182.25 49.43 272.71 77.56 298.88 13,259 Aggressive Yield (Perennial Grass and Willow) 7,362.77 9,052.49 1,351.57 3,126.26 6,430.59 55.72 128.67 54.05 600.35 582.08 2,952.26 2,438.26 5,612.43 6,320.24 2,884.87 84.29 1,141.64 7,079.89 921.31 229.27 1,288.81 1,879.08 1,415.82 62,992
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Using the data assembled and the key assumptions listed above, the three model runs yielded the results in Figure 30 on the previous page. Again, the results of the moderate assessment are shown in a darker font for emphasis. The agricultural ber yield capacity for Addison County (13,259,050 green tons per year according to the moderate assessment shown above) nearly matches that of the wood ber capacity in Addison County. However, if more agricultural land were cropped with dedicated energy crops such as grasses the capacity would far exceed the capacity of further wood ber. This is due to the fact that agricultural systems are capable of producing dramatically higher yields per acre per year (2 to 10 dry tons) than forests that are harvested on a sustainedyield basis (0.25 to 1.0 dry tons of net annual growth) and the fact that Addison County is the least forested county in all of Vermont. Even the model runs tested above, which targeted very small percentages of the total agricultural land area, yielded volumes equal to the forest ber yields after current wood ber demand was accounted for. Despite the potential for more ber from agricultural source than from wood, a pellet mill is unlikely to consume bers based on availability alone. Pellet mill businesses must also factor the price of the different ber sources and market demands in terms of the pellet fuel quality: Do pellet buyers want industrial grade pellets with high ash content or do they demand premium pellets with the least possible amount of ash? While pellets containing a high percentage of grass bers could produce a pellet of Utility grade, there is currently no market for utility grade pellets in the northeastern United States.
6.4 AGRICULTURAL RESIDUE AND ENERGY CROP PRICING To determine the likely costs of both waste hay and dedicate energy crops such as perennial grass typical market prices for a range of hay quality were examined. Figure 31 below shows both the typical cost per bale and the cost per green ton for various grades of hay quality in Vermont. As Figure 31 illustrates, the cost per ton for mulch hay ranges in the $75 to $100 per ton price range. If waste hay were to be used for pellet making it would need to pay as much as mulch hay markets. Figure 31 reects the market typical market prices of hay, but it is also important to better understand the cost to actually produce the grass ber. There is a lack of solid information pin-pointing the production costs of dedicated energy costs and the information that is available presents a wide range of costs depending on what specically is included. Several sources for determining grass ber prices were examined and Figure 32 on the following page was crafted in summary.
Figure 31.
Market Prices for Hay

Type of Hay High-quality Feed Hay (small square bale) High-quality Feed Hay (round bale) Low-quality Feed Hay (small square bale) Low-quality Feed Hay (round bale) Mulch Hay (small square bale) Mulch Hay (round bale) Price per Bale $5 $50 $3.50 $40 $2.50 $30 Approximate $/ton18 $200 $125 $140 $100 $100 $75
18
Assumes the average weight of a small square bale is 50 pounds and the average weight of a round bale is 800. 18 Assumes the average weight of a small square bale is 50 pounds and the average weight of a round bale is 800.
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Costs to Produce Hay19

Cost Range (ton) Land use Cost to cultivate, plant, cut, ted, rake, and bail Cost to haul to mill Total cost $0 - $20 $10 - $60 $2 - 20 $50 - $100 Avg. Cost (ton) $12 $57 $10 $79/ton
small percentage of total agricultural lands in Addison County. It found that the agricultural yield capacity far exceeds the wood ber capacity for Addison County.
Figure 32.
UVM Extension Professor, Dr. Sid Bosworth, recently analyzed the yields and costs to produce grass for energy in Vermont and concluded that it costs approximately $249 per acre and, at an average yield of eight 900-pound round bales per acre (3.6 tons), roughly $69 per ton without transport. When transport costs (often using smaller trucks with smaller payload capacity) of round bales from all over Addison County are factored, the estimated price per ton is $79. 6.5 AGRICULTURAL FIBER ASSESSMENT CONCLUSIONS It is possible to produce pellets using natural bers other than wood. Addison County is rich in agricultural land suitable for growing grasses and dedicated energy crops that could be used as feedstock for making fuel pellets. Nearly 26 percent of the county is agricultural land and about 74 percent of this was found to be accessible and functional after GIS ltering for physical limiting factors. A moderate assessment of the yield capacity of energy grasses was 13,259 tons per year, though sensitivity analysis showed this capacity could be as little as 5,303 tons of grasses per year or as much as 62,992 tons of grasses and willow. The agricultural lands targeted for growing energy crops in this assessment are a very
There are signicant efforts underway to build a grass pellet industry especially in the mid-western US where forest resources are limited. However, pellet fuel made exclusively from wood ber dominates the US pellet fuel market and the residential and small commercial heating markets do not currently use heating appliances capable of reliably and conveniently burning pellets made from 100 percent agricultural bers. While pellets containing a high percentage of grass bers could produce a pellet of utility grade, there is current no market for utility grade pellets in the northeastern US. Additionally, grass ber for pellet making is likely to cost over 50 percent more than wood bers produced from roundwood20. As was shown above, grass ber would likely cost $79 per ton as compared to $31.50 per ton for roundwood. Grass ber also has as much as 12 times more ash content than wood ber. These two major factors are signicant limitations of the viability of a pellet mill business model with a strong emphasis on grass ber as a feedstock. To develop a successful business plan, the pellet mill owner will likely emphasize producing pellets that meet the needs of the existing market and have the greatest potential to expand and grow the pellet heating market. At this time, that product is wood pellets. Further ongoing research and development of pelletized grass is important should the market needs, combustion technology, and costs of wood ber dramatically change in the future.
19 20
Based on analysis by Dr. Sid Bosworth, Grass Energy in Vermont PowerPoint Presentation, 2009. Even after differences in moisture content of grass and wood are accounted for.
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7.0 Potential Pellet Mill Site Identication

A pellet mill is very similar in nature and operations to a sawmillraw wood is delivered and stored at the facility, large pieces of wood are made into smaller pieces, wood is dried to add value, and nished, value-added product is shipped out to various markets. Understanding the options that exist for siting a pellet mill constitutes an extremely important piece of determining the overall feasibility of a pellet mill in Addison County. This section of the report identies possible sites throughout Addison County that could serve as possible pellet mill locations. The sites identied and reviewed in this report are not a denitive list and other possible sites may have been missed or intentionally excluded because the sites owner did not wish their site to be listed in the report. 7.1 PRELIMINARY SITE IDENTIFICATION CRITERIA The study identied areas within Addison County that are zoned commercial and industrial and are greater than ve acres. Those near to the center of Addison County received priority for good overall access to all 23 towns within the county. Criteria for site selection included: Industrial or equivalent commercial zoning (pellet making at the commercial scale requires appropriate locations intended for industrial activities) Parcel size greater than ve acres (between the buildings and the area needed to store raw wood ve acres is the minimum land requirement) Potential for truck access (a small pellet mill requires on average 20 tractor trailer loads of wood delivered each week) Proximity to three-phase electric (pellet mills use large amounts of electricity and require three phase) Distance to rail-spur (while not essential access to rail lines provide a pellet business greater exibility for importation of bers or export of nished pellets) Proximity to residential areas (pellet mills can produce noise and dust from truck trafc, bucket loaders, and outdoor debarking and chipping of roundwood) Overall compatibility with current or historic use (pellet mills can t better at sites where there is established activity similar to the nature of a pellet mill) Landowner interest and willingness to be considered as a potential site (for all the potential sites listed in this report permission from the current landowner was secured) Figure 33 on the following page shows the areas in Addison County that are zoned commercial and industrial and that are greater than ve acres. The digital zoning maps for each town in Addison County (with the exception of Hancock and Granville) were compiled and their zoning codes were reviewed to identify a common industrial zoning category. Additional GIS data layers (proxy data layers to estimate three phase power line locations) were also used. This GIS analysis served as the basis for the preliminary identication of dozens of possible pellet mill sites. A full size map is included at the end of this report as Appendix C.
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It should be noted that both the towns of Hancock and Granville do not have local zoning and therefore did not mesh with our methodology. While our methods led us to focus on the other towns of Addison County, it should be noted that both Hancock and Granville could potentially host a pellet mill. In addition, the study included a review of commercial and industrial zoned buildings and properties listed by commercial real estate agents. BERC and the steering committee reviewed numerous vacant facilities, but very few met the needs of a pellet fuel manufacturing business. 7.2 SELECTED SITES AND OVERALL SUITABILITY FOR BIO-FIBER FUEL PRODUCTION 7.2.1 Preliminary Site Selection. Examining the details of each of the sites identied allowed the study team to create a shorter preliminary list of eleven possible sites as potential locations for a pellet fuel production facility based on their size and Preliminary List of Selected Sites for a Pellet Manufacturing Facility suitability using the criTown Location Property Owner Current Use teria mentioned above. Middlebury Middlebury Industrial Park site `Middlebury College Open Land Figure 34 lists these near end of Industrial Ave sites. Additionally, the Vermont Natural Ag Products Foster Brothers Farm Open Land following sections give OMYA Quarry more detailed discussion Bristol Claire Lathrop Sawmill Jim Lathrop Wood fuel on select sites where the processing yard landowner expressed A Johnson Company Johnson Family Sawmill interest in their land White Pigment Mill Phoenix Feed Storage & grain being listed as a possible Phoenix Feed Mill mill location.
Shoreham Shoreham Coop Barney Hodges (now Sunrise Orchards) center Idle apple packing & distribution
Granville Hancock
Granville Manufacturing/Bowl Mill Vermont Plywood
Jeff Fuller VEDA
Clapboard & Bowl Mill Former Plywood Mill
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7.2.2 Detailed Site Review. BERC visited the locations discussed below and spoke with landowners to assess suitability for and gauge interest in developing or co-locating a pellet mill at each site. The following section provides an in-depth discussion of the top ve sites identied and their relative strengths and weaknesses as a potential site for a pellet mill. Full-page versions of the maps shown here are included as Appendices D-H at the end of this report. Middlebury Industrial Park There are several possible sites for a small pellet mill located within the Middlebury Industrial Park (MIP). There are two main parcels from the currently permitted Phase I build out of the Industrial Park that are for sale. These are: 1. Redstone 10-acre parcel on Pond Lane, listed for $240,00021 2. Middlebury College Lot #4 -5.1-acre parcel listed for $142,30022 These two sites are both open, undeveloped land and are located on relatively level ground. There is sufcient space for truck access, wood receiving and storage, wood pre-processing, and the building to house the mill itself, assuming it is a small pellet mill. In addition to these two sites within the existing phase I development of the industrial park, there are several more parcels further to the North that could become available in the future should access and permitting be pursued as part of the phase II development of the MIP.
These sites are located near a rail line but there is no current spur to the parcels. These sites have immediate access to three-phase electric lines. The sites are surrounded by other industrial and commercial activities and are far removed from the nearest residential area. These sites are ideal for new construction of a small to medium sized pellet mill (three to six tons per hour) but would be a comparatively expensive option for a developer to pursue compared to locating a site with existing buildings and developed infrastructure.
Figure 33 (opposite page top). Figure 34 (opposite page bottom). Figure 35 (above).
21 22
Personal communication , Duncan Harris, Redstone Real Estate. Personal communication, Thomas Corbin, Middlebury College.
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Vermont Natural Ag Products - OMYA Quarry The Foster Brothers Farm located on Lower Foot Street in Middlebury operates a largescale manure composting operation on its property. There is an area of land to the east of the main composting facility that would be an ideal location for a pellet mill. This land is currently used as corn and hay eld, but given its proximity to both the composting operation and the OMYA quarry to the northeast, it well positioned logistically for locating a pellet mill. The land is currently zoned as agricultural and this site could only be viable if the Town of Middlebury made a zoning classication change. This site has access to three-phase power and truck access is good. One added possible benet is that the planned rail spur to the OMYA quarry is to be routed through this area. Should a pellet mill be located at this site, access to the rail line could prove advantageous to a pellet mill for two main reasons: opportunity to draw in bers and distribution of nished product via rail. This site could likely accommodate a large pellet mill (upward of 12 tons per hour capacity) given the amount of space.23
Figure 36.
23
Further detailed, site-specic analysis would be necessary to fully determine the maximum sized pellet mill that could be located at this site.
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Claire Lathrop Former Sawmill Located in the center of Bristol is a former sawmill site owned by James Lathrop. This site is 12.37 acres and is located off South Street. The sawmill, which was founded in 1878 and operated by several generations of the Lathrop family, closed its operations in 2006 and sold off much of the sawmill processing equipment. Although the Lathrop family closed the sawmill operation, they continue to use the site and several of the buildings for logging equipment maintenance, low-grade roundwood storage, and wood fuel processing. Today, Lathrop Forest Products processes fuel chips for electric power plants and services dozens of institutional heating systems with more specialized bole chips. Lathrop Forest Products also processes and sells rewood to the home heating market. While there is currently and has historically been a steady stream of truck trafc delivering raw wood and trucks distributing processed wood, the access to the site is through a residential area. The site has no rail access but does have three-phase electric access. Distances to nearest residential neighbors are quite close, but current operations generate similar amounts of noise and dust from trucks and heavy-duty chipping and processing equipment. This site is located in a mixed use zoned area of town that allows light manufacturing rather than an Industrial zone. However, given the similarity of the nature of the current and historical use it is possible a local zoning conditional use exemption could be secured for a pellet mill at this location. It is possible to accommodate a small to medium sized pellet mill at this location (3 to 6 tons per hour capacity).24
Figure 37.
24
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A Johnson Company The A Johnson Company owns and operates a large sawmill on the south end of Bristol located off Route 116. This sawmill has been operating at its current location since 1937. The sawmill operation is located on 58.57 acres of industrially zoned land. The sawmill currently occupies a majority of the lot, but according to Dave Johnson, a small- to mediumsized pellet mill operation could be located (with some rearranging of their yard) in the southwest corner of the site. This site has excellent truck access directly off Route 116. There is no rail access. The sawmill has three-phase power. Nearest neighbors are set back a few hundred yards. It is possible a small to medium pellet mill (3 to 6 tons per hour capacity) could be located at the A Johnson sawmill.25
Figure 38.
25
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White Pigment Mill Phoenix Feed Mill In the town of New Haven, near the intersection of Route 7 and Route 17 is an existing industrial facility located on 25 acres between Route 7 and the Vermont Railways rail line. This facility was originally used for processing and shipping white pigment products from limestone. Several years ago a locally-owned company, Phoenix Feeds, purchased the idle facility from Vermont Railway and began operating a grain and feed supply business that imports bulk grain by rail and distributes to local farmers via trucks. Truck access to the site is excellentdirectly off Route 7 into the yard. The site also currently has rail ofoading capabilities and railcar loading for possible product distribution is possible. The current feed operation only occupies one of the existing three buildings, the largest of which is 15,000 square feet. The current owner, Craig Newton, has expressed interest in possible new opportunities and stated he felt pellet production or pellet importing was a compatible activity with the current use. The site is serviced with three-phase power. There are several other businesses nearby: a construction company, an auto dealership, and a gas station. While the site is highly visible from Route 7, a prime tourist travel corridor, there is an acceptable setback distance to the nearest residents. It is possible a small to medium pellet mill (3 to 6 tons per hour capacity) could be located at the Phoenix Feed Mill.26 In addition to the ve sites detailed above both the Granville Manufacturing site in Granville and the Former Vermont Plywood facility in Hancock are both potential sites on the far Eastern side of the county.
Figure 39.
26
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8.0 Pellet Fuel Market Assessment for Addison County

