Genesis Energy says black pellets could be an alternative fuel source for its Huntly Power Station.

Genesis Energy and ASX-listed Foresta have signed a term-sheet to advance negotiations on the supply of torrefied biomass, or black pellets, for electricity generation at the Huntly Power Station.

This is the first term-sheet Genesis has signed with a potential New Zealand producer of biomass as Genesis seeks to establish a sustainable, economic supply for the power station, the company said.

“Genesis is targeting a supply of 300,000 tonnes PA [per annum] of torrefied biomass by 2028 to reduce or if possible, eliminate New Zealand’s current dependency on coal,” the company said.

Genesis is also working with several potential producers in parallel to achieve the target, it said.

Foresta plans to build a $370 million integrated pine chemical and torrefied wood pellet production facility in Kawerau – one of the first plants of its kind to be established in New Zealand.

Genesis chief wholesale officer Tracey Hickman said biomass was a key part of the company’s strategy to optimise energy storage and flexible generation.

Hickman said electricity security for New Zealand depended on having fuel security and fuel diversity.

“The unique opportunity we have with the Huntly Power Station is that existing assets are designed to generate power from several feedstocks including gas, coal, diesel and biomass, which mitigates energy scarcity, price and supply chain risk for New Zealand,” she said.

Hickman said the term-sheet was non-binding but accelerated Genesis’ negotiations over price, volume and product quality.

Foresta executive chairman Henry Cheng said the term-sheet signing marked a significant milestone.

“Our planned state-of-the-art integrated manufacturing facility in Kawerau will play a key role in reducing reliance on coal and we are eager to collaborate with Genesis to support New Zealand’s energy transition to net zero by 2050.”

New Zealand aims to be net carbon neutral by 2050.

Coal generation at Huntly provides back-up electricity generation for renewable energy, especially during dry winters like that experienced in 2024 and on days of low wind.

Black pellets, like coal, can be stored outside and only used when required to provide back-up generation.

Foresta Group – formerly Leaf Resources – describes itself as a leading natural and renewable pine chemical and biomass pellet manufacturer.