(Deliverable 3) Quality Wood project – EIE/06/178/SI2.444403 · 2014-08-11 · (Deliverable 3)...

SOCIO-ECONOMIC ANALYSIS OF THE FIREWOOD MARKET

(Deliverable 3)

Quality Wood project – EIE/06/178/SI2.444403

Matjaž Grmek, Katarina Vertin, ApE d.o.o.

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Matjaž Grmek, Katarina Vertin, ApE d.o.o., Socio-economic analysis of the firewood market. Quality Wood Project Report 2.2./2009, Project EIE/06/178/SI2.444403. Slovenia, April 2009, 52 pages.

Keywords: firewood, production, socio-economic impacts,

Abstract The scope of this report is to present the socio-economic impact of the firewood use in Europe. By social impacts we mean the impacts on employment, by economic impacts the creation of local industry, enhancement of the local economy and the competitive development of renewable energy projects in comparison with fossil fuel technology projects are meant. For the report and the whole development of the “Quality Wood” project, the studies have been carried out in different European countries (Austria, Finland, France, Norway, Slovenia, and Spain) where the use of firewood is important. Macroeconomic tool – ELVIRE (Evaluation of Local Value Impacts for Renewable Energy) was used for the purposes of this analysis. Situation among countries is quite different and this fact is reflected also through the results achieved.

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Preface This report is a WP 2.2 summary report of Quality Wood – Increased deployment of firewood by improving fuel quality and low emission combustion – project (EIE/06/178/SI2.444403) carried out during 2006 – 2009. In this work package the current situation in firewood trade and use in terms of its socio-economic impacts in Finland, Norway, Slovenia, France, Austria and Spain is analysed and reported. The analyse and comparison is made by use of the ELVIRE model. Some basic information that serves just as a background and framework for the report are taken from the WP 2.1 report.

The main objective of the Quality wood project is to enhance the amount actual energy produced from firewood and its production quality in the EU by promoting better fuel quality management, to improve firewood production and supply chains and to promote the use of more efficient combustion appliances with less environmental impacts.

This report has been carried out by Agencija za prestrukturiranje energetike (ApE). ApE is a counselling company dealing with the renewable and efficient use of energy in Slovenia. Information for the development of this report has been collected from the national reports of WP 2.2 of each project partner.

The sole responsibility for the content of this report lies with the authors. It does not necessarily reflect the opinion of the European Community. The European Commission is not responsible for any use that may be made of the information contained therein.”

Ljubljana, April 2009

Matjaž Grmek

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Contents

Abstract..............................................................................................................................2

Preface ...............................................................................................................................3

1. Introduction..................................................................................................................5

2. National energy system................................................................................................7 2.1 Facts about the countries ....................................................................................7

3. Model ...........................................................................................................................9 3.1 Method..............................................................................................................10

4. Case Studies ...............................................................................................................18 4.1 Finland..............................................................................................................18

4.1.1 Background, input information ............................................................18 4.1.2 Results from the ELVIRE model of Central-Finland ..........................21 4.1.3 LITERATURE .....................................................................................28

4.2 France ...............................................................................................................29 4.2.1 Background, input information ............................................................29 4.2.2 Results from the ELVIRE model of France.........................................32

4.3 Slovenia ............................................................................................................34 4.3.1 Background, input information ............................................................34 4.3.2 Results from the ELVIRE model of Slovenia......................................35

4.4 Spain .................................................................................................................38 4.4.1 Results from the ELVIRE model of Navarra.......................................40

4.5 Austria ..............................................................................................................44 Results from the ELVIRE model - Estimating longterm socio-economic effects.....44 4.6 Norway .............................................................................................................46

5. Summary and conclusions .........................................................................................50

References .......................................................................................................................52

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1. Introduction Through centuries wood was the main source of energy for a man. Later with the discovery of the coal and liquid fossil fuels its relevance started to decline. Nevertheless outside of the major urban settlements and on the countryside wood as a fuel quite successfully remained an important energy source. The use of fossil fuels for heating purposes – if we look at the households – offered the most comfortable way of heating as there was no need for large storage and every day loading and ash removing as is the case with firewood or coal. With the technology development of firewood use this gap narrowed quite a bit and comfort with modern appliances is now much higher even in case of firewood. Enhanced use of biomass is justified also from different views such as high share of forest (e.g. in Slovenia and some other countries), its local character and hence greater sustainability.