8.1 PRIMARY MARKETS FOR WOOD PELLETS There are two main markets for pellet fuel: residential and commercial. For the residential market, wood pellets are sold in 40-pound bags at farm or building supply stores. Small commercial- or institutional-scale applications require larger quantities of pellets because these facilities tend to be larger in size and have a higher heating load. For these applications, the 40-pound bag would be far too cumbersome and laborious; therefore, bulk delivery and on-site storage are essential for small-commercial or institutional pellet heating systems. With bulk delivery, the customer is charged per ton delivered, the price typically including a per-load fee scaled to the distance of the delivery. Addison County has several options to consider for the delivery of pellets from manufacturer to customer. For example, 40-pound bags can be sold directly from the manufacturer (customers may be given the option to pick up the fuel themselves, often saving the customer money) or bags can be sold through local retailers. For bulk quantities, pellets can be sold through a distributor or directly from the manufacturer, requiring the manufacturer to have an appropriately-sized delivery truck with fuel delivery systems. These options will impact the price to the customer for the material, and therefore can be an important factor in anticipating markets and the protability of the business model. The table below shows the price, from the customers perspective, of heating with wood pellets compared to heating with oil, propane, or cordwood on a per million Btu basis.
Figure 40. Comparison of Heating Fuel Costs

Fuel Type Unit Cost per Unit BTU per Unit (dry) Moisture Content Average Seasonal Efciency MMBTU per Unit After Combustion Cost per MMBtu After Combustion
Oil Propane Pellets Cordwood
gallon gallon ton cord
$2.65 $2.44 $280 $225
138,000 92,000 16,800,000 --
0% 0% 5% seasoned
75% 90% 85% 60%
0.104 0.083 13.6 13.2
$25.60 $29.47 $20.64 $17.05
* $280 per ton for pellets reects an average regional price at the mid-point between pricing for bulk pellets, which may be lower than $280 per ton, and pricing for bagged pellets, which may be closer to $290 per ton.
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$5.00 $4.75 $4.50 $4.25 $4.00 $3.75 $3.50 $3.25 $3.00 $2.75 $2.50 $2.25 $2.00 $1.75 $1.50
________________________________________________________________________________________ ________________________________________________________________________________________ ________________________________________________________________________________________ ________________________________________________________________________________________ ________________________________________________________________________________________ ________________________________________________________________________________________ ________________________________________________________________________________________ ________________________________________________________________________________________ ________________________________________________________________________________________ ________________________________________________________________________________________ ________________________________________________________________________________________ ________________________________________________________________________________________ ________________________________________________________________________________________ ________________________________________________________________________________________ ________________________________________________________________________________________
0 8 0 9 0 9 08 0 8 0 9 09 09 0 8 0 9 09 0 8 Fe b Ja n ug Ju n Ju l ov pr ec ay ar ct Se p ug 0 9
One-Year Price Trend
Fuel Oil Kerosene Propane Gasoline Diesel
A current regional average price for pellets was considered ($280 per ton), compared to current regional prices for the other fuels. As can be seen in the table shown here, cordwood is the least expensive fuel to heat with, costing $17.05 per million Btu produced (after combustion, or after factoring in the impact on cost from moisture content and average seasonal efciency of the heating equipment for each fuel). Propane, on the other hand, is the most expensive fuel to heat with at $29.47 per million Btu, followed by oil at $25.60 per million Btu. Wood pellets would save the average customer about $5 per million Btu compared to oil and about $9 per million Btu compared to propane. Careful consideration will need to be given to the impact on pellet pricing when developing a pellet fuel business plan. Pellet fuel prices must offer measurable cost savings over oil and propane if more pellet heat market growth is to occur. The chart below gives a one-year history of the falling price of traditional fossil heating fuels.
While this current trend is not great news for the pellet heating industry, a closer look at longer term price trends shows wood pellet prices typically escalate one or two points above general ination and the mean price of oil, for example, may escalate at a rate two to six points greater than general ination over time. If the longer term trend of escalating regional fossil heating fuel prices continues, pellets (still escalating at a slower rate) will likely become increasingly cost-competitive with other heating fuels (with the exception of cordwood, which has historically escalated at a rate lower than general ination). While the main target markets for pellet heating are propane and oil, there has been evidence of pellet heating appliances replacing rewood heating. It is important to note that the average customer will not likely save money by converting from heating with cordwood to heating with pellets. They will save time and effort due to the increased automation of pellet heating. So, in the case of potential pellet customers who are currently heating with cordwood, price may not be as much of a factor in a conversion to pellet heating.
Figure 41.
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8.2 RESIDENTIAL MARKET IN ADDISON COUNTY 8.2.1 Estimating Annual Pellet Demand for Residential Heating in Addison County. The rst step in estimating the potential residential heating market for wood pellets is to determine the current market demand for pellet fuels. The most recent census data (2000) showed that Addison County has a total of 13,068 households. If the average household is 2,000 square feet, then there is a total of 26,136,000 square feet of heated residential area in Addison County. Figure 42 on the following page shows the population, number of households, and estimated number of heated residential square feet in Addison County by town. The Vermont Department of Public Services Firewood Survey results (1997) showed that the primary heating fuels used in Addison County are oil (47 percent), propane (23 percent), and cordwood (18 percent). This means that approximately 12,283,920 square feet in Addison County are heated with oil, 6,011,280 square feet are heated with propane, and 4,704,480 square feet are heated with cordwood. There is extremely limited information available on the amount of pellet heating in the United States, in the State of Vermont, or in Addison County. However, a recent study conducted by Macro International for the State of Vermont concluded that 2.79 percent of Vermont homes are currently heated in full or in part by pellets. Therefore, the total annual pellet demand for residential heating currently is 2,313, tons of pellets. While this constitutes a healthy market, it is not sufcient to support a nancially viable pellet mill sized to the service Addison County alone.
There are, however, numerous indicators that pellet heating will continue its growth for the next several years, especially in the Northeastern US. Future demand for pellets is likely to grow. For one, the VDPS Firewood Survey Data (2009) reported that, of those respondents who indicated they were planning to install a wood heating system, over 28 percent said they were planning to install a pellet stove and another 4.4 percent said they were planning to install a central pellet furnace or boiler (the remainder were planning to install cordwood stoves, furnaces or boilers). In addition, national sales of pellet-fueled heating appliances (stoves, furnaces and boilers) have been growing dramatically over the past few years. According to the national trade association, Hearth, Patio, and Barbecue annual sales of wood pellet stoves in the US has increased by nearly 300 percent over the past ten years. Also, the American Recovery and Reinvestment Act of 2009 (ARRA) includes a tax credit for homeowners on energy improvements, including 30 percent (or up to $1,500) toward the purchase and installation of biomass heating appliances such as stoves and boilers through the end of 2010. All of these factors point to the potential for further market growth in pellet heating. Given the likely trend towards greater conversion to pellet heating, a basic analysis model was developed to determine how many tons of pellet fuel would be needed if the percentage of pellet heating in Addison County continued to grow in the future. Sensitivity analysis was conducted to estimate total annual pellet demand for three projected scenarios of further pellet heating market growthconservative, moderate, and aggressive.
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Figure 42. Census Data and Estimated Heated Residential Area for Addison County
Population Households Population/ household 2.82 2.71 2.59 2.66 2.62 2.70 2.39 2.33 2.49 2.63 3.08 2.74 2.72 2.69 2.75 2.65 2.58 2.70 2.84 2.80 2.69 2.56 2.45 2.66 Total Sq. Ft.27
Addison Bridport Bristol Cornwall Ferrisburg Goshen Granville Hancock Leicester Lincoln Middlebury Monkton New Haven Orwell Panton Ripton Salisbury Shoreham Starksboro Vergennes Waltham Weybridge Whiting TOTAL
1,393 1,235 3,788 1,136 2,657 227 303 382 974 1,214 8,183 1,759 1,666 1,185 682 556 1,090 1,222 1,898 2,741 479 824 380 35,974
494 456 1,460 427 1,014 84 127 164 391 462 2,657 642 613 441 248 210 423 453 668 979 178 322 155 13,068
988,000 912,000 2,920,000 854,000 2,028,000 168,000 254,000 328,000 782,000 924,000 5,314,000 1,284,000 1,226,000 882,000 496,000 420,000 846,000 906,000 1,336,000 1,958,000 356,000 644,000 310,000 26,136,000
27
Assumes an average household size of 2,000 square feet of heated living space.
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Conservative: Assumes ve percent of heating oil and propane heating market install pellet heating appliances and begin buying pellet fuel in the near future. Moderate: Assumes 11 percent of the oil heating market, 8 percent of the propane market, and 1 percent of the rewood market would convert to pellet heating in the near future. Figure 43.
Aggressive: Assumes 15 percent of the oil heating market, 12 percent of the propane market, and 2 percent of the rewood market would convert to pellet heating in the near future. Figure 43 below shows the estimated annual pellet demand for residential pellet heating under these three market growth scenarios.
Estimated Annual Pellet Demand for Residential Heating in Addison County (tons/year)
Analysis Run Addison Bridport Bristol Cornwall Ferrisburg Goshen Granville Hancock Leicester Lincoln Middlebury Monkton New Haven Orwell Panton Ripton Salisbury Shoreham Starksboro Vergennes Waltham Weybridge Whiting TOTAL Conservative 114.61 105.79 338.71 99.06 235.24 19.49 29.46 38.05 90.71 107.18 616.41 148.94 142.21 102.31 57.53 48.72 98.13 105.09 154.97 227.12 41.30 74.70 35.96 3,031.70 Moderate 225.56 208.21 666.64 194.97 462.99 38.35 57.99 74.88 178.53 210.95 1213.19 293.14 279.90 201.36 113.24 95.89 193.14 206.84 305.01 447.01 81.28 147.03 70.77 5,966.87 Aggressive 317.91 293.46 939.58 274.79 652.56 54.06 81.73 105.54 251.63 297.32 1709.91 413.16 394.49 283.80 159.60 135.14 272.22 291.53 429.89 630.03 114.55 207.22 99.75 8,409.88
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Figure 44. Simple Payback on Pellet Heating for an Average Addison County Residence
Oil Price Typical Home size Gallons oil per year Annual cost of Oil Capital cost of installing pellet stove Replacement of oil28 Price of Bagged Pellets Simple Payback on Investment $2.50/gal. Oil 2,000 sq. ft. 700 $1,750 $3,400 65% $290 6.45 years $3.00/gal. Oil 2,000 sq. ft. 700 $2,100 $3,400 65% $290 3.88 years $3.50/gal. Oil 2,000 sq. ft. 700 $2,450 $3,400 65% $290 2.77 years
