Enviva Inc
We are the worlds largest supplier by production capacity of utility-grade
wood pellets to major power generators. Since our entry into this business in
2010, we have executed multiple long-term, take-or-pay off-take contracts with
utilities and large scale power generators and have built and acquired the production
and terminaling capacity necessary to serve them. Our existing production constitutes
approximately 14% of current global utility-grade wood pellet production capacity
and the product we deliver to our customers typically comprises a material portion
of their fuel supply. We own and operate six industrial-scale production plants
in the Southeastern United States that have a combined wood pellet production
capacity of 2.8 million metric tons per year ("MTPY"). Four of our
production plants are new facilities that we constructed using our templated
design and standardized equipment. A fifth plant, our largest in terms of production
capacity, has been in operation since 2008. We also own a dry-bulk, deep-water
marine terminal at the Port of Chesapeake (the "Chesapeake terminal")
that reduces our storage and shiploading costs and enables us to reliably supply
our customers. All of our facilities are located in geographic regions with
low input costs and favorable transportation logistics. Owning these cost-advantaged,
fully-contracted assets in a rapidly expanding industry provides us with a platform
to generate stable and growing cash flows that we anticipate will enable us
to increase our per-unit cash distributions over time, which is our primary
business objective.
Our principal product, utility-grade wood pellets, is a globally traded energy
commodity that is used as a substitute for coal in both dedicated and co-fired
power generation and combined heat and power plants. It enables major power
generators to profitably generate electricity in a manner that reduces the overall
cost of compliance with mandatory GHG emissions limits and renewable energy
targets while also allowing countries to diversify their sources of electricity
supply.
Unlike intermittent sources of renewable generation like wind and solar power,
wood pellet-fired plants are capable of meeting baseload electricity demand
and are dispatchable (that is, power output can be switched on or off or adjusted
based on demand). As a result, utilities and major power generators in Europe
and Asia have made and continue to make long-term, profitable investments in
power-plant conversions and new builds of generating assets that either co-fire
wood pellets with coal or are fully dedicated wood pellet-fired plants. Such
developments help generators in European and Asian markets maintain and increase
baseload generating capacity, comply with binding climate change regulations
and other emissions reduction targets and increase renewable energy usage at
a lower cost to consumers and taxpayers than other forms of energy generation.
The capital costs required to convert a coal plant to co-fire biomass, or
to burn biomass exclusively, are a fraction of the capital costs associated
with implementing offshore wind and most other renewable technologies. Furthermore,
the relatively quick process of converting coal-fired plants to biomass-fired
generation is an attractive benefit for power generators whose generation assets
are no longer viable as coal plants due to the expiration of operating permits
or the introduction of taxes or other restrictions on fossil fuel usage or emissions
of GHGs and other pollutants.
There also continues to be significant growth in the European and Asian demand
for wood pellets as the preferred fuel source and lower-cost alternative to
delivered fossil fuels for district heating loops, for heating homes and commercial
buildings and for the production of process heat at industrial sites. Increasingly,
wood pellets are also being sought as a raw material input for bio-based substitutes
for traditional fossil fuel-based fuels and chemicals. As these markets further
develop, there will continue to be opportunities for utility-grade wood pellet
producers to serve this growing demand.