As a renewable and environmentally friendly source of energy, wood biomass is an important item in development strategies of developed and environmentally aware societies. However, due to previous neglect, our knowledge and expertise of the basic parameters regarding this source is somehow inadequate. Quality Wood would like to lessen this a bit. In nature, all biomass ultimately decomposes to its elementary molecules with the release of heat. Therefore, the release of energy from the conversion of biomass into useful energy imitates natural processes (but at a faster rate), and this energy is a form of renewable energy. Converting biomass to fuel can be as simple as cutting trees into small pieces so they can be burned to produce heat or electricity, or as complicated as converting it into a liquid or gaseous fuel. In this paper we are dealing with the first option, which is still the prevalent way of biomass energy use in most European countries. This of course means that its use and preparation has a considerable impact on the society as well. The rural areas of most EE countries suffer from economic stagnation and marginalization, which often leads to depopulation of rural communities. Development and use of modern wood energy systems can offset at least in part this socio-economic and cultural impoverishment by creating new income opportunities in decentralized communities. Linking wood extraction to biofuel production can create additional markets for thinned forest material and may thus provide forest landowners with wider opportunities to manage forests to meet both ecological and economic management objectives.

Renewable energy technologies provide investment opportunities and are labour intensive. Jobs develop directly from the manufacture, design, installation, servicing, and marketing of renewable energy products. Jobs even arise indirectly from businesses that supply renewable energy companies with raw materials, transportation, equipment, and professional services, such as accounting for example. In turn, the wages and salaries generated from these jobs provide additional income in the local economy. Renewable energy companies also contribute to higher tax revenues locally than conventional energy sources.

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Firewood is a local and renewable energy source. Its carbon balance is neutral; therefore it does not increase greenhouse effect and its local character adds to the sustainability issue. These facts make him a good option for heating. However, firewood market has not been deeply analysed in relation to a renewable energy market and energy market in general. Partly also because of the lack of data. In general, there is not much information about this sector available. Furthermore, the grey market of firewood makes a study on it even more difficult, consumption in rural areas, which is the most important one, is very difficult to asses.

For example in Slovenia at present, almost the entire consumption of fuelwood is absorbed by household and principally used for heating, for which this fuel provides about one third of the national energy (heat) demand in the hoseholds. In spite of its relevance, reliable statistics on fuelwood consumption do not exist. Further more, wood is the only energy source which is privately owned and can be bought off the market at considerably lower prices, or can even be attained at no cost if one makes its own firewood and disregards the cost of labour and wood. Slovenia is a country with a lot of forests and unused wood biomass potential. In the past wood used to be an important source of energy for rural population (for cooking and heating). The situation has changed in last 30 years when oil was very cheap. The importance of wood biomass as an energy source has grown in last 5 years but we still can not say that wood biomass is "popular" among people. In general they are sceptical about new technologies. The main reasons for this situation are insufficient information, lack of knowledge, insufficient written sources and unclear governmental policy. The situation is similar also in other countries, e.g. in France. Use of woodfuels can not only reduce dependency on imports of fossil fuels which represent several billion Euros per year in European countries but also improve the synergies with many forestry activities and industries already well established in the local areas where wood energy systems can be enhanced and further developed. Many FAO studies also confirm that wood energy can significantly contribute to creating employment at local, regional and national levels and retaining more of the community’s money in circulation within the community. In most countries, the socio-economic benefits of bioenergy use can clearly be identified as a significant driving force in increasing the share of bioenergy in the total energy supply. In fact, creation of regional employment and economic gains are probably the two most important issues regarding biomass use for energy production.