As Figure 43 shows, a reasonable range of estimated future pellet demand for Addison County is between 3,032 and 8,410 tons per year. The conservative scenario represents a 30 percent increase from where the market is presently. The moderate scenario represents a 258 percent increase and the aggressive scenario represents a 364 percent increase. The near-future residential market potential may be closest to the moderate 5,967 tons per year gure should current trends of pellet appliance sales continue for the next few years. However, despite these positive trends, this moderate gure for demand would still be insufcient to support a pellet mill serving only Addison County. If Chittenden and Rutland Counties were also included in the potential market (adding the two most populated counties in the state), then annual pellet demand would increased by an estimated additional 37,500 tons per year. Total pellet demand for all three counties would be about 43,500 tons per year. This aggregated three county residential market could be large enough to support a medium sized pellet mill in Addison County.
8.2.2 Estimating Annual Savings on Residential Heating Costs. Potential savings on heating costs will be an important factor in the actual portion of residences that will convert to pellet heating in the future. A typical Addison County residence was characterized and simple payback analysis of installing a pellet stove was conducted across a range of three heating oil prices, assuming all other factors (capital cost, oil offset, and pellet price) remained the same. The results are shown in Figure 44 above. At oil prices of $3.50 and greater, payback would be less than three years (2.77 years). At an oil price of $3 per gallon, payback would be 3.88 years. At an oil price of $2.50 per gallon, payback would be just over six years. For the typical Addison County resident using oil for heating, total savings might be about $300 over the heating season, assuming pellets would displace 65 percent of the oil used for heat and domestic hot water. The savings to residents will depend on the degree to which pellets are used for heating.
28
Scenario assumes a pellet stove will not provide 100% of heat and does not provide domestic hot water.
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Figure 45 shows the relationship between payback and oil price: As the price of oil increases, the payback period becomes shorter, since savings will increase with increasing oil prices (assuming all other factors remain the same). The above calculation of payback does not include the American Recovery and Reinvestment Act (ARRA) of 2009 tax credit mentioned previously. Through the ARRA,
homeowners who make energy improvements, including purchasing and installing a biomass stove, can receive on their federal tax return a credit equal to 30 percent of the cost of the energy improvement (or stove) up to $1,500. The appliance must be rated to greater than 75 percent efciency to qualify for the credit, and manufacturers of stoves are free to use their own methods to calculate efciency as long as they can verify the results. Homeowners should obtain a certicate of qualication from the stove dealer; the certicate does not need to be led with the homeowners tax return, but should be kept for their records. If a homeowner were to install a qualifying stove and received the tax credit, simple payback on the investment would improve considerably. Figure 46 below shows re-calculated simple payback including the 30 percent tax credit; in this case, the tax credit is $1,020, shown below as a reduction in the capital cost of installing the pellet stove.
Simple Payback on Pellet Heating for an Average Addison County Residence With the ARRA 2009 Tax Credit
Oil Price Typical Home size Gallons oil per year Annual cost of oil Capital cost of installing pellet stove Replacement of oil29 Price of Pellets Simple Payback on Investment $2.50/gal Oil 2,000 sq. ft. 700 $1,750 $2,380 65% $290 4.5 years $3.00/gal Oil 2,000 sq. ft. 700 $2,100 $2,380 65% $290 2.71 years $3.50/gal Oil 2,000 sq. ft. 700 $2,450 $2,380 65% $290 1.94 years
29
Scenario assumes a pellet stove will not provide 100% of heat and does not provide domestic hot water.
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8.2.3 Residential Market Survey Results. In an effort to better assess both the existing and future residential pellet heating fuel market in Addison County, this study included an online survey. A copy of this survey is included as Appendix I at the end of this report. Please note that while the survey gathered viable information, both the limited survey distribution (sample size) and the low response rate diminish the overall validity of the survey results. Nonetheless, the results are worth presenting and discussing. The following section presents the results of the survey to supplement the market information discussed above, but should not be misinterpreted as being results accurately depicting the whole of Addison County. Fifty-ve Addison County residents responded to the on-line residential market survey, most of who had been notied of the survey by the Addison County Chamber of Commerce. Average home size among the respondents was 1,971 square feet. Of 55 respondents, 28 heat with rewood, 27 heat with oil, 24 heat with propane, 11 heat with pellets, four heat with electric, three heat with solar, two heat with biodiesel and one heats with corn (many use more than one heating source/fuel). Figure 47 at right (top) shows the breakout of home heating fuels among the survey respondents. Average heating oil price among respondents was $3.05 per gallon. Of the rewood users, only four heat solely with rewood; of the pellet users, two heat only with pellets and two heat with rewood and pellets only (for 100 percent wood heating). Of 44 respondents, 24 have considered heating with pellets. Respondents said they would be most likely to convert to pellet heating if oil prices were $4 per gallon or more or if simple payback on the investment was three years or less. Figure 48 at right (bottom) shows the
likelihood of respondents to convert to wood pellet heating across three possible payback periods. As is shown in this chart, a payback period of less than three years would make respondents more likely to convert to pellet heating. In the examples of payback period given in the previous section, payback would be less than three years when the oil price is $3 per gallon, the pellet price is $290 per bagged ton, and the ARRA of 2009 tax credit is used. Without the tax credit, payback would likely be too long unless the oil price was $3.50 per gallon or more.
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Thirty-three of the 55 respondents commented that they decided against pellet heating, and cited their reasons. Many respondents reported they prefer to use cordwood (over pellets) because: They have access to free wood on a family woodlot Cordwood is less expensive and less processed than pellets Cordwood is more locally available than pellets Additionally, some of the overall reasons cited for not heating with pellets included: Already have a wood stove Think pellet stoves are messy and noisy Pellet stoves use electricity Think pellet supply is not reliable However, 31 of 51 respondents said they would be interested in purchasing pellets locally if a pellet mill opened in Addison County. In a separate survey question, 44 of 51 respondents said they would prefer to buy pellets through a distributor: 22 of 51 would prefer to receive pellets delivered from a distributor, and 22 of 51 would prefer to pick up the pellets from a distributor, possibly saving money. 21 of 51 respondents said they would prefer to purchase pellets directly from the manufacturer by the ton, possibly picking the pellets up themselves if it meant saving money. Eight of 51 respondents said they would not prefer to buy pellets locally. Additionally, the majority of people surveyed (29 out of 50) would prefer to buy their pellets by the ton in 40-pound bags. Figure 49. Figure 50. Figure 51. The majority of respondents said it is very important that their pellets are produced locally (22 out of 50 respondents), harvested locally (18 out of 50), and harvested sustainably (32 out of 50).
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Respondents were given the opportunity to provide any thoughts, comments, or feedback. The two primary themes that emerged from the 23 comments received were (1) the importance of cost as a factor in the decision to install a pellet heating system and (2) the need for public education around the technology, benets, sustainability, and supply of pellets. Some noteworthy comments are included below, copied from the on-line survey (grammatical and spelling errors were not corrected). The problem is in nding the money to purchase the unit - if there could be more loan programs, people would buy. We had the money, but when we could not nd stoves or pellets last year, we went with a wood stove. I think it would be nice to buy locally, not to have to drive to Burlington or Rutland. I am very concerned about the impact on our local forests and the sustainability of our current forested landscape. Would think about purchasing a pellet boiler if money was available whether or not a facility is built in Addison (although Id like for one to become available) as there is one in North Clarendon. I think pellets and biomass in general in VT should not be considered a long term solution to our energy issues. Wind and sun are the only truly renewable resources and we should be emphasizing those technologies as we force policy and market shifts. I will always use my woodstove for heating as I either harvest wood off my property or buy logs and have all equipment necessary, also it does not require electricity for its operation. However I still rely on my boiler to provide backup heat and domestic hot water and am planning to replace my existing oil red unit within the next 5 years.
I have considered an outside wood boiler or replacing the oil to a gas or pellet red boiler. It would be easier to retro-t the existing boiler and far cheaper and logistically easier to use pellets where it is located. If a good quality locally produced pellet was available it would denitely put me at replacing the oil red boiler to a pellet. My reluctance to switching to pellets at this point are consistent quality, price uctuations, and not a locally (at least regionally) produced product, Im already paying for oil produced and transported half way around the world. Would buy pellet boiler if present oil boiler, now converted to use B100 biodiesel, needed replacement. Cost of pellets compared with other fuels would not be a factor. CO2 emissions would be. I am not interested in seeing a plant or manufacturing facility of any kind in my town unless it would mean that my property taxes would go down signicantly. 8.3 COMMERCIAL MARKET 8.3.1 Estimating Annual Pellet Demand for Commercial Heating in Addison County. While the number of residences in Addison County was easily obtained through census data, the number of businesses in the County was more difcult to determineespecially those with heated building space. According to ACRPC information, there are an estimated 1,800 businesses in Addison County including all home based businesses. A large majority of these businesses may not occupy physical space requiring heat not already accounted for in the residential survey. Therefore, a conservative estimate of 300 businesses within the County was assumed after surveying several sources of information.
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Figure 52. Estimated Annual Pellet Demand for Commercial Heating in Addison County (tons/year)
Analysis Run County Total Conservative 202 Moderate 390 Aggressive 676
The average facility size was assumed to be 5,000 square feet, knowing that some facilities would be signicantly larger manufacturing or agricultural facilities and others may be smaller retail-type settings. Using these assumptions, the total estimated square footage of commercial heated space in Addison County was 1,500,000. If 70 percent of businesses were heated with oil, 28 percent with propane, and 2 percent with rewood, and 2.79 percent of the businesses heating with each fuel already heat with pellets the current annual demand for pellets in Addison County is approximately 145 tons. This amount is not sufcient to support a pel-
let mill, even when combined with the above estimated residential demand of 5,967 (for a total of 6,112 tons per year, not considering Chittenden and Rutland Counties). Assuming, however, that interest in pellet heating is continuing to expand and the use of central pellet boilers (not stoves) fueled with bulk pellets is being more available to the commercial heating sector, additional scenarios of possible future demand were explored: Conservative: Assumes 4 percent of the oil heating market, 4 percent of the propane market, and 0 percent of the rewood market would convert to pellet heating. Moderate: Assumes 8 percent of the oil heating market, 8 percent of the propane market, and 1 percent of the rewood market would convert to pellet heating. Aggressive: Assumes 15 percent of the oil heating market, 12 percent of the propane market, and 2 percent to the rewood market would convert to pellet heating.
Figure 53.
Simple Payback on Pellet Heating for an Average Addison County Business

