Former Virginia gubernatorial candidate Terry McAuliffe is moving forward on his proposal to open a renewable energy facility at the shuttered International Paper Co. in southern Isle of Wight County.
Ending months of speculation, the newly formed Franklin Pellets LLC announced plans late Tuesday to study the feasibility of opening a wood pellet manufacturing plant capable up producing up to 500,000 ton of pellets per year at the former paper mill. Franklin Pellets is a joint venture between McAuliffe’s investment firm, CMI L.P., and the Texas-based energy company, MultiFuels L.P.
“If all goes well, we will be up and running in about 18 to 24 months,” said Peter O’Keefe, McAuliffe’s partner in CMI. Franklin Pellets has signed a letter of intent to do a due diligence evaluation and feasibility analysis of the site over the next six months, O’Keefe said.
O’Keefe declined to say how much of the massive 1,200-arce International Paper site his business would be using or how much investment or employees the new company would be hiring.
“The investment would be significant,” he said, referring all other questions to International Paper. “We’re very excited. It’s a fantastic location in one of the most vibrant wood baskets in the country with easy access to the port.”
Franklin Pellet’s target market for the wood pellets would likely be Europe, where 20 percent of all power has to come from renewable energy sources, O’Keefe said. The European market is expected to be using 100 million tons of wood pellets by 2020, up from the current 11 million tons, he said.
That increased usage by Europe is already reflecting in United States’ exporting of wood pellets, O’Keefe said. In 2008, the country exported 85,000 tons of pellets; the number increased to 600,000 tons in 2010, he said.