Tomorrow's Fuel of Europe - Wood Pellets

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wood pellets fuelBiomass pellets fuel is known for its renewability, cost effective, eco-friendly. It is seen as the most promising alternative to traditional fossil fuels. Both wood residues from wood processing industry and new wood from forest resources are good choices for pellet fuel production. Besides, new biomass resources are being discovered on and on for making pellets. In recent years, great amount of energy-rich woods are planted in fallow agricultural areas, especially in Europe. With the growing of these energy woods, the resources for pellet production will be even rich in the near future.

In our time, environmental pollution and energy shortage is the two great challenges. In 1997, the United Nations Climate Change Conference has agreed to reduce 5.2% of the global emissions by the year 2012. And the 1997’s EU Commission Renewable Energy White Paper also prescribes to double the proportion of renewable energy by the end of the year 2010. Biomass, as the main part of renewable energy resources, must be taken seriously and be developed widely and fast. Biomass fuel is estimated to take about 74% of the total renewable energy consumption in European Union.

Analytic of Europe Wood Pellets Market

Wood pellets fuel is made from wood dust by use of pellet mills (flat die mill and ring die mill). In the 1980s, the Finland’s Technical Research Centre made the first step in Pelletization Research, but the study is stoped due to a decline in oil prices. It is from the 199s when the wood pellets are put to use in North America including Austria, Denmark and Sweden. Nowadays, wood pellets have been widely applied in home heating, family cooking, district heating stations and even at power plants.

In Germany, many pellet production plants are built in recent years. According to some statistics, there are 28 pellet plants in 2005 (290,000 tons of wood pellets were produced). In 2006, the number of pellet plant has reached 63. By the year 2007, there are 44 biomass pellet production plants and its annual pellet production has first exceeded the one-million ton record. Moreover, a further 13 pellet manufacturing factories are built in 2008. The existing factories are also keep expanding their capacities.

There are more than 70,000 pellet heating systems built in German households, reported by the Federal Office of Economics and Export Control (BAFA). The average consumption of each home heating system is 5~6 tons every year. That is to say, more than 350,000 tons of wood pellets are needed per year. So we can see that the potential of wood pellet industry is great. There are also plenty of wood pellets exported to other countries, making the international wood pellets trade improving rapidly.

Wood wastes such as saw dust, wood processing residues and scrap wood such as thinner trunks and tree tops are good choices for pellet production. Besides, new biomass resources are constantly being discovered. In recent years, great amount of energy-rich woods are planted in fallow agricultural areas, especially in Europe. With the growing of these energy woods, the resources for pellet production will be even rich in the near future. As high quality biomass fuel resources, wood pellets have become one of the most important fuel in Europe and Austria. More and more investors and companies are entering this market.

Essentials of Starting a Wood Pellet Plant

Before staring a wood pellet plant, you should firstly calculate the production costs at first. The cost of wood pellet production is mainly affected by feedstock costs and drying costs which takes 30% of the total costs. Besides, the utilization and availability of the pellet plant also influence the costs. Three shifts per day at five days per week is the basic requirement for an economic pellet production. The pellet production costs will be greatly increased if the availability of the plant is low. To ensure the profitable of your business, the availability of the plant is required to achieve 85%~90%.

pellet chain from production to final use

Pellet Chain from Production to Final Use

SWOT Analysis of Wood Pellets Business

★ Strengths of pellet business:

  • Diverse suitability from stoves to big power plants
  • More stable price than that of competing fuels
  • Good availability and low price of raw material
  • High energy content
  • Small storage requirement
  • Does not freeze or mold
  • Burns cleanly, small ash amount
  • Easy to handle, use, and transport
  • Environmentally friendly energy form, in particular as regards CO 2 emissions
  • Tight and homogeneous fuel
  • Renewable indigenous fuel
★ Weaknesses of pellet business:
  • Heating system binds the user
  • Particle emissions
  • Lack of quality marking for use equipment
  • Insufficient fuel service system so far
  • Price of equipment higher than that of competing one
  • Poor knowledge among consumers
★ Strengths of the environment of pellet business:
  • High growth potential increasing environmentalism
  • Increase in the production of mechanical wood-processing industry; lowering the price of pellet raw material
  • Energy politics favoring indigenous bioenergy
  • Increasing price of electricity
  • Instability of prices of import fuels, especially of oil
★ Threats of the environment of pellet business:
  • Competing indigenous alternatives: wood chips and earth heat
  • Reduction in prices of import fuels
  • Environmental policy unsuitable for pellets
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