Further evidence of big business confidence in the wood energy market has come in the form of major investment in the sector by one of the UK’s leading haulage companies, as well as new biomass power and pellet plant ventures.
Transport and logistics giant Eddie Stobart has set up a 50/50 joint venture with AW Jenkinson Forest Products (AWJFP) to “source and distribute biomass fuel to the UK renewable energy market”.
The company has put £30m into the new transport business, Eddie Stobart Biomass Products Ltd (SBPL), and expects the operation to be generating £30m a year in three years’ time, based on projections that the “renewable energy market is set to grow ten-fold in the same period”.
Currently AWJFP is market leader in UK wood-related biomass, collecting, processing and distributing over 2.5 million tonnes a year.
The company has additionally signed a ‘major transportation’ contract with Stobart, expected to produce £19.5m profit for the latter in the first five years.
Effectively this means Stobart will be handling haulage for AWJFP, said spokesperson Glenn Patterson. “The logic is that it will benefit from our greater scale and logistics expertise,” he said.
Under the arrangement, he added, AWFJP-liveried trucks will continue for the time-being to run alongside SBPL vehicles. Between them, they are expected to double their current biomass deliveries to 2,000 a day.
AWFJP owner Allan Jenkinson described the tie-up with Stobart as “the perfect partnership” enabling it to “capitalise on the huge growth in energy generation from renewable sources”.
Stobart also predicts that imported wood and other materials will play an increasingly important role in the UK biomass market “which could lead to further synergies with Stobart Ports and Rail divisions”.
Meanwhile, Helius Energy has received approval to build a 100Mwe power plant at Avonmouth Dock, which will use 850,000 tonnes of primarily wood-based fuel annually, and International Paper has joined with a consortium to turn its closed Inverurie mill into a £60m ‘green energy centre’, including a pellet production plant processing 250,000 tonnes of timber annually.
Guy Bewick of agent Pacific Lumber Services recently flagged up the increasing influence of biomass business on the wood market, predicting it could benefit the solid wood trade by freeing up pulp-type logs, increasing the likelihood that sawlogs would be harvested.
The panels sector remains concerned about biomass energy subsidies, which it says gives power companies an unfair advantage in raw material sourcing.