We wanted to prove if this is the case with firewood use in participating countries and if so to what extent and to see how things differ from east to west and north to south.

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2. National energy system

2.1 Facts about the countries

Each participating country has its own characteristics in terms of energy potential and use, geographic and climatic conditions, economy and political circumstances, customs, forest share, etc. This variety of boundary conditions makes a comparison of socio-economic impacts of firewood production and use a hard task..

In the last decades, energy consumption of the six countries studied has been increasing, These high levels of energy consumption are mainly due to the high living standard, energy intensive structure of the industry as well as due to the climate conditions and size of the country, which lead in higher overall electricity consumption and higher fuel consumption in transport. However, this trend is unacceptable for economic and environmental reasons and therefore corrective measures are being implemented.

National as well as EU energy policies have emerged supporting the use of biofuels, encompassing forest fuels, throughout Europe. For this reason, the EU energy policy has resulted in the introduction of new national policies subsidizing the use of biomass throughout Europe.

The scope of this report is to present the status quo of the firewood markets in Europe in relation to its socio-economic effects. For the report and the whole development of the “Quality Wood” project, the studies have been carried out in different countries of Europe, in which the use of firewood is important. For more information on national energy systems look at the report of the WP 2.1.

The countries studied are shown in Figure 1:

− Austria − Finland − France

− Norway − Slovenia

− Spain

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Figure 1. Europe

Use of biomass represents a market for the agriculture and forestry sector (which are usually linked), new working places and decrease in demography problems. The proper development is even more important for agriculture than for the energy.

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3. Model Socio-economic benefits of using fire wood for households heating have been estimated by using the project analysis macroeconomic tool – ELVIRE (Evaluation of Local Value Impacts for Renewable Energy). The ELVIRE tool was developed by the European Federation of Regional and Environmental Agencies with support from Altener programme, which was administered by the European Commission’s Directorate-General for Energy. The model was created for evaluating direct and indirect long-term economic effects of subsidized projects of renewable energy sources. Effects are bound to the following topics:

• regional development

• employment

• public finances

• environment

The model aims at the ‘externalities’ of projects, comparing the overall impact of the project with initial costs, wrote the authors. ELVIRE permits the calculation of these externalities created by local or renewable energy projects already undertaken. The method is halfway between traditional “ex ante” evaluation of projects and the analytical methods for large projects.

As the authors nicely put it (quote): “This guide is an evaluation tool which demonstrates that energy choices do not simply depend on a micro-economic dimension but also on externalities created.” These externalities – regional economic development, employment, return on public finances, sustainable development, environment, - constitute ‘regional benefit’, the measurement of which is vital to convince public or private decision-makers to set up projects promoting the use of local and/or renewable resources.

ELVIRE permits the calculation of these externalities created by local or renewable energy projects already undertaken. The method is halfway between traditional ‘ex ante’ evaluation of projects and the analytical methods of large projects.

The application was made in the Microsoft Office Excel programme. It has seven work sheets where four of them require the user’s active functioning - data entering. The number of variables to be entered is quite considerable. The high number of entered parameters and hence lower user friendliness is possibly the greatest deficiency of the application. For the Quality Wood purposes it needed minor changes – currency was changed to Euro and some data were left out.

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3.1 Method

Input data for the analysis can be divided into:

• micro-economic data (average investment, sources of finance, average subsidies, RES prices, fossil fuel prices, maintenance costs estimate with its distribution, life-cycle of the project, interest rates etc.) and

• macro-economic data (industrial data, social-economic data, environment and

development indicators). In summary, the model analysis renewable energy projects related to the following impacts: the economic development of the region, employment, and return on public finances, sustainable development and the environment.

Results of the analysis are in numerical form of main macro-economic parameters and graphically in the form of economic flows schemes. Model estimates effects 20 year on following macro-economic categories:

Regional activity

An item regional activity accounts for regional activity created during the investment phase, discounted value of maintenance and value added for project operation and all additionally created activities. In calculation lost activities are considered also.