Oil Price Typical business size Gallons oil per year Annual cost of Oil Capital cost of installing pellet stove Replacement of oil30 Price of Pellets Simple Payback on Investment $2.50/gal Oil 5,000 sq. ft. 4,200 $10,500 $17,000 80% $270 8.12 years $3.00/gal Oil 5,000 sq. ft. 4,200 $12,600 $17,000 80% $270 4.05 years $3.50/gal Oil 5,000 sq. ft. 4,200 $14,700 $17,000 80% $270 2.70 years
30
Scenario assumes centralized pellet boiler will cover larger percentage of heating load and provide domestic hot water as compared to residential scenario of pellet stove.
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Figure 52 on the previous page (top) shows the annual pellet demand for commercial pellet heating under these three scenarios. Figure 53 on the previous page (bottom) shows, a reasonable range of estimated pellet demand is between 202 and 676 tons of pellets per year. The near-future commercial market potential may be closest to the moderate 390 tons per year gure, or 6,356 tons per year when combined with the moderate estimate of annual pellet demand for residential heating. As was described in the residential market discussion, adding the commercial markets of Chittenden and Rutland Counties would greatly increase the demand, thereby better supporting a pellet mill business in Addison County. 8.3.2 Estimating Annual Savings on Commercial Heating Costs. As with residential heating, potential savings on heating costs will be an important factor in the actual portion of businesses that would convert to pellet heating. A typical Addison County business was characterized and conceptual simple payback analysis for the installation of a pellet boiler was conducted across a range of three heating oil prices, assuming all other factors (capital cost, oil offset, and pellet price) remained the same. The results are shown in Figure 53 on the previous page.
At oil prices of $3.50 and greater, payback would be less than three years (2.70 years). At an oil price of $3 per gallon, payback would be about 4 years. At an oil price of $2.50 per gallon, payback would be more than eight years. As with the residential market assessment above, the payback period becomes shorter as the price of oil increases (assuming all other factors remain the same). For the typical Addison County business using oil for heating, total savings might be about $780 over the heating season, assuming pellets replace 80 percent of the oil fuel use. Figure 54 below shows the relationship between increasing oil prices and decreasing payback period.
Figure 54.
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Figure 55. Figure 56. Figure 57.
8.3.3 Commercial Market Survey. To better assess both the existing and future commercial pellet heating fuel market in Addison County, an on-line survey was designed and distributed electronically. A copy of this survey is included as Appendix J at the end of this report.
It is important to note that while the survey was designed to gather statistically viable information, both the limited survey distribution (sample size) and the meager response rate diminish the overall validity of the survey results. The following section presents the results of the survey to supplement the market information discussed above, but should not be misinterpreted as being results accurately representing the whole of Addison County. Nineteen business owners responded to the online commercial market survey. Average facility size was 4,960 square feet among 15 of the respondents, with a 16th respondent representing a manufacturing facility between 50,000 and 100,000 square feet (not included in the calculation of average facility size). The majority of business facilities are heated with oil or propane, though some are heated with rewood, pellets, or electricity. The chart shown here gives the breakout of heating fuels used among the survey respondents. One facility each is heated with corn, bark chips, and scrap wood (these are shown in the other category on this chart). Of the 19 business owners surveyed, 12 said they have considered heating with pellets. Thirteen respondents gave reasons for choosing not to heat with pellets, including the cost of the fuel (5 out of 13), the cost to install the new system (3 out of 13), and the limited availability of pellets (2 out of 13). In general, the likelihood of installing pellet heating increased with decreasing payback periods, with the majority being very likely to heat with pellets if the payback period was less than 3 years. In general more respondents said they would consider or be likely to convert to pellet heating with increasing oil prices.
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Of the 19 respondents, nine would be interested in buying pellets locally; three would not be interested in buying pellets locally, and seven said they might be interested in buying pellets locally. Of 18 respondents (one skipped this question), 12 would prefer to buy pellets direct from the manufacturer by the ton (picking them up themselves and possibly saving money), seven would prefer to buy them from a distributor (picking them up themselves and possibly saving money), seven would prefer to buy from a distributor and have them delivered, and three said they would not be interested in buying pellets locally. Of 17 respondents, nine would prefer to buy pellets by the ton in 40-pound bags if they were available locally, four would prefer to buy them in bulk bags (large sacks on a pallet), four would prefer to buy them in bulk (loose and delivered to a holding bin), three would prefer to buy them in 40-pound bags, and two said they would not buy pellets locally. (It should be noted here that, while this was not addressed in the survey, pellet boilers of the size being installed in mid- to large-sized businesses would require bulk fuel storage and delivery, since the demand for pellets is greater. For these large systems, handling bagged pellets would be too cumbersome for the heating system operators.) Among the 19 business owners surveyed, the majority said it was very important that their pellets be produced locally (9), harvested locally (10), and harvested sustainably (15). Some noteworthy comments from the respondents are included below, copied from the online survey (these were not edited). I would be very interested in burning grass or local corn pellets. I would even buy a new stove if I had to. I use pellets for my home and would love a new source for purchasing and it would also make the implementation of a system in our warehouse more feasible.
I have to be condent that the technology and pellets will be available. I put off buying a pellet stove and/or furnace last year because when we had the money to buy, the supply disappeared. Sustainability is very important to me. The biggest concern I have with an incoming plant is where is the wood coming from and how is it harvested? Is it going to deplete the local supply of cord rewood thus making it more difcult and expensive to purchase? Maintaining forests and maintaining air quality in the vicinity of the plant (and down wind) are also strong concerns of mine. Locally produced pellets sounds like a great idea.
Figure 58.
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9.0 Pellet Fuel Manufacturing Business Overview

It was also assumed that the majority of the wood ber will be delivered to the facility as roundwood which will require on-site debarking and chipping prior to further pulverizing and drying inside the pellet mill. Additionally, it was assumed that the bers received will require signicant drying using a large rotarydrum drier and the drier will be heated by either electricity or wood-red boilers. 9.1 THE MANUFACTURING PROCESS 9.1.1 Receiving and Storage. All shipments of ber (roundwood, chips, or round bales of grass) would be weighed on truck scales upon entering the facilitys receiving yard, and would be inspected to make sure the material was acceptable. After unloading, the empty trucks would again be weighed to determine the net weight of the payload for tracking and payment purposes. 9.1.1.1 Roundwood Receiving and Storage. Roundwood, the primary source of ber for the conceptual pellet mill, would be received and stacked in outdoor piles in the facilitys wood storage yard. The wood storage yard would be used to build sufcient inventory to ensure continued and consistent pellet production at times when weather and road postings limit the amount of harvesting and trucking of wood from the forest. The wood receiving and storage yard should be sized to hold roughly three months worth of inventory.
The following discussion and analysis is not specic to any of the possible sites identied in section 7 of this report. In the sections below, the conceptual design, operation, capital costs, and business performance are explored for three different sized pellet mills: three tons per hour (TPH), six TPH, and 12 TPH. For each of the three pellet mill scenarios a business model of producing Super Premium, Premium, and limited amounts of Standard grade pellets in bags and bulk was used. It was assumed that the source ber would be wood and grass bers would not be included in the blend for the rst few years.31 Pellet mill logisticshow bers are received and processedand the size of the pellet mill can signicantly impact how the business functions nancially. In this study it was assumed that a conceptual pellet mill will receive both wood and a small amount of grass bers.
31
Grass ber inclusion could be reexamined after a few years should the pellet market requirements change and the ber price differential between wood and grass decrease.
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9.1.1.2 Chip Receiving and Storage. While a majority of the wood yard would be dedicated to roundwood receiving and storage, the pellet mill would need to be able to receive and process woodchips directly as needed. Woodchips can be stock-piled and stored outdoors; however, if stored for periods longer than three months the risk for decomposition, fermentation, and even self-ignition increases dramatically. Due to the fact that chips are more susceptible than roundwood to gaining moisture by being exposed to the elements, it is recommended that chips be stored under a roofed area until they are used. Chips can be delivered in live-bottom trailers but it is more cost effective to receive chips in box trailers which require a trailer-tipper for unloading. If woodchips in quantities in excess of 10,000 tons per year will be used the cost and benets of installing a trailer tipper should be investigated further. 9.1.1.3 Grass Receiving and Storage. Should the decision to include grass be made at some point in the future, hay bales can be received and stored until they are needed to blend into the wood ber mix. Bales can be stored out-
doors, but keeping them under cover of tarps or a roof is helpful to minimize absorption of excess moisture. While it is common to plastic wrap hay bales for feed, it is not recommende for grasses to be used in pellet making. 9.1.2 Feedstock Preparation and Grinding. If Super Premium or Premium grade pellets are desired, roundwood will need to be stripped of its bark prior to chipping and further grinding. If higher ash content fuel such as Utility grade pellets was desired, the debarking step could be skipped. But since the majority of the pellet heating market requires high quality and low ash content pellet fuel, the roundwood should be de-barked. This can be done several different ways with varying degrees of effectiveness: Using chain ail mechanism, a rosser-head, or a ring debarker. The bark stripped from roundwood can be sold as bark mulch, stored separately and fed into the pellet ber mix (though it will increase the ash content), or used as boiler fuel to provide the heat necessary to dry the pellet bers.
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Once roundwood is debarked it can be fed to chipping equipment which produces chips ranging in size from 1 inch by 1 inch by 1/8th inch to 2 inches by 2 inches by inch. Depending on the pellet mills size and capacity, both the debarking and chipping can be conducted using stationary installed on-site equipment or by contracting a third party to periodically debark and chip inventory on-site. Larger pellet mills will invest in on-site debarking and chipping equipment while smaller pellet mills may choose to contract out this step to avoid the large capital costs of stationary debarking and chipping equipment. Once material is in chip form (or in loose hay form) it is fed into the facility for further grinding and screening to ensure a consistent and ne ber for pellet making. Depending on the feedstock, and particularly if multiple feedstocks are blended, the material may Pictured at right is a rotary drum dryer at a largescale pellet facility.
require further mixing and grinding to get an even mixture of small particle size material. The grinding is typically performed using a hammer mill. While it is the goal to sufciently reduce the particle size of the material for pellet making, it is important not to over grind the bers into our like powder. Powdery nes are extremely difcult to pelletize. 9.1.3 Drying. Once conveyed into the facility the rst step is to dry the feedstock material to a consistent and suitable moisture content. This is most often performed using a rotary drum drier (pictured here), bringing the material to 8 to 12 percent moisture content. Rotary drum driers are most commonly supplied with hot air from a large combustion boiler/ furnace. These boilers/furnaces can be fueled with oil, propane, natural gas but are most commonly wood red. Most pellet mills use waste wood unsuitable for pellet making (bark from the debarking process, etc.) as the boiler fuel. Green ber for pellet making is conveyed into the drum and hot air is supplied. Dry material is removed from the back end and the moisture rich exhaust gas is ducted to a particulate removal system and then discharged via a stack. Signicant re prevention and control systems are necessary in the drying system (and throughout the pellet mill) to prevent hot air igniting wood bers in the drier.
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Debarking & Chipping
Further Grinding
Drying
Densification & Extrusion
Cooling, Storing & Packaging
9.1.4 Pellet Extrusion. Once the material has been dried and blended to optimal conditions, it is fed into the pelletizer or pellet mill. There are two main types of pellet mills: a at die mill and a ring die mill. The at die type has a circular perforated disk on which two or more rollers rotate and force the material through the holes. The ring die press features a rotating perforated ring on which rollers press on the material to the inner perimeter. A ram piston or pressing roller (depending on the type of mill used) on the pelletizer forces the material through a die which molds the material into the desired pellet shape and size. Knifes cut the extruded material to the desired length. The high amounts of pressure and heat created in the process help the material to bind (heat is generated by the piston or rollers). For wood pellets, lignin naturally present in the material holds the pellets together so no additional binders are required. Other materials low in lignin content, such as grasses, can be supplemented with distilled lignin or starch to enhance the binding of the material into a durable pellet. 9.1.5 Cooling and Storage. Once the pellets are made, they are spread out to cool, setting up the lignin (or other binding material) and hardening the nal product. Once cooled, the pellets can be sieved to separate out residual nes (which can be re-used for making pellets) and then are moved to storage from where they can be distributed or packed for use.
There is both science and art to the pellet making process and minor changes in materials or pellet process control can signicantly alter the resulting pellet quality in terms of bulk density, durability and nes content. 9.1.6 Bagging. If the pellets are not sold in bulk, either loose or in 1 ton bulk sacks, the pellets will be packaged into 40 pound bags for distribution to the residential heating market. Bagging operation can be rather low-tech and slow or very sophisticated and capable of producing hundreds of bags per hour. After lling and sealing, the bags are stacked 50 to a pallet (one ton) and stretch-wrapped for shipment. Figure 59 above summarizes the overall pellet-making process.
Figure 59.
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Pellet Mill Size and Logistical Details

Pellet Mill Hourly Capacity Maximum yearly output Average weekly in-bound truck trafc Average weekly out-bound truck trafc Estimated Minimum Required Building Size (sq. ft.) Estimated Minimum Total Site Land Requirement (acres)
3 tons 6 tons 12 tons
22,500 45,000 90,000
40 79 159
19.5 40 79.5
8,000 12,000 18,000
4 6 8
According to the data presented in the graph above, there is a threefold production cost advantage between a mill producing three TPH and a mill producing 12 TPH. This large of a production cost advantage strongly favors the business viability of larger pellet mills.
Figure 60.
9.2 FACILITY DESIGN OPTIONS AND OPERATION 9.2.1 Facility Size Options. While both the ber resource assessment and the market assessment concluded there is limited supply of ber and market demand for pellet fuel exclusively within the boundaries of Addison County, it should be noted that a signicantly larger scale pellet mill could be supported by extending both the ber basket and the product distribution area. For this reason the conceptual logistics and nancial performance of three sized pellet mills were examined. Figure 60 above illustrates several critical factors for each sized facility. As with most manufacturing businesses, economies of scale weigh greatly on the economic viability of a pellet mill. Economies of scale in pellet manufacturing are signicant, both in the xed and variable costs. Larger facilities are able to produce pellets at a lower cost per unit than small mills can. Figure 61 on the following page illustrates the relationship between a pellet mills size and the per-unit cost to produce pellets. As is shown, while there are slight economies of scale that apply to the capital costs of a pellet mill, the greatest impact comes from the operating costs.32
32
Most of the pellet mills recently constructed or under development in North America are designed to produce 12-14 TPH or approximately 100,000 tons of pellets annually. The recently completed New England Wood Pellet mill in Schulyer, New York and the brand new Curran Energy pellet mill in Malone, New York are examples of 100,000 ton per year pellet mills. In addition nearly all pellet mills being proposed and under development elsewhere in Vermont and the Northeast are slated to produce approximately 100,000 ton annually. In addition to economies of scale, another advantage of larger pellet mills is the amount of operational run time. Smaller pellet mills often have one pellet machine and should the machine breakdown or need routine maintenance the facility is not producing any pellets. Larger pellet mills often use multiple smaller machines in their production line so that, should one machine go down, there are still one or two more machines operating.
Graph was developed by Dr. Sudhagar Mani at the University of British Columbia and presented at a Bio-Energy conference in 2006.
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9.3 CONCEPTUAL PELLET MILL CAPITAL COSTS The costs to construct a pellet mill vary widely based on whether a pellet mill is built from scratch on undeveloped land or if a pellet mill can be built at an existing site where some infrastructure and buildings are in place. For this study and the following business analysis, it was assumed that undeveloped land would be purchased and a facility would be built from scratch. The following table displays the estimated costs of building a three, six, and 12 TPH capacity pellet mill. Key assumptions embedded in the gures presented are: The land is purchased The pellet mill is built on an undeveloped site without the use of existing infrastructure All three size facilities include on-site roundwood processing capacity (debarking and chipping) All three used wood red boilers to dry pellet bers Figure 61.
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Figure 62. Pellet Mill Capital Costs

