A friend of mine designed, built, and owns two very large wood pellet plants on the east coast. He sells them as "New England Wood Pellets".
New England Wood Pellet - Home Page
Anyway, here's the non-secrets I know:
- A hammermill is a requirement, as is equipment to remove non-wood to help protect the press.
- The sawdust has to be REALLY dry before you start. It takes a lot of heat. A kiln-dried 2x4 is not good enough.
- Moisture (this is a trade secret, and I'm actually not sure what he uses right now and exacty how it's done) is then added back in right before pressing.
- Anyone can press a pellet with any wood. What matters is how much burnable wood you get into the pellet.
Basically, you take essentially all the moisture out, and then add a very little
back - just enough to get a bind. Any more, and you hurt the efficiency of the pellet (it contains more water and therefore fewer BTUs than necessary).
It's definitely a case where economy of scale works out.