When Blue Mountain Lumber (BML) looked to expand their Southland sawmill in 2000, the company faced the question of whether to undertake the upgrade of its energy systems itself or to outsource the entire energy supply problem.
Outsourcing was considered the best solution to reduce capital expenditure risks, finance expenses and the need to source technical expertise.
EFI manages new facility
BML and Energy for Industry formed a BOOT type Energy Partnership in which Energy for Industry financed, built and managed the new energy facility necessary to support BML's expansion plans.
Energy for Industry was responsible for supplying the company with steam for its 10 drying kilns, incinerating surplus wood residue to supply electricity from the on-site cogeneration turbine and managing BML's water treatment plant.
The energy centre consists of a 10 MWth steam boiler fuelled by sawmill wood residues and a 1.4 MWe steam turbine generator which utilises surplus steam for electricity generation.
10% saving energy
In addition the implementation of an integrated kiln and boiler management system cut a further 10 percent off energy costs.
The partnership also provided for the supply of imported electricity to the sawmill and provision for Energy for Industry to identify and take up performance contracting opportunities at the sawmill site.
"Outsourcing your energy facility ownership and energy supply is a relatively new idea for New Zealand, but the concept has worked exceptionally well for BML," said BML General Manager Matt Hitchings.
While the energy centre was sized at the time of its development to meet the mill's expansion plans, more recent trading conditions have resulted in a restructuring of the sawmilling business by BML and its parent company, Ernslaw One. This resulted in a consolidation and downsizing of production at the mill. As a means of recapitalising the operation Ernslaw One has purchased the energy centre from Energy for Industry. This change in ownership became effective from 31 January 2006.
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