Mill Capacity Land Purchase Site work Building Construction Wood Yard Receiving Storage Processing Pellet Mill Conveyors Driers + Boiler Pelletizer Cooling Bulk Storage Bagging Bag Storage Electric Hookup Water/Sewer Design Permitting GC mark-up Contingency Working Capital TOTAL Total (less Working Capital) Capital Cost per Max.Ton Capacity33 $50,000 $500,000 $400,000 $50,000 $50,000 $75,000 $65,000 $700,000 $800,000 $70,000 $100,000 $120,000 $70,000 $1,000,000 $1,400,000 $90,000 $150,000 $150,000 $30,000 $30,000 $650,000 $50,000 $40,000 $750,000 $70,000 $50,000 $850,000 3 TPH $150,000 $100,000 $1,540,000 6 TPH $200,000 $150,000 $2,100,000 12 TPH $325,000 $200,000 $2,800,000
Included in building cost $25,000 $10,000 $50,000 $25,000 $50,000 $567,750 $500,000 $4,852,750 $4,352,750 $ 246.33 $25,000 $10,000 $60,000 $25,000 $70,000 $890,250 $1,000,000 $7,135,250 $6,135,250 $ 181.10 $25,000 $10,000 $70,000 $25,000 $100,000 $1,227,750 $1,900,000 $10,392,750 $8,492,750 $ 131.89
33
Assumes 95% capacity production.
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The estimated capital costs presented in Figure 62 on the previous page are based on several published pellet mill costs, interviews with pellet mill owners and managers, and pellet mill business consultants.34
It is clear that the largest pellet mill has the lowest per unit capital cost and illustrated earlier in the graph depicting the economies of scale for pellet mills.
Figure 63. Conceptual Pellet Mill - Year-One Cash Flow

3 TPH Revenue Bulk Sales Bags Sales TOTAL REVENUE Expenses Fiber Purchased Labor Benets, fringe, etc. Insurance Electric Equip. Maint.& Repair Printed Bags & Packaging Supplies Product Distribution Advertising Debt Service Misc. TOTAL EXPENSE PROFIT/(Loss) Before Taxes Taxes (Federal & Vermont) Prot/(Loss) After Taxes $1,008,000.00 $604,800.00 $151,200.00 $25,000.00 $396,000.00 $100,000.00 $216,000.00 $216,000.00 $15,000.00 $473,294.15 $50,000.00 $3,255,294.15 $2,705.85 $160.87 $2,544.97 $1,958,400.00 $1,036,800.00 $259,200.00 $50,000.00 $792,000.00 $200,000.00 $378,000.00 $432,000.00 $28,000.00 $695,908.94 $75,000.00 $5,905,308.94 $610,691.06 $259,068.70 $351,622.36 $3,686,400.00 $1,555,200.00 $388,800.00 $95,000.00 $1,440,000.00 $250,000.00 $691,200.00 $864,000.00 $40,000.00 $1,013,616.57 $100,000.00 $10,124,216.57 $2,907,783.43 $1,235, 332.96 $1,672,450.47 $720,000.00 $2,538,000.00 $3,258,000.00 $1,440,000.00 $5,076,000.00 $6,516,000.00 $2,880,000.00 $10,152,000.00 $13,032,000.00 6 TPH 12 TPH
34
PFI report Equipment and operating costs for a wood pellet plant 1994. CSU report on Wood pellet Manufacturing Production Equipment and Cost Study for Walden, Colorado by William and Lynch, 1995.
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9.4 FIRST -YEAR CASH FLOW Using the pellet mill capital costs presented above, rst year cash ow for the three different sized pellet businesses were developed. Key assumptions included the following: 70 percent of capital cost is secured through commercial nancing Remaining 30 percent is owner equity Commercial nancing is at 7.5 percent The plant is operational 4,800 hours per year 75 percent of the product is sold in bags at $235 per ton (wholesale price) 25 percent of the product is sold in bulk at $200 per ton (wholesale price) 100 percent build out of mill capacity and sales in year 1 Bulk product is sold direct to the customer, but bags are sold via a distributor Every ton produced is sold Figure 63 on the previous page shows the rst-year cash ow for each of the three pellet business options. It illustrates the somewhat marginal economics of the three TPH pellet mill size as compared to the six and 12 TPH pellet sizes on a rst year cash ow basis. While all three of the pellet mills were cash ow posiFigure 64. Financial Analysis Results
3 TPH Project Capital Costs Initial Working Capital Total Capital Simple Payback (years) NPV IRR $4,352,750 $500,000 $5,352,750 232.19 $577,599 -5%
tive in year one, the 12 TPH mill generated roughly 657 times more after tax prot than the three TPH pellet mill. 9.5 CONCEPTUAL 10-YEAR PRO FORMA FINANCIALS Once the rst year nancial performance was examined on a cash basis, a ten-year projection was crafted to determine the longer term nancial performance of the three sizes of pellet mills. These 10-year pro forma examined the nancials on an accrual basis, accounting for non-cash expenses such as depreciation. The three TPH pellet mill generated a cumulative prot of $1.2 million over the ten-year period. The 6 TPH facility generated $6.3 million in prots over ten years and the 12 TPH facility produced $11.4 million in prot. For full versions of the 10 year pro forma, see Appendices K-M at the end of this report. When the all the capital costs, working capital, and business pro forma are analyzed there are several main nancial indicators that were examined to determine the overall nancial viability of the three optionscash ow, simple payback on investment, net present value(NPV) of the investment, and the internal rate of return (IRR) for the investment in a pellet mill.
6 TPH $6,135,250 $1,000,000 $7,135,250 12.03 $6,326,775 5%
12 TPH $8,492,750 $1,900,000 $10,392,750 3.59 $20,743,160 24%
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The three TPH pellet mill option was cash ow negative in the rst year but turning cash ow positive in the second year and sustaining continued revenue greater than expense for the remainder of the ten year analysis period. Both the six and twelve ton per hour pellet mill options proved cash ow positive in the rst year. Simple payback (rst year prot before taxes divided by total capital invested) was calculated for all three pellet mill size options and the three ton per hour mills small prot margin would require over 200 years to pay back the investment made in the mill. The six ton per hour pellet mill size option generated a rst year prot margin sufcient to pay back the investment made in just over 12 years. The twelve ton per hour pellet mill size option generated the largest prot and the fastest payback of less than four years. While simple payback can be a helpful basic indicator of nancial performance it is not sophisticated enough to account for the changing annual performance of a business. For this reason, both NPV and IRR of the investment in a pellet business are better metrics of nancial performance. NPV is a very detailed nancial tool, that measures the value of the invest performance over the time nancial analysis time-period (10 years) at todays dollar value. The NPV of all three pellet mill size options was calculated and only the 12 TPH mill generated a NPV greater than the total capital requirements. IRR is based on NPV calculations but translates the nancial performance of an investment (like a pellet manufacturing business) into a rate of interest earned on the investment. Most investors require a higher IRR on the investment in a business than what they could earn by investing their money in stocks, bonds, and other possible investments. The IRR of investing in a business with a high level of risk needs to well exceed the rate of return on lower risk investment opportunities.
The IRR for all three pellet mill size options were calculated and only the twelve ton per hour option generated a rate of return greater than typical market rates of 7-9 percent. While this analysis clearly leans toward the larger pellet mill as the most nancially viable option, it is extremely important to note that if the cost to construct a pellet mill could be lowered signicantly (such as co-locating at an existing facility with some of the necessary infrastructure in place) the economic indicators would look dramatically better. The analysis presented in this report was based on the cost to construct a pellet mill on undeveloped land. For example, if the 3 TPH pellet mill could be built and launched for $3 million, the simple payback would fall to just less than 30 years and the IRR would increase to 4 percent. If typical investors are looking for simple paybacks less than ve years and rates of return better than market performance, the three TPH size option is not viable even if the capital costs could be trimmed down to $3 million. 9.6 PELLET FUEL MARKET COMPETITION According the Pellet Fuel Institute there are currently over 80 established pellet mills operating in North America and producing in excess of 1.1 million tons annually. Not included in this gure are the countless proposed pellet millssome of which will likely be built and some of which will not proceed beyond the planning stage. A quick survey of bagged pellet retailers in Vermont showed there are pellets from New Hampshire, Maine, New York, Pennsylvania, Colorado, British Columbia and Quebec already being sold. The following section reviews those existing and proposed pellet mills within a reasonable distance from Addison County. Some of these mills may be in direct competition with a mill in Addison County for feedstock as well as for pellet sales.
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9.6.1 Pellet Mill Competitors. Figure 65 below shows the location of existing pellet mills, and the green area around each mill represents a 90-minute drive time radius from that mill.35 The following are descriptions of the existing pellet mills depicted in the map above: Vermont Wood Pellet Company LLC www.vermontwoodpellet.com Vermont Wood Pellet just began commercial production of pellets in September of 2009 in a converted pallet mill in North Clarendon, Vermont that went out of business a few years ago.
Vermont Wood Pellet purchases pine pulpwood as it main ber and produces loose bulk, bulk sack, and 40 pound bags of premium pellets. This 10,000 ton per year mill is the closest possible competitor located approximately 45 miles from the center of Middlebury, Vermont. Vermont Wood Pellet already has bulk distribution representation in Addison County via Bordeau Brothers and a retail relationship with the Addison County Relocalization Network (ACORN) for bagged product distribution http://www.acornenergycoop.com/productsservices.html.
Figure 65.
35
With the exception of Vermont Wood Pellet which has only a 60 minute drive time depicted in the map above.
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Curran Renewable Energy LLC www.curranpellets.com Pat Curran, owner of Seaway Timber Harvesting, has built and is nearing completion of a new pellet mill located in Malone, New York. This mill would produce 100,000 tons of nished pellets annually and consume approximately 200,000 tons annually. It is expected that Curran Energy will be operating at near capacity in late 2009. Curran Energy uses paper grade woodchips from its own substantial in woods chipping operations that use ail-debarker chippers. This mill is approximately 130 miles from the center of Middlebury, Vermont. New England Wood Pellet www.pelletheat.com New England Wood Pellet (NEWP) owns and operates two existing pellet mills and has a third under development. NEWPs ag ship facility is located in Jaffrey, New Hampshire, which is 130 miles from the center of Middlebury, Vermont. Its recently completed second mill, located in Schuyler, New York, is 170 miles away from Middlebury. NEWP recently announced its acquisition of Norbords Medium Density Fiberboard facility in Deposit, New York that will be converted into a third pellet mill. It will be located more than 200 miles away from Middlebury. In addition to the three pellet mills, NEWP operates a pellet distribution center in Palmer, Massachusetts where railcars of loose pellets from British Columbia are off-loaded and repackaged for the New England market. Energex www.energex.com Energex operates two pellet mills in the regionthe rst in Mifintown, Pennsylvania and the second in Lac-Megantic, Quebec. The Quebec mill is 160 miles from the center of Middlebury, Vermont and the Pennsylvania mill is too far away to effectively compete with a mill in Addison County.
Maine Woods Pellet Company www.mainewoodspelletco.com This recently completed pellet mill is located in Athens, Maine. This pellet mill can produce up to 100,000 tons of pellets annually and distribute both bulk and bags. Corinth Wood Pellets www.corinthwoodpellets.com Corinth Wood Pellets is another new pellet mill in Central Maine that has just come on-line in the last year. They produce hardwood pellets and distribute bulk and bagged product. The following are descriptions of known proposals for new pellet mills in Vermont. While these projects are currently under development and are moving forward, there is no guarantee they will be built. Vermont Renewable Energy Company LLC (Pellet Mill), Island Pond, Vermont As of February 2009, a Newport, Vermontbased couple has been planning to turn the closed Ethan Allen furniture factory in Island Pond into a wood pellet manufacturing plant. Vermont Renewable Energy Company LLC will produce 50,000 tons of wood pellets a year with capacity to produce 100,000 tons annually. If built, this mill would be 160 miles from the center of Middlebury, Vermont. International Wood Fuels www.iwoodfuels.com International Wood Fuels has recently begun construction of a pellet mill located in Maine but this company has been looking to establish a pellet mill somewhere in Vermont. IWF had been considering the possibility of locating at the Old Burke Lumber site located in the town of Sutton but is reportedly evaluating other options at this time.
Page 81
9.7 IMPORTANT RESOURCES Should an entrepreneur pursue establishing a pellet mill in Addison County, the following section highlights some important resources available to assist in the planning and permitting processes. 9.7.1 Economic Development. The following are sources for assistance for businesses looking to locate in Addison County or in Vermont: Addison County Economic Development Corporation (ACEDC) www.addisoncountyedc.org ACEDC operates three Revolving Loan Funds. Eligible businesses can borrow between $5,000 and $100,000 for early stage development projects as well as equipment purchases, leasehold improvements, working capital, and other activities. More information can be found at their website. State of Vermont Economic Development Office www.thinkvermont.com The Department of Economic Development, is part of the Agency of Commerce and Community Development and works to create and retain quality jobs and strengthen the competitiveness of Vermonts businesses and the overall economy. The Department of Economic Developments principal focus is to support Vermonts businesses. Much of this support is delivered through specialized programs that provide solutions to business challenges. 9.7.2 Permitting. There are a wide range of possible permits that would be necessary for a pellet mill. Further information on local permits can be obtained by contacting the host town directly. A brief review of state land use and air quality permitting is presented below:
Vermont Act 250 Under Act 250, known as the Land Use and Development Act, the State of Vermont created nine District Environmental Commissions to review large-scale development projects using 10 criteria that are designed to safeguard the environment, community life, and aesthetic character of the state. They have the power to issue or deny a permit to real estate developers for any project that encompasses more than 10 acres (40,000 m), or more than 1 acre (4,000 m) for towns that do not have permanent zoning and subdivision bylaws. For further information contact the District 9 Act 250 ofce at: Geoff Green 111 West Street Essex Junction, Vermont 05452 Phone: 802-879-5657 Air Pollution Control www.anr.state.vt.us/air/Permitting Any pellet mill using a boiler larger than 90 horse power will need to submit an application for an air permit. The attached link is to the APCDs web page with information for permits. Generally the amount of criteria pollutants that may be emitted by a proposed source will be determined by the proposal. The Agency then determines which regulatory requirements that the project will trigger. The contact for the Air Pollution Control Division of the Vermont Department of Environmental Conservation is given below: Steven Snook, Environmental Engineer Air Pollution Control Division - Engineering Services steven.snook@state.vt.us Phone: 802-241-3856 Fax: 802-241-2590
Page 82
10.0 Study Conclusions

