Biomass company 
poised for $1M expansion

Monadnock Ledger-Transcript
Last modified: 12/30/2015 5:57:19 PM
Froling Energy wants to expand and automate its facilities at 590 Hancock Road in order to meet the growing demand for dry wood chips, and is counting on a $150,00 grant from the N.H. Public Utilities Commission to help cover the cost of the $1 million upgrade.

The chips can be burned in dual biomass boilers — meaning they burn wood chips as well as pellets — available for commercial-size systems, but Froling Energy is the only company around selling the new fuel.

“We started this market to take advantage of these dual boilers,” said President Mark Froling, which mainly come from Austria.

This winter Froling Energy expects to process 1,500 to 2,000 tons of what they call Precision Dry Wood Chips, or PDCs, for three customers heating with the new fuel: Xylogen’s system at High Mowing in Wilton, Stevens High School in Claremont and Whelen Engineering in Charlestown. With the facility upgrade, Froling Energy could process up to 10,000 tons or more.

In the 50-mile radius its trucks deliver, Froling Energy sees plenty of opportunity to expand the customer base for its PDCs, which includes towns, schools, churches and commercial operations.

“The concept of a dry wood chip is common in Austria and other northern European nations, but not here,” explains Jim Van Valkenburgh, vice president of sales and marketing at Froling Energy. “It is their biomass boilers that were first developed to burn them.”

Van Valkenburgh continued, “Froling Energy decided to call them PDCs, verifying that these are dry hardwood chips that are screened to eliminate oversized chips that could clog up augers and boilers, and are dried to between 25 and 30 percent moisture. Beyond that, by giving them a name we are assuring buyers that these have been processed with a solid level of intentional quality control.”

Selling, installing and servicing pellet boilers has been Froling Energy’s focus, but in 2016 Froling said he expects the company’s revenue from chip boilers to surpass that of pellet boilers.

Even with the drop in heating oil prices, the market for biomass continues to grow, Froling said. “Our prices are yet cheaper than that,” he said. “There’s a lot of pressure that will come from the top to lower the carbon footprint.”

The Paris Agreement on climate change is a sign of things to come, he said, noting companies are anticipating a carbon tax at some point.

While pellets are currently priced on par with heating oil prices at a $2 a gallon equivalent, PDCs are at approximately $1.5 a gallon equivalent. Still, the wood chip biomass systems are not ideal for every situation in terms of installation, and they’re better suited for replacing systems that consume 20,000 to 30,000 gallons of oil or more, Van Valkenburgh noted.

Froling Energy employs nine year-round and up to 18 at the height of the construction season. Those numbers could swell if expansion plans proceed according to plan.

REC certificates

The PUC sought grant applications this year for thermal renewable energy projects, announcing in September it had about $750,000 in Renewable Energy Funds available. The purpose of the REF is to support thermal and electric renewable energy initiatives in New Hampshire. The goals is to increase the supply of New Hampshire certified Renewable Energy Certificates, or RECs.

“This money is given out to generate renewable energy certificates,” Froling said.

As the PUC’s September request for proposals explains, “Enacted in 2007, the law requires electricity suppliers to obtain a portion of their electricity from renewable energy sources. Renewable energy requirements are spread across four classes of renewable energy. Eligible technologies for the four classes are set forth in RSA 362-F:4. Legislation enacted in 2012, added a Class I sub-class for useful thermal renewable energy.”

To be eligible for the grant, applicants have to show their projects will result in the creation of new RECs. By increasing the number of RECs, the PUC hopes to drive the price for them down.

“What is unique about the proposal that we submitted in September is that not only will we be burning biomass fuel, PDCs, to create a new biomass fuel, PDCs, which is a requirement of the grant, but we will be making available in increasing quantities, a new, cleaner, more cost-effective fuel to schools and commercial businesses, which furthers the goals of this grant program,” Van Valkenburgh said. And they’ll be producing RECs at the same time.

The PUC is expected to announce grant awards early in the New Year.

How Froling Energy got to this point

Mark Froling has been working in the biomass industry in New Hampshire for years, first as a general contractor working under the company Froling LLC. He built, for example, an expansion of the New England Wood Pellet production plant in Jaffrey. “It was me and [NEWP founder] Steve Walker and a napkin,” Froling recalled, then he built the NEWP’s New York plant.

Froling, Walker and others started the company Propell with the idea of increasing demand for pellets in selling commercial and industrial-size boilers. The company was eventually sold to a Massachusetts company.

“I did my own boiler sales after that,” Froling said.

In 2008 Froling started Froling Energy, transitioning from a general contractor to a mechanical contractor so he could install boiler systems.

There’s a lot of vetting of technology in the biomass industry, Froling noted, but his company has really gotten to know the European manufacturers of boilers, as well as the distributors Froling buys the boilers from. There are number of experienced companies, “but still there are hurdles,” Froling said. That’s because the U.S. market is different, with different water temperatures and different volts, among other things.

Between 2010 and 2012, fuel oil prices began dropping and that got the entire industry’s attention. “That put a lot of pressure on us to increase savings,” Froling said. “The only way people switch to our fuel is through savings.” At the same time, European vendors made dual fuel boilers available, and Froling began selling them, first to Whelen Engineering in 2013, but there were no dry chips available. By 2014, Froling had a new product to offer: PDCs.

“This is a new step for us,” Froling said, noting that up until this point 95 percent of the boilers they’ve sold have been pellet boilers. By next year, Froling Energy will need to make 4,000 tons of chips to meet the demand. “Without the grant money, it’s going to be very difficult to meet the demand,” Froling said, noting there’s a lot riding on the grant. “More than I want to admit.”

The possibilities for expansion are exciting, but there’s a lot on the line, too. “It’s real risk,” Froling said. “But somehow we’ve made it, and strangely we’re a leader in this technology and this field.”

Part of Froling Energy’s success along the way is meeting key people who saw the vision. Peterborough Town Administrator Rodney Bartlett and Assistant Town Administrator Nicole MacStay are two such people, Froling said. “They bought into it, they bought into a local company doing it,” he said, referring to the pellet boiler the town commissioned Froling to install at the Peterborough Town house in 2011.

“Heat local,” Froling said, reciting their motto. “You’re keeping all the dollars circulating locally.”

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