Energy assets, usage, and costs of the North American pulp and paper industry

This study uses the power of the FisherSolve™ and BDA industry analysis to provide an in-depth assessment of energy assets, usage, and costs by major grade and North American region. Using detailed information on every North American mill’s energy related equipment, capabilities, cost, and production levels, this study provides an enlightening perspective on the industry and all aspects of energy usage. Specific analyses include:
¨ Detailed breakdown of energy assets such as boilers and turbines in terms of number, age, capacities, capabilities, description, and developmental opportunities
¨ Review of fuel and electricity usage and consumption levels by grade, region, mill type, and mill process area
¨ Assessment of fuel, power, and total energy costs by BTU and ton, energy costs by region and grade, total energy expenditures by type, region, and grade
¨ Identification of major energy saving opportunities, new processes and technologies being developed, forecasted energy asset rebuilds and replacements over the next five years, as well as other observations and conclusions relative to energy use. This data—intensive study analyzes the industry’s energy assets, capabilities, costs, and consumption levels in total and within key segments such as major grade category, geographic region, facility type, facility size, and mill process area. With this information, industry producers, suppliers, and investors can assess development opportunities, identify areas for improvement, establish relevant benchmarks, understand other industry changes and dynamics. Eighty charts and tables contained in
over 90 page s of text focus on providing quantitative analysis and breakdowns of a range of energy information as detailed below.

Table of Contents
1. Introduction ..................................................................................................................................................................... 6
A. Study Objective ............................................................................................................................................................. 6
B. Scope ............................................................................................................................................................................. 6
C. Methodology ................................................................................................................................................................. 7
D. Data Limitations and Liability ...................................................................................................................................... 8
E. BDA / Fisher International Qualifications ...................................................................................................................... 9
2. Executive Summary ...................................................................................................................................................... 10
A. Overall Observations and Conclusions ........................................................................................................................ 10
Energy Assets .................................................................................................................................................................. 11
C. Energy Sources and Consumption ............................................................................................................................... 12
D. Energy Costs ............................................................................................................................................................... 13
3. North American Industry Overview ............................................................................................................................. 14
A. US Manufacturing Industry Background ..................................................................................................................... 14
B. Pulp and Paper Perspective ......................................................................................................................................... 17
4. NA Paper Industry Asset Review ................................................................................................................................. 22
A. Energy Assets ............................................................................................................................................................. 22
B. Energy Process Overview ........................................................................................................................................... 22
C. Industry Process Equipment ....................................................................................................................................... 28
D. Boiler Equipment Details and Capabilities .................................................................................................................. 33
F. Turbine Equipment Details and Capabilities ................................................................................................................ 39
G. Equipment Related Observations and Conclusions ..................................................................................................... 51
5. Energy Sources and Consumption ............................................................................................................................... 52