Pellet heating is a growth industry where demand for heating appliances and fuel has been growing steadily for the decade. There is a business opportunity to make pellet heating fuel in Vermont from Vermont resources in effort to lower the current dependence on imported heating fuels (oil, propane, and even pellets). There is virtually no supply of wood or agricultural residues available for pellet fuel making. Any ber would be sourced from harvested low grade wood or possibly from dedicated energy crops such as grass. While there is tremendous agricultural capacity to grow grasses in Addison county, their viability as pellet feedstock is limited. Wood ber would be the primary ber input for a pellet making business. When limiting factors such as access and ownership are considered and current demand for rewood are accounted for, there is barely enough wood ber available in Addison County to support a 3 TPH pellet mill. There is ample supply of wood ber to build a 6 ton per hour if the adjoining counties are included in the ber basket. There are several excellent possible pellet mill locations in Addison County each one with its own pros and cons. There is currently insufcient market within Addison County to support a 3 TPH facility. With higher fossil heating fuel costs, more market growth, and distribution to neighboring counties, Addison County could support a 6 TPH facility. The economics of pellet fuel production clearly favor larger facilities, but there are ways in which a smaller pellet mill can be nancially viablenamely reduction of the capital costs. Figure 66 below summarizes the study ndings.
Figure 66. Summary of Findings

Addison County Only Addison County + Rutland and Chittenden 3TPH ? 6TPH X ? 12TPH X X
3TPH Wood and Ag Fiber Site Locations Current Market Financial Feasibility X ?
6TPH X X ?
12TPH X X
Page
Page

11.0 Appendices
Maps A. Total Starting and Remaining Accessible Forestland B. Total Starting and Remaining Functional Agricultural Land C. Industrially and Commercially Zoned Areas in Addison County D. Middlebury Industrial Park E. Vermont Natural Agricultural Products OMYA Quarry F. Claire Lathrop Sawmill G. A Johnson Company H. White Pigment Mill Phoenix Feed Mill Online Market Surveys I. Residential J. Commercial Ten-Year Pro Forma Financials K. 3 TPH Mill L. 6 TPH Mill M. 12 TPH Mill N. First-Year Cash Flow Additional Resources O. Pellet Mill Equipment Manufacturers P. Pellet Dealers in Addison County
Page
PHYSICALLY INACCESSIBLE AREAS AND REMAINING ACCESSIBLE FORESTLAND
MONKTON FERRISBURG VERGENNES PANTONWALTHAM ADDISON
Map Legend Town Boundaries Addison County Inaccessible Areas Accessible Forest Areas by Forest Type Deciduous
STARKSBORO
BRISTOL LINCOLN
Evergreen Mixed
NEW HAVEN WEYBRIDGE
BRIDPORT
MIDDLEBURY
RIPTON
GRANVILLE
CORNWALL SALISBURY HANCOCK
SHOREHAM
WHITING LEICESTERGOSHEN
ORWELL
This map was created by the Biomass Energy Resource Center using the National Land Cover Dataset modfied for this project by Vermont Center for Geographic Information. Copyright 2009. All rights reserved.
TOTAL STARTING AND REMAINING FUNCTIONAL AGRICULTURAL LAND
Map Legend Town Boundaries Addison County Inaccessible Areas Agricultural Land CROP COVER Corn Fallow Hay Pasture / Idle Other Crops
FERRISBURG VERGENNES PANTON WALTHAM
MONKTON STARKSBORO
NEW HAVEN ADDISON WEYBRIDGE
BRISTOL LINCOLN
BRIDPORT
MIDDLEBURY CORNWALL SALISBURY
RIPTON
GRANVILLE
HANCOCK
SHOREHAM WHITING LEICESTER GOSHEN
ORWELL
This map was created by the Biomass Energy Resource Center using the National Land Cover Dataset modfied for this project by Vermont Center for Geographic Information. Copyright 2009. All rights reserved.
INDUSTRIAL AND COMMERCIAL AREAS ADDISON COUNTY, VERMONT
MONKTON FERRISBURG VERGENNES PANTON WALTHAM NEW HAVEN ADDISON WEYBRIDGE
STARKSBORO
BRISTOL LINCOLN
MIDDLEBURY BRIDPORT CORNWALL SALISBURY SHOREHAM WHITING LEICESTER
RIPTON
GRANVILLE
HANCOCK
GOSHEN
ORWELL
MAP LEGEND Town Boundaries Industrial / Commercial Districts Commercial Districts 3-Phase Power Lines Roads Railroads Water
This map was created by the Biomass Energy Resource Center using data from Addison County Regional Planning Commission and Vermont Center for Geographic Information. Copyright 2009. All rights reserved.
POTENTIAL SITES FOR A BIO-FIBER FUEL PRODUCTION FACILITY - MIDDLEBURY, VERMONT
Middlebury Industrial Park 5 Acres
MIDDLEBURY
WEYBRIDGE
MAP LEGEND
Industrial / Commercial Districts Commercial Districts 3-Phase Power Lines Roads Parcels Town Boundaries Railroads Water
This map was created by the Biomass Energy Resource Center using data provided by Addison County Regional Planning Commission and Vermont Center for Geographic Information. Copyright 2009. All rights reserved.
POTENTIAL SITES FOR A BIO-FIBER FUEL PRODUCTION FACILITY - MIDDLEBURY, VERMONT
Moo Doo (Vermont Natural Agricultural Products) 506 Acres
MIDDLEBURY
MAP LEGEND
PARCELS Industrial / Commercial Districts Commercial Districts 3-Phase Power Lines Roads Town Boundaries Railroads Water
Photo of Vermont Natural Agricultural Products Site This map was created by the Biomass Energy Resource Center using data provided by Addison County Regional Planning Commission and Vermont Center for Geographic Information. Copyright 2009. All rights reserved.
POTENTIAL SITES FOR A BIO-FIBER FUEL PRODUCTION FACILITY - BRISTOL, VERMONT
Claire (Jim) Lathrop Site, Former Sawmill 12.37 acres
BRISTOL
MAP LEGEND Industrial / Commercial Districts Commercial Districts parcels Town Boundaries 3-Phase Power Lines Roads Railroads Water
Photo of Claire (Jim) Lathrop Site, former sawmill

POTENTIAL SITES FOR A BIO-FIBER FUEL PRODUCTION FACILITY - BRISTOL, VERMONT
A. Johnson Sawmill 58.57 acres
BRISTOL
MAP LEGEND Industrial / Commercial Districts Commercial Districts parcels Town Boundaries 3-Phase Power Lines Roads Railroads Water
Photo of the A. Johnson Sawmill Site This map was created by the Biomass Energy Resource Center using data provided by Addison County Regional Planning Commission and Vermont Center for Geographic Information. Copyright 2009. All rights reserved.
POTENTIAL SITES FOR A BIO-FIBER FUEL PRODUCTION FACILITY - NEW HAVEN, VERMONT
Old Grain Mill (Pheonix Feed)
NEW HAVEN
MAP LEGEND Parcels Town Boundaries 3-Phase Power Lines Roads Railroads Industrial / Commercial Districts Commercial Districts Water Photo of Old Grain Mill (Pheonix Feed) Site
Addison County Bio-Fiber Pellet Market Survey

1. Residential Market
The following survey is a part of a study being conducted by the Biomass Energy Resource Center for the Addison County Regional Planning Commission exploring the feasibility of a community-scale pellet fuel manufacturing business serving Addison County. If you are not a resident of Addison County please do not fill out or submit a survey. Please only one survey entry per household.
Confidentiality Statement The confidentiality of each survey respondent is of the utmost importance. All information submitted in the survey response will be kept confidential and will not be presented in a manner that reveals the respondents identity. To be entered into the raffle to win a free ton of pellets or a free cord or firewood, please fill out your contact information at the end of this survey.
1. Are you a full- or part-time resident of Addison County?

j k l m n j k l m n j k l m n
I am not a resident of Addison County Part-time resident Full-time resident
Which town?
2. What is the square footage of your home in Addison County? 3. What type of fuel did you heat your home with last winter? Check all that apply.
c d e f g c d e f g c d e f g c d e f g c d e f g c d e f g c d e f g
Oil Propane Firewood Pellets Electric Solar Other (please specify)

4. How much of each fuel did you use for heating last year?
Oil (in gallons) Propane (in gallons) Firewood (in cords) Pellets (in tons) Electric (kWh) Other (give units)
5. What price did you pay last winter for your heating fuel(s)?
Oil (per gallon) Propane (gallon) Firewood (cord) Pellets (ton) Electric (kWh) Other (give unit)
6. If you heated with pellets last winter, where did you buy the pellets? Check all that apply.
j k l m n j k l m n j k l m n j k l m n j k l m n
I did not heat with pellets Local hardware store Pellet stove dealer Local co-operative Other (please specify)

7. If you heated with pellets last winter, where did the pellets come from? Check all that apply.
c d e f g c d e f g c d e f g c d e f g c d e f g c d e f g c d e f g c d e f g c d e f g c d e f g
I did not heat with pellets New England New York Pennsylvania Western US Quebec Canada (other than Quebec) I do not know where they came from I am not concerned with where they came from Other (please specify)
8. If you heat with pellets, how satisfied are you with your current supply of pellets?
Very Satisfied Overall, I am Satisfied Indifferent Not Satisfied I do not heat with pellets
j k l m n
j k l m n
j k l m n
j k l m n
j k l m n
Please share any comments on your satisfaction level.
9. If you do not currently heat with pellets, have you considered it?
j k l m n j k l m n
No Yes
10. If you decided against heating with pellets, please give your reason in the space provided.

11. If you do not currently heat with pellets, but you have considered it, what type of appliance would you install?
j k l m n j k l m n j k l m n j k l m n j k l m n j k l m n
I have not considered it Pellet stove Pellet boiler Pellet furnace I am not sure Other (please specify)
12. If you do not currently heat with pellets, at what oil price would you consider converting to heating with pellets?
Not worth it $3.50 per gallon $4.00 per gallon $4.50 per gallon $5.00 and up I would think about I would definitely it install a system I'm not sure N/A
j k l m n j k l m n j k l m n j k l m n
13. If you do not currently heat with pellets, how likely would you be to switch to heating with pellets if the payback was:
Not likely Less than 3 years Less than 5 years Less than 7 years Somewhat likely Very likely I'm not sure N/A
14. If a pellet mill opened in Addison County would you be interested in buying pellets locally?
No Yes Maybe

15. If you were interested in buying pellets locally, where would you prefer to buy them? Check all that apply.
c d e f g c d e f g c d e f g c d e f g
Through a distributor (such as a hardware store), delivered Through the distributor (you pick up and possibly save money) Direct from the manufacturer (by the ton, you pick up and possibly save money) I am not interested in buying pellets locally
16. If you are interested in buying pellets locally, how would you prefer to purchase them? Check all that apply.
c d e f g c d e f g c d e f g c d e f g c d e f g
40-lb bag By the ton in 40-lb bags (1 ton on a pallet) In bulk bags (large sacks on a pallet) In bulk (loose), delivered to a holding bin I would not buy pellets locally
17. How important is it to you that your pellets are:

Not important Produced locally Harvested locally Harvested sustainably Somewhat important Very important I'm not sure N/A
18. What is your annual household income?

$0-14,999 $15,000-29,999 $30,000-49,999 $50,000-69,999 $70,000 or more
19. What is your level of education?

High school Some college Undergraduate degree Advanced degree

20. What is your age?
j k l m n j k l m n j k l m n j k l m n j k l m n j k l m n j k l m n
20-29 years 30-39 40-49 50-59 60-69 70-79 80 and over
21. How did you find out about this survey?

