The majority owner of an Orrington plant that burns trash to generate electricity said Friday that it plans to build a $15 million facility on the same property that will help prepare Maine wood chips to be exported to Europe for use as biofuel.
USA Energy Group has formed a new company that will use electricity and steam generated by the Penobscot Energy Recovery Company plant to kill pathogens in the wood chips before they are shipped abroad, said Vice President Robert Knudsen. The new operation, New England Woodchip Solutions, is expected to initially employ 24 people.
It is meant to meet new demand for renewable fuels in the European Union, which recently directed that at least 32 percent of its energy be generated from renewable sources. After next year, the EU has also directed that all wood chips burned by its countries be cleaned without chemicals and without burning fossil fuels, according to Knudsen.
“Maine has plenty of wood fiber that can be used for chips, and the PERC plant has the space we need as well as the ability to generate on site the large amounts of electricity and steam heat that the phytosanitation process requires,” Knudsen said.
The announcement comes as PERC has been making a series of other changes that are meant to ensure its long-term viability after it reached the end of a lucrative power-purchase agreement with Emera Maine in 2018 and more than 100 communities decided to send their trash to a new competitor, the Coastal Resources of Maine plant that Fiberight has built in Hampden.
PERC has adapted to its new circumstances by laying off about a fifth of its staff and investing more than $2 million into new grinders that have cut its operating costs and allowed it to convert a larger portion of waste into energy.
In its new venture, USA Energy has partnered with another Maine-based entity that will supply and find buyers for the wood chips, according to Ted O’Meara, a spokesman for USA Energy. If the partner — whom O’Meara declined to identify — can secure long-term contracts with power plants and utilities in Europe, he estimated the new Orrington facility could open for business in early 2021.
The partner will also need to identify wood suppliers in Maine. Knudsen said the chips are expected to come from low-value fiber — such as from treetops and branches — that is not used by paper and lumber mills.
USA Energy has identified a company that specializes in industrial drying systems, Thompson Dryers, to construct the plant. It hopes to break ground early next year on 30,000 square feet that are leased from PERC, according to Knudsen. He said the plant will be able to treat 300,000 tons of wood chips annually and have enough space to add a second sanitation system if the demand arises.
Besides sanitizing the chips, the new plant will also package them into one-ton bales. The bales will then be trucked about 24 miles south to Searsport, where they will be loaded onto cargo ships bound for Europe.
USA Energy owns a majority stake in the PERC plant. Its other owners, PERC Holdings and several Maine communities, are not involved with the new company.