A. US Paper industry Background ................................................................................................................................... 52
B. Industry Energy Consumption .................................................................................................................................... 53
C. Energy Consumption by Major Process ....................................................................................................................... 57
D. Energy Consumption Observations and Conclusions .................................................................................................. 62
6. Energy Spending and Costs .......................................................................................................................................... 64
A. Industry Spending Overview ...................................................................................................................................... 64
B. Industry Cost Structure ............................................................................................................................................... 65
C. Electricity Spending and Costs ................................................................................................................................... 73
D. Other Energy Related Costs ........................................................................................................................................ 74
E. Conclusions – Energy Costs ........................................................................................................................................ 80
7. Opportunities and implications .................................................................................................................................... 82
A. Future Development Opportunities .............................................................................................................................. 82
B. Implications of Energy for Industry Producers ............................................................................................................ 90
C. Implications for Industry Suppliers .............................................................................................................................. 91
8. Appendix ........................................................................................................................................................................ 92 FIGURE 3-1 ENERGY PURCHASES FOR THE TOP TEN INDUSTRIES
FIGURE 3-2 INDUSTRY ELECTRICITY EXPENDITURES
FIGURE 3-3 ELECTRICITY USAGE BY MAJOR INDUSTRIES
FIGURE 3-4 US INDUSTRY ELECTRICITY SALES
FIGURE 3-5 NA PRODUCTION CAPACITY - AREA
FIGURE 3-6 NA PRODUCTION CAPACITY - MAJOR GRADES
FIGURE 3-7 TONNAGE BY MAJOR GRADE AND NA REGION
FIGURE 3-8 INDUSTRY CASH COST STRUCTURE
FIGURE 4-1 NA PROCESS EQUIPMENT BY REGION AND TYPE
FIGURE 4-2 PROCESS EQUIPMENT BY SITE AND EQUIPMENT TYPE
FIGURE 4-3 ENERGY ASSET BREAKDOWN
FIGURE 4-4 AVERAGE TECHNICAL AGES OF MILL ASSETS
FIGURE 4-5 AGE RANGES FOR PROCESS EQUIPMENT
FIGURE 4-6 TOP ORIGINAL SUPPLIERS OF PROCESS EQUIPMENT
FIGURE 4-7 TOP 25 ORIGINAL / CURRENT EQUIPMENT SUPPLIERS
FIGURE 4-8 BOILER CAPACITY PROFILE BY REGION
FIGURE 4-9 BOILER CAPACITY DISTRIBUTION
FIGURE 4-10 BOILERS BY TYPE AND FUEL SOURCE
FIGURE 4-11 AVERAGE BOILER PSI INCREASE OVER TIME
FIGURE 4-12 BOILER INSTALLATION RATE SINCE 1900
FIGURE 4-13 BOILER REPLACEMENTS OVER NEXT FIVE YEARS
FIGURE 4-14 POWER SELF SUFFICIENCY - BY AREA
FIGURE 4-15 POWER SELF SUFFICIENCY - BY MAJOR GRADE
FIGURE 4-16 POWER GENERATION CAPACITY BY GRADE / REGION
FIGURE 4-17 POWER SELF SUFFICIENCY - MILL DISTRIBUTION
FIGURE 4-18 TURBINE CAPACITY BY EQUIPMENT TYPE
FIGURE 4-19 TURBINE CAPACITY BY REGION AND FUEL TYPE
FIGURE 4-20 TURBINE CAPACITY PROFILES BY TYPE
FIGURE 4-21 AVAILABLE TURBINE CAPACITY BY STATE
FIGURE 4-22 TURBINE CAPACITY BY MILL ENERGY SPEND RANGE
FIGURE 4-23 NA TURBINES INSTALLED BY PERIOD
FIGURE 4-24 TURBINE CAPACITY BY INSTALLATION PERIOD
FIGURE 4-25 TURBINE REPLACEMENTS OVER NEXT FIVE YEARS
FIGURE 4-26 MAJOR NA TURBINE SUPPLIERS
FIGURE 5-1 POWER PURCHASES BY NAICS SEGMENT
FIGURE 5-2 HISTORICAL CHANGES IN ENERGY MIX
FIGURE 5-3 ENERGY USE BY REGION
FIGURE 5-4 ENERGY USE BY TYPE
FIGURE 5-5 FUEL CONSUMPTION PER TON BY REGION / FUEL TYPE
FIGURE 5-6 ELECTRICITY CONSUMPTION RATES PER TON
FIGURE 5-7 MILL FUEL USAGE
FIGURE 5-8 ENERGY CONSUMPTION BY MAJOR PROCESS
FIGURE 5-9 TYPE OF ENERGY CONSUMED BY MAJOR PROCESS
FIGURE 5-10 ENERGY CONSUMED BY ENERGY TYPE
FIGURE 5-11 ENERGY CONSUMPTION BY PULPING PROCESS
FIGURE 5-12 ENERGY CONSUMPTION BY PAPERMAKING PROCESS
FIGURE 6-1 INDUSTRY ENERGY PURCHASES BY NAICS SEGMENT
FIGURE 6-2 ENERGY EXPENDITURES BY ENERGY SOURCE
FIGURE 6-3 ENERGY COSTS BY GRADE
FIGURE 6-4 ENERGY COSTS BY REGION
FIGURE 6-5 NA ENERGY COSTS AND CONSUMPTION BY TYPE
FIGURE 6-6 ENERGY SPENDING BY TYPE AND REGION
FIGURE 6-7 AVERAGE ENERGY PRICES PER UNIT BY REGION / TYPE
FIGURE 6-8 FUEL COST / TON OF PAPER BY REGION
FIGURE 6-9 ENERGY SPENDING BY TYPE AND GRADE
FIGURE 6-10 AVERAGE FUEL PRICES
FIGURE 6-11 ELECTRICITY PRICES AND COSTS BY GRADE
FIGURE 6-12 ENERGY CAPITAL COSTS / TON BY REGION
FIGURE 6-13 ENERGY ASSET DEPRECIATION COSTS BY GRADE
FIGURE 6-14 BOILER AND TURBINE INTEREST COSTS
FIGURE 6-15 NA MATERIALS COSTS BY TYPE
FIGURE 6-16 TOTAL AND ENERGY CREDITS BY GRADE
FIGURE 6-17 TOTAL ENERGY COSTS BY GRADE