Announcment in the newspaper Email from Addison County Regional Planning Commission Email from Addison County Chamber of Commerce Email from Addison County Economic Development Corporation Other (please specify)
22. Other thoughts or comments?
23. In order to be entered into the raffle to win a free ton of pellets or a free cord of firewood, please enter your contact information below.
Name Street Address Town Email Phone Number

1. Commercial Market
The following survey is a part of a study being conducted by the Biomass Energy Resource Center for the Addison County Regional Planning Commission exploring the feasibility of a community-scale pellet fuel manufacturing business serving Addison County. If your business or facility is not in Addison County please do not fill out or submit a survey. Please only one survey entry per entity.
Confidentiality Statement The confidentiality of each survey respondent is of the utmost importance. All information submitted in the survey response will be kept confidential and will not be presented in a manner that reveals the respondents identity. To be entered into the raffle to win a free ton of pellets or a free cord or firewood, please fill out your contact information at the end of this survey.
1. Is your business located in Addison County?

j k l m n j k l m n
No Yes
If yes, which town?
2. What is the nature of your business?

Retail Light Manufacturing Agricultural / Silvicultural Service Other (please specify)
3. How many square feet of your facility are heated?

4. Which type of fuel did you heat your facility with last winter? Check all that apply.
c d e f g c d e f g c d e f g c d e f g c d e f g c d e f g c d e f g
Oil Propane Firewood Pellets Electric Solar Other (please specify)
5. How much of each fuel did you use for heating last year?
Oil (in gallons) Propane (in gallons) Firewood (in cords) Pellets (in tons) Electric (kWh) Other (give units)
6. What price did you pay last winter for your heating fuel(s)?
Oil (per gallon) Propane (gallon) Firewood (cord) Pellets (ton) Electric (kWh) Other (give unit)
7. If you heated with pellets last winter, where did you buy the pellets?
I did not heat with pellets Local hardware store Pellet stove dealer Local co-operative Other (please specify)

8. If you heated with pellets last winter, where did the pellets come from?
c d e f g c d e f g c d e f g c d e f g c d e f g c d e f g c d e f g c d e f g c d e f g c d e f g
I did not heat with pellets New England New York Pennsylvania Western US Quebec Canada (other than Quebec) I do not know where they came from I am not concerned with where they came from Other (please specify)
9. If you heat with pellets, how satisfied are you with your current supply of pellets?
Very Satisfied Overall, I am Satisfied Indifferent Not Satisfied I do not heat with pellets
j k l m n
j k l m n
j k l m n
j k l m n
j k l m n
Please share any comments on your satisfaction level.
10. If you do not currently heat with pellets, have you considered it?
j k l m n j k l m n
No Yes
11. If you have decided against heating with pellets, please give your reason in the space provided.

12. If you do not currently heat with pellets, but you have considered it, what type of appliance would you install?
j k l m n j k l m n j k l m n j k l m n j k l m n j k l m n
I have not considered it Pellet stove Pellet boiler Pellet furnace I am not sure Other (please specify)
13. If you do not currently heat with pellets, at what oil price would you consider converting to heating with pellets?
Not worth it $3.50 per gallon $4.00 per gallon $4.50 per gallon $5.00 and up I would think about I would definitely it install a system I'm not sure N/A
14. If you do not currently heat with pellets, how likely would you be to switch to heating with pellets if the payback was:
Not likely Less than 3 years Less than 5 years Less than 7 years Somewhat likely Very likely I am not sure N/A
15. If a pellet mill opened in Addison County would you be interested in buying pellets locally?
No Yes Maybe

16. If you are interested in buying pellets locally, where would you prefer to buy them? Check all that apply.
c d e f g c d e f g c d e f g c d e f g
Through a distributor (such as a hardware store), delivered Through a distributor (you pick up and possibly save money) Direct from the manufacturer (by the ton, you pick up and possibly save money) I'm not interested in buying pellets locally
17. If you are interested in buying pellets locally, how would you prefer to purchase them? Check all that apply.
c d e f g c d e f g c d e f g c d e f g c d e f g
40-lb bag By the ton in 40-lb bags (1 ton per pallet) In bulk bags (large sacks on a pallet) In bulk (loose), delivered to a holding bin I would not buy pellets locally
18. How important is it to you that your pellets are:

Not important Produced locally Harvested locally Harvested sustainably Somewhat important Very important I'm not sure N/A
19. Other thoughts or comments?
20. In order to be entered into the raffle to win a free ton of pellets or a free cord of firewood, please enter your contact information below.
Name Address Town Email Phone Number
APPENDIX K 3TPHOption Revenue Bulk Bags TOTALREVENUE Expenses WoodPurchased Labor Benefits,fringe,etc. Insurance Electric Equip.Maint.&Repair PrintedBags&PackagingSupplies ProductDistribution Advertising InterestonDebt Depreciation Misc. TOTALEXPENSE PROFIT/(Loss)BeforeTaxes Taxes(Federal&Vermont) Profit/(Loss)AfterTaxes Cummulative NetCashFlow 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
$ 720,000.00 $745,200.00 $771,282.00 $ 798,276.87 $826,216.56 $ 855,134.14 $ 885,063.83 $916,041.07 $948,102.51 $ 981,286.09 $2,538,000.00 $2,626,830.00 $2,718,769.05 $ 2,813,925.97 $ 2,912,413.38 $ 3,014,347.84 $ 3,119,850.02 $ 3,229,044.77 $3,342,061.34 $ 3,459,033.48 $3,258,000.00 $3,372,030.00 $3,490,051.05 $ 3,612,202.84 $ 3,738,629.94 $ 3,869,481.98 $ 4,004,913.85 $ 4,145,085.84 $ 4,290,163.84 $ 4,440,319.58
$1,008,000.00 $ 604,800.00 $ 151,200.00 $25,000.00 $ 396,000.00 $ 100,000.00 $ 216,000.00 $ 216,000.00 $15,000.00 $ 230,079.96 $ 259,261.90 $50,000.00
$1,043,280.00 $625,968.00 $156,492.00 $ 25,875.00 $409,860.00 $103,500.00 $223,560.00 $223,560.00 $ 15,525.00 $212,497.98 $259,261.90 $ 51,750.00
$1,079,794.80 $647,876.88 $161,969.22 $26,780.63 $424,205.10 $107,122.50 $231,384.60 $231,384.60 $16,068.38 $193,645.01 $259,261.90 $53,561.25
$ 1,117,587.62 $ 670,552.57 $ 167,638.14 $ 27,717.95 $ 439,052.28 $ 110,871.79 $ 239,483.06 $ 239,483.06 $ 16,630.77 $ 173,429.15 $ 259,261.90 $ 55,435.89
$ 1,156,703.18 $694,021.91 $173,505.48 $ 28,688.08 $454,419.11 $114,752.30 $247,864.97 $247,864.97 $ 17,212.85 $151,751.88 $259,261.90 $ 57,376.15
$ 1,197,187.80 $ 718,312.68 $ 179,578.17 $29,692.16 $ 470,323.78 $ 118,768.63 $ 256,540.24 $ 256,540.24 $17,815.29 $ 128,507.56 $ 259,261.90 $59,384.32
$ 1,239,089.37 $ 743,453.62 $ 185,863.41 $30,731.38 $ 486,785.11 $ 122,925.53 $ 265,519.15 $ 265,519.15 $18,438.83 $ 103,582.91 $ 259,261.90 $61,462.77
$ 1,282,457.50 $769,474.50 $192,368.62 $31,806.98 $503,822.59 $127,227.93 $274,812.32 $274,812.32 $19,084.19 $76,856.46 $259,261.90 $63,613.96
$1,327,343.51 $796,406.11 $199,101.53 $32,920.23 $521,456.38 $131,680.90 $284,430.75 $284,430.75 $19,752.14 $48,197.94 $259,261.90 $65,840.45
$ 1,373,800.53 $ 824,280.32 $ 206,070.08 $ 34,072.43 $ 539,707.35 $ 136,289.74 $ 294,385.83 $ 294,385.83 $ 20,443.46 $ 17,467.70 $ 259,261.90 $ 68,144.87
$3,271,341.86 $3,351,129.89 $3,433,054.86 $ 3,517,144.18 $ 3,603,422.77 $ 3,691,912.77 $ 3,782,633.14 $ 3,875,599.27 $ 3,970,822.59 $ 4,068,310.05 $(13,341.86) $20,900.11 $56,996.19 $ 95,058.66 $ 135,207.16 $ 177,569.21 $ 222,280.72 $269,486.57 $319,341.25 $ 372,009.53 $(6,812.38) $8,407.55 $23,748.38 $ 39,924.93 $ 56,988.04 $74,991.92 $93,994.31 $114,056.79 $135,245.03 $ 157,629.05 $(6,529.48) $ 12,492.57 $33,247.81 $ 55,133.73 $ 78,219.12 $ 102,577.30 $ 128,286.41 $155,429.78 $184,096.22 $ 214,380.48 $(6,529.48) $5,963.09 $39,210.90 $ 94,344.63 $172,563.74 $ 275,141.04 $ 403,427.46 $558,857.23 $742,953.45 $ 957,333.93 $ 252,732.43 $271,754.47 $292,509.71 $ 314,395.63 $337,481.02 $ 361,839.20 $ 387,548.32 $414,691.68 $443,358.13 $ 473,642.39
APPENDIX L 6TPHOption Revenue Bulk Bags TOTALREVENUE Expenses WoodPurchased Labor Benefits,fringe,etc. Insurance Electric Equip.Maint.&Repair PrintedBags&PackagingSupplies ProductDistribution Advertising InterestonDebt Depreciation Misc. TOTALEXPENSE PROFIT/(Loss)BeforeTaxes Taxes(Federal&Vermont) Profit/(Loss)AfterTaxes Cummulative NetCashFlow 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
$1,440,000.00 $1,490,400.00 $1,542,564.00 $ 1,596,553.74 $ 1,652,433.12 $ 1,710,268.28 $ 1,770,127.67 $ 1,832,082.14 $1,896,205.01 $ 1,962,572.19 $5,076,000.00 $5,253,660.00 $5,437,538.10 $ 5,627,851.93 $ 5,824,826.75 $ 6,028,695.69 $ 6,239,700.04 $ 6,458,089.54 $6,684,122.67 $ 6,918,066.97 $6,516,000.00 $6,744,060.00 $6,980,102.10 $ 7,224,405.67 $ 7,477,259.87 $ 7,738,963.97 $ 8,009,827.71 $ 8,290,171.68 $ 8,580,327.68 $ 8,880,639.15
$1,958,400.00 $1,036,800.00 $ 259,200.00 $50,000.00 $ 792,000.00 $ 200,000.00 $ 378,000.00 $ 432,000.00 $28,000.00 $ 338,298.49 $ 375,357.14 $75,000.00
$2,026,944.00 $1,073,088.00 $268,272.00 $ 51,750.00 $819,720.00 $207,000.00 $391,230.00 $447,120.00 $ 28,980.00 $312,446.80 $375,357.14 $ 77,625.00
$2,097,887.04 $1,110,646.08 $277,661.52 $53,561.25 $848,410.20 $214,245.00 $404,923.05 $462,769.20 $29,994.30 $284,726.29 $375,357.14 $80,341.88
$ 2,171,313.09 $ 1,149,518.69 $ 287,379.67 $ 55,435.89 $ 878,104.56 $ 221,743.58 $ 419,095.36 $ 478,966.12 $ 31,044.10 $ 255,001.87 $ 375,357.14 $ 83,153.84
$ 2,247,309.04 $ 1,189,751.85 $297,437.96 $ 57,376.15 $908,838.22 $229,504.60 $433,763.69 $495,729.94 $ 32,130.64 $223,128.66 $375,357.14 $ 86,064.23
$ 2,325,964.86 $ 1,231,393.16 $ 307,848.29 $59,384.32 $ 940,647.55 $ 237,537.26 $ 448,945.42 $ 513,080.48 $33,255.22 $ 188,951.33 $ 375,357.14 $89,076.47
$ 2,407,373.63 $ 1,274,491.92 $ 318,622.98 $61,462.77 $ 973,570.22 $ 245,851.07 $ 464,658.51 $ 531,038.30 $34,419.15 $ 152,303.33 $ 375,357.14 $92,194.15
$ 2,491,631.71 $ 1,319,099.14 $329,774.78 $63,613.96 $ 1,007,645.18 $254,455.85 $480,921.56 $549,624.64 $35,623.82 $113,006.03 $375,357.14 $95,420.94
$2,578,838.82 $1,365,267.61 $341,316.90 $65,840.45 $1,042,912.76 $263,361.81 $497,753.82 $568,861.50 $36,870.65 $70,867.94 $375,357.14 $98,760.68
$ 2,669,098.18 $ 1,413,051.98 $ 353,262.99 $ 68,144.87 $ 1,079,414.70 $ 272,579.47 $ 515,175.20 $ 588,771.66 $ 38,161.13 $ 25,683.67 $ 375,357.14 $ 102,217.30
$5,923,055.63 $6,079,532.95 $6,240,522.95 $ 6,406,113.91 $ 6,576,392.12 $ 6,751,441.52 $ 6,931,343.17 $ 7,116,174.77 $ 7,306,010.08 $ 7,500,918.29 $ 592,944.37 $664,527.05 $ 739,579.15 $818,291.77 $ 900,867.75 $ 987,522.45 $ 1,078,484.54 $ 1,173,996.91 $ 1,274,317.61 $ 1,379,720.87 $ 251,526.36 $281,949.00 $313,846.14 $ 347,299.00 $382,393.79 $ 419,222.04 $ 457,880.93 $498,473.69 $541,109.98 $ 585,906.37 $ 341,418.01 $382,578.06 $ 425,733.01 $470,992.76 $ 518,473.96 $ 568,300.41 $ 620,603.61 $675,523.22 $733,207.63 $ 793,814.50 $ 341,418.01 $723,996.07 $1,149,729.08 $ 1,620,721.84 $ 2,139,195.80 $ 2,707,496.21 $ 3,328,099.82 $ 4,003,623.04 $4,736,830.66 $ 5,530,645.16 $ 716,775.15 $757,935.20 $801,090.15 $ 846,349.91 $893,831.10 $ 943,657.55 $ 995,960.75 $ 1,050,880.36 $1,108,564.77 $ 1,169,171.64
APPENDIX M 12TPHOption Revenue Bulk Bags TOTALREVENUE Expenses WoodPurchased Labor Benefits,fringe,etc. Insurance Electric Equip.Maint.&Repair PrintedBags&PackagingSupplies ProductDistribution Advertising InterestonDebt Depreciation Misc. TOTALEXPENSE PROFIT/(Loss)BeforeTaxes Taxes(Federal&Vermont) Profit/(Loss)AfterTaxes Cummulative NetCashFlow 2010 2011 2012 $3,085,128.00 $10,875,076.20 $13,960,204.20 $ $ $3,948,963.84 $1,665,969.12 $416,492.28 $101,766.38 $1,542,564.00 $267,806.25 $740,430.72 $925,538.40 $42,849.00 $414,714.16 $533,238.10 $107,122.50 2013 $ 3,193,107.48 $ 11,255,703.87 $ 14,448,811.35 $ $ $ 4,087,177.57 $ 1,724,278.04 $ 431,069.51 $ 105,328.20 $ 1,596,553.74 $ 277,179.47 $ 766,345.80 $ 957,932.24 $ 44,348.72 $ 371,419.45 $ 533,238.10 $ 110,871.79 2014 $ 3,304,866.24 $ 11,649,653.50 $ 14,954,519.74 $ $ $ 4,230,228.79 $ 1,784,627.77 $446,156.94 $109,014.69 $ 1,652,433.12 $286,880.75 $793,167.90 $991,459.87 $ 45,900.92 $324,994.97 $533,238.10 $114,752.30 2015 $ 3,420,536.56 $ 12,057,391.37 $ 15,477,927.94 $ $ $ 4,378,286.80 $ 1,847,089.74 $ 461,772.44 $ 112,830.20 $ 1,710,268.28 $ 296,921.58 $ 820,928.77 $ 1,026,160.97 $47,507.45 $ 275,214.46 $ 533,238.10 $ 118,768.63 2016 $ 3,540,255.34 $ 12,479,400.07 $ 16,019,655.41 $ $ $ 4,531,526.84 $ 1,911,737.88 $ 477,934.47 $ 116,779.26 $ 1,770,127.67 $ 307,313.83 $ 849,661.28 $ 1,062,076.60 $49,170.21 $ 221,835.31 $ 533,238.10 $ 122,925.53 2017 $ 3,664,164.28 $ 12,916,179.08 $ 16,580,343.35 $ $ $ 4,690,130.27 $ 1,978,648.71 $494,662.18 $120,866.53 $ 1,832,082.14 $318,069.82 $879,399.43 $ 1,099,249.28 $50,891.17 $164,597.38 $533,238.10 $127,227.93 2018 $3,792,410.03 $13,368,245.34 $17,160,655.37 $ $ $4,854,284.83 $2,047,901.41 $511,975.35 $125,096.86 $1,896,205.01 $329,202.26 $910,178.41 $1,137,723.01 $52,672.36 $103,221.72 $533,238.10 $131,680.90 2019 $ 3,925,144.38 $13,836,133.93 $17,761,278.31 $ $ $ 5,024,184.80 $ 2,119,577.96 $ 529,894.49 $ 129,475.25 $ 1,962,572.19 $ 340,724.34 $ 942,034.65 $ 1,177,543.31 $ 54,515.89 $ 37,409.20 $ 533,238.10 $ 136,289.74
$2,880,000.00 $2,980,800.00 $10,152,000.00 $10,507,320.00 $13,032,000.00 $13,488,120.00 $ $ $3,686,400.00 $3,815,424.00 $1,555,200.00 $1,609,632.00 $ 388,800.00 $402,408.00 $95,000.00 $ 98,325.00 $1,440,000.00 $1,490,400.00 $ 250,000.00 $258,750.00 $ 691,200.00 $715,392.00 $ 864,000.00 $894,240.00 $40,000.00 $ 41,400.00 $ 492,744.00 $455,090.08 $ 533,238.10 $533,238.10 $ 100,000.00 $103,500.00
$10,136,582.10 $ 10,417,799.18 $10,707,454.74 $ 11,005,742.62 $ 11,312,856.12 $ 11,628,987.41 $ 11,954,326.98 $ 12,289,062.93 $12,633,380.22 $ 12,987,459.92 $2,895,417.90 $3,070,320.82 $3,252,749.46 $ 3,443,068.73 $ 3,641,663.63 $ 3,848,940.52 $ 4,065,328.43 $ 4,291,280.42 $ 4,527,275.15 $ 4,773,818.39 $ 983,967.09 $1,043,434.08 $1,105,459.82 $ 1,170,168.37 $ 1,237,690.63 $ 1,308,164.78 $ 1,381,736.67 $ 1,458,560.34 $1,538,798.55 $ 1,622,623.25 $1,911,450.81 $2,026,886.74 $2,147,289.64 $ 2,272,900.36 $ 2,403,972.99 $ 2,540,775.74 $ 2,683,591.76 $ 2,832,720.08 $2,988,476.60 $ 3,151,195.14 $1,911,450.81 $3,938,337.56 $6,085,627.20 $ 8,358,527.56 $ 10,762,500.55 $ 13,303,276.30 $ 15,986,868.06 $ 18,819,588.14 $21,808,064.74 $24,959,259.88 $2,444,688.91 $2,560,124.84 $2,680,527.74 $ 2,806,138.45 $ 2,937,211.09 $ 3,074,013.84 $ 3,216,829.86 $ 3,365,958.18 $3,521,714.69 $ 3,684,433.23
APPENDIX N FirstYearBalanceSheetConceptualPelletMillBusiness 3TPH 6TPH Assets CurrentAssets AcountsRecievables Inventory Cash LongtermAssets Land Building Equipment LessAccumulatedDepreciation TOTALASSETS Liabilities CurrentLiabilities Accountspayable(includespayroll)
12TPH
$28,800 $ 57,600 $ 115,200 $ 313,080 $ 589,416 $ 1,060,813 $ 134,487 $ 917,207 $ 3,547,551
$ 250,000 $ 1,540,000 $ 1,835,000 $ (259,262)
$ 350,000 $ 2,100,000 $ 2,695,000 $ (375,357)
$ 525,000 $ 2,800,000 $ 3,830,000 $ (533,238)
$ 3,842,105 $6,333,866 $ 11,345,326
$ 271,275 $ 492,109 $ 843,685
LongtermLiabilities DebtServicetoBank OwnerEquity TOTALLIABILITIES
$ 3,153,711 $ 4,637,065 $ 6,754,052 $ 417,119 $ 1,204,692 $ 3,747,589 $ 3,842,105 $6,333,866 $ 11,345,326
APPENDIX O Pellet Mill Equipment Manufacturers

