Bioenergy and Agriculture - Industry taking action

Reid Brothers Sawmill, Yarra Junction, Victoria

Reid Brothers Timber have been operating a sawmill at Yarra Junction since 1940. The company processes around 17,500m3 of timber per annum of which 5000m3 is kiln dried. Ten years ago Reid Brothers was faced with a growing expense for the LPG used in the boilers supplying the heat used in their kiln. They were also paying over $1200/month to send waste timber material to landfill. The company managing director, Rowan Reid, saw an opportunity to cut costs and waste by installing a wood fired boiler.

Photo 1: Furnace and chimney of the wood fired boiler

Melbourne Company Steam Systems supplied Reid Brothers with a 1MWth (thermal) system which was commissioned in 2005 at a cost of $360,000. The system burns 70-80 tonnes of mill waste weekly to heat the kilns. The waste comprises sawdust from the sawmill, clean up material, some green material and occasionally material from other timber processing businesses. The feedstock burnt generally has a moisture content ranging from around 10% to 50%.

Wood fired boilers

Modern wood fired boilers combine automated fuel- feed supply with efficient low-cost, low-emissions operation. The Reid Brothers installation has a walking floor fuel supply and automated ash removal. The system has an extensive sensor suite which allows operational monitoring to very fine detail.

Photo 2: Reid Brothers Timber, Yarra Junction, Victoria

Reid Brothers say that the boiler has run reliably since commissioning with minimal time necessary for operation and maintenance. The system runs 24/7 for around 11 months each year with any necessary maintenance carried out during periods when the sawmill is shutdown. One problem encountered was "bridging" where the waste material forms an arch in the hopper above the feed mechanism. Excluding sticks from the feedstock has reduced the impact of this issue.

Mr. Reid says that he would have no hesitation in recommending similar thermal systems to other private and government sector organisations with suitable biomass.

Comparing costs

LPG was used before the 1MWth wood residue boiler was installed at Reid Bros sawmill. The costs and savings listed below have been supplied by Steam Systems and Reid Brothers.

Wood boiler capital & installation cost - in yr


Wood fired boiler annual operation and


Savings compared to the LPG boiler


LPG - used 360,000 litres/year - additional
kilns increased use by 25% to 450,000l/yr. Average cost of LPG of 60 cents/litre.


Annual cost of waste wood disposed to


Savings Total


Add back the annual boiler cost of $15,000.
Net saving per year


Payback period for the wood fired boiler in


Table 1: Costs and savings of wood fired boiler compared to LPG boiler

Price of LPG

The price of LPG has varied since the boiler was installed from around 40c/litre to over 70c/litre. The current price (early 2012) is around 55-60c/l. Note that annual operations and maintenance costs on the previous LPG system have not been included as they were not available.

Steam Systems estimates that a similar turnkey system would now cost around $500,000. At 60c/litre for LPG this would increase the payback period to nearly two years.

Mr Reid says that natural gas is now available in Yarra Junction. This would be cheaper than LPG. However, he says that while using natural gas would be considerably cheaper than LPG, using timber waste would still provide a substantial annual saving.

Relating these costs to other sites

Reid Brothers already had equipment that could be used to move the feedstock the short distance from the mill to the burner hopper so only limited new infrastructure was required. Inclusion of any necessary infrastructure costs would increase the payback period. Greenfield plants would generally require sheds, concrete pads and utility connections, making them more expensive to install.

Photo 3: LPG boiler was retained as a back up boiler. It has not been used since the wood boiler was commissioned.

Photo 4: As modern wood boilers burn efficiently, not only are emissions minimised there is little visible smoke.

Investing $360,000 in a wood boiler now saves Reid Brothers $269,000/yr. Businesses that produce their heat from LPG, electricity or diesel may also benefit from switching to biomass heating.

Steam to generate electricity

Organic Rankine Cycle uses surplus steam

Although the wood boiler runs for most of the year there are periods where the full 1MWth capacity is not used in the kilns. This spare thermal capacity is potentially available for other purposes at minimal cost to Reid Brothers given the onsite availability of waste woody biomass. Impressed by the financial return from the boiler Mr Reid was receptive to an approach from local company gT Energy Technologies (gTET) to install an Organic Rankine Cycle electricity generation system using surplus steam from the existing boiler.

Photo 5: Reid Brothers site had the infrastructure to manage the wood residue

The Steam Rankine Cycle (SRC) is used in many large electricity generators such as the coal-fired plants in the Latrobe Valley. While SRC systems use heat to turn water into steam to drive turbines and thus generate electricity, Organic Rankine Cycle (ORC) generators use an organic chemical as the working fluid at much lower temperatures and pressures. This reduces operation and maintenance costs compared to SRC systems. It also means that ORC systems can frequently be added in a "bolt-on" fashion to existing systems producing steam at relatively low temperatures and pressures with a heat exchanger coupling the ORC to the thermal system. This flexibility has led to the installation of a large number of ORC systems in Europe many of which have used geothermal energy. More recently, ORC systems have been increasingly installed to make use of surplus steam from European biomass energy systems.

Reid Bros save $10,000 per year on electricity

While Reid Brothers owns the thermal system outright the ORC electricity generator will operate under a different arrangement. gTET have installed the system at the Yarra Junction site and retain ownership of the equipment. They will sell electricity to Reid Brothers at a discount to the rate otherwise paid by Reid Brothers to their electricity supplier. The project aims to save Reid Brothers around $10k/annum on electricity costs while providing a financial return to gTET. Any excess power is sold to the grid.

The return available from selling electricity to the grid is considerably less than the rate gTET can charge Reid Brothers under this arrangement during the day. As Reid Brothers electricity night tariff is lower than the peak rate and the site uses much less power at night it is less profitable for gTET to generate electricity and sell power to Reid Brothers after hours.

Early ORC prototypes were developed around 50 years ago. The technology has much in common with compression/ expansion cycle plants as used in domestic and industrial refrigerators and air-conditioning. gTET has commercialised ORC technology based on car air-conditioner work done under the auspices of the CRC for Advanced Automotive Technology. gTET offers a range of ORC systems from
25kWe to over 1000kWe.

The system installed at Reid Brothers is rated at 70kWe gross power with 8kWe used to run the ORC pumps and cooling tower leaving about 60kWe available for use in Reid Bros operations or exporting to the grid. ORC technology efficiency is partly driven by the temperature of the heat source (in this case the biomass boiler) and a heat sink.

Rowan Reid was attracted by this scheme as it meant that he bears little project risk. Simon St Hill (Technical Director gTET) says that to buy a system outright would depend on factors such as the size of the system, the technology used, whether a cooling tower was required and site characteristics.

Indicative prices would be $2000 - $2500 / kWe for a complete system.

Grid interconnection

gTET say they have received permission for grid connection in early 2012. Even though the project aim is to use as much of the electricity generated by the ORC system on site, as possible, just by being wired in to the Reid Brothers grid connection means that gTET must satisfy the distributor regarding a number of constraints in areas such as power quality. gTET are also working with Steam Systems to make best use of the steam generated by the thermal system.

The system installed at Reid Brothers provide an outstanding example of using material that would otherwise be landfilled to produce distributed biomass energy and save money. Clever integration of the two biomass energy systems provides synergistic benefits. Any site using heat and electricity with sufficient low-cost biomass available could potentially follow this lead.

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Page last updated: 09/06/17