ListofPelletMillEquipmentManufacturers EquipmentCapacity DieSpecifications Ringdie 0.2to20TPH Ringdie Upto45TPH Ranges Unknown 0.2to3TPH n/a 0.5to15TPH 0.2to0.77TPH n/a Pneumaticgearmotor drivesystem n/a Ringdie Flatdieandringdie Doublediesystemwith satelliterollers Matrix
Company AndritzSprout AnyangGeneral International BlissIndustries,Inc. CaliforniaPelletMill ComactEquipment GEMCOEnergyMachinery Co. PelHeat PelletSystems International SwedenPowerChippers AB
Phone (800)4468629 (86)3725965148 (580)7657787 (800)4280846 (418)2288911 (86)3725080869 (506)5752231 4633239790
APPENDIX P List of Pellet Fuel Retailers and Distributors in Addison County

ListofPelletDealersinAddisonCounty,Vermont CompanyName Town PhoneNumber AcornEnergyCoOp Middlebury (802)3851911 Agway Middlebury (802)3884937 AubuchonHardware Middlebury (802)3881400 AubuchonHardware Vergennes (802)8776700 BenoitTrucking Bridport (802)7582555 BordeauBrothers Middlebury (802)3887000 Seymour GoodrowTrueValue Middlebury (802)3884915 Lumber MartinsHardware Bristol (802)4533617 MartinsHardware Middlebury (802)3889500 ParisFarmersUnion Middlebury (802)3883139 RKMiles Middlebury (802)3882721 TetonWestLumber(a Middlebury (802)3828858 distributortoarea retailers)
Page
PO Box 1 6 1 1 , Montpe lie r, VT 05601-1611 ph 8 0 2 -2 2 3 -7 7 7 0 x 1 2 1 f ax 8 0 2-223-7772 info@biomasscenter.org www.biomasscenter.org

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Addison County Pellet Feasibility Study

Addison County Pellet Feasibility Study

BERC Final Report on Addison County Pellet Feasibility Study

BERC Final Report on Addison County Pellet Feasibility Study

BERC Final Report on Addison County Pellet Feasibility Study

Pellet Mill Size Small Medium Large

BERC Final Report on Addison County Pellet Feasibility Study

BERC Final Report on Addison County Pellet Feasibility Study

2.0 Study Scope

BERC Final Report on Addison County Pellet Feasibility Study

BERC Final Report on Addison County Pellet Feasibility Study

BERC Final Report on Addison County Pellet Feasibility Study

4.0 Introduction to Pellets

BERC Final Report on Addison County Pellet Feasibility Study

BERC Final Report on Addison County Pellet Feasibility Study

6-8mm 6-8mm 6-8mm

6-8mm and larger

BERC Final Report on Addison County Pellet Feasibility Study

BERC Final Report on Addison County Pellet Feasibility Study

5.0 Wood Fiber Assessment for Addison County

BERC Final Report on Addison County Pellet Feasibility Study

Addison County Solid Waste District 2007 Annual Report.

BERC Final Report on Addison County Pellet Feasibility Study

BERC Final Report on Addison County Pellet Feasibility Study

BERC Final Report on Addison County Pellet Feasibility Study

BERC Final Report on Addison County Pellet Feasibility Study

BERC Final Report on Addison County Pellet Feasibility Study

BERC Final Report on Addison County Pellet Feasibility Study

BERC Final Report on Addison County Pellet Feasibility Study

BERC Final Report on Addison County Pellet Feasibility Study

Bole is the main stem or trunk of a tree.

BERC Final Report on Addison County Pellet Feasibility Study

BERC Final Report on Addison County Pellet Feasibility Study

BERC Final Report on Addison County Pellet Feasibility Study

BERC Final Report on Addison County Pellet Feasibility Study

BERC Final Report on Addison County Pellet Feasibility Study

BERC Final Report on Addison County Pellet Feasibility Study

BERC Final Report on Addison County Pellet Feasibility Study

BERC Final Report on Addison County Pellet Feasibility Study

BERC Final Report on Addison County Pellet Feasibility Study

Figure 21. Moderate Assessment of Regional Net Available Low-Grade Wood

BERC Final Report on Addison County Pellet Feasibility Study

BERC Final Report on Addison County Pellet Feasibility Study

BERC Final Report on Addison County Pellet Feasibility Study

Figure 22. Itemized Production Cost of Low-Grade Roundwood

BERC Final Report on Addison County Pellet Feasibility Study

BERC Final Report on Addison County Pellet Feasibility Study

BERC Final Report on Addison County Pellet Feasibility Study

BERC Final Report on Addison County Pellet Feasibility Study

6.0 Agricultural Fiber Assessment for Addison County

BERC Final Report on Addison County Pellet Feasibility Study

USDA 2002 Census of Agriculture.

BERC Final Report on Addison County Pellet Feasibility Study

BERC Final Report on Addison County Pellet Feasibility Study

BERC Final Report on Addison County Pellet Feasibility Study

Figure 26 (opposite page).

Total and Functional Agricultural Land (in acres)

BERC Final Report on Addison County Pellet Feasibility Study

BERC Final Report on Addison County Pellet Feasibility Study

Figure 27 (top). Figure 28 (bottom).

BERC Final Report on Addison County Pellet Feasibility Study

BERC Final Report on Addison County Pellet Feasibility Study

BERC Final Report on Addison County Pellet Feasibility Study