Net regional income

Net regional income is calculated by net income distributed during the investment phase, discounted income from the project operation and maintenance phase plus net consumer’s income balance (users' profitability).

Regional benefit

Regional benefits in whole project's life represent the net regional income, value added of non-imported fossil fuel energy and net public finances receipts.

Public finances receipts

Total public finances receipts evaluate all tax income, which occurs due to project execution but also due to the losses in public receipts. Net income of public receipts is usually negative due to the high tax rate for fossil fuels.

These categories are handled in stages, each one with a specific table, five altogether. Results are shown in table six and the economic flows generated by the project as a graph in separate sheet.

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The steps are shown on Slovenian case of the 620 subsidised firewood boilers further down.

Table 1 uses the values specific for the evaluated project. These values include financial data, micro-economic data relating to the energy balance and the operational phase of the project, as well as data allowing the investment to be broken down into its different components.

Table 1. Example of the input table – table 1

The use of wood biomass - boiler on firewood for households, 1 project Table 1 : Regional and local subsidies SR kEUR 735,6 735.564 €Total subsidies S kEUR 735,6 735.564 €Investment IT kEUR 2.780,0 2.780.009 €- paid by the consumer (net of subsidy) Ic kEUR - paid by the distributor/producer Ip kEUR 1.308,9 2.044.445 €Project lifetime D leta 15,0 Discount rate a % 5,00 Micro-economic data Energy Final renewable energy yielded Er toe / year 897,760 Final non-renewable energy substituted Es toe / year 897,760 Imports of primary non-renewable energy avoided Ep toe / year 897,760 Price to consumer of renewable energy (inclusive all taxes) pr kEUR / toe 0,0008 6,80 c€/kWhPrice to consumer of substituted energy (inclusive all taxes) ps kEUR / toe 0,0011 9,66 c€/kWhPrice of substituted energy coming into the region (excluding taxes) psim kEUR / toe 0,0009 7,79 c€/kWh Share of tax in the price of renewable energy (excluding VAT) tr % 0,00 Share of tax in the price of substituted energy (excluding VAT) ts % 0,10 Type of energy substituted L-fuel oil Maintenance and operation phase Annual cost to the producer with the project Mpr kEUR 53,47 Annual cost to the consumer with the project (excluding VAT) Mcr kEUR 44,56 Annual cost to the producer without the project Mps kEUR 0,1 Annual cost to the consumer without the project (excluding VAT) Mcs kEUR 0,1 Annual number of hours for maintenance and operation H hours 238 Number of jobs created C persons 16,0 Number of jobs preserved M persons 7,0 Number of person affected E persons 1,0 Macro-economic data Breakdown of the investment IT (excluding VAT) Equipment cost Eq kEUR 2316,7 2.316.674 €Margin for marketing of equipment Dr kEUR 0,0 €Value of equipment assembled or manufactured in the region Eqr kEUR 1057,8 1.057.848 €Cost of engineering and installation undertaken in the region Vr kEUR 930,0 930.000 € Annual induced activity AIr kEUR 291,8 291.800 €Loss in regional activity Apr kEUR 0,0010 0,9665 € Data input Results

1 toe = 11,6 MWh

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Table 2 covers a range of social, environmental, and industrial data which are characteristic for the project and which can be applied in a more general way to economic activity in the region. These data can be subject of a specific survey, however where they are difficult to obtain average values are used.


The use of wood biomass - boiler on firewood for households, 1 project Table 2 : Social data Legal number of hours worked annually in the country HW hours 1.900 Social charges (employer and employee) as % of salary net of tax cs % 0,585 Local and regional company taxes as % net salaries tax % 0,000 Average rate of income tax on net salary tir % 0,194 Average duration of unemployment in the region of country dmc months 7 Average unemployment payment in comparison to net income amc % 0,26 Average annual level of net industrial wage in the country sal kEUR 0,735 Average rate of tax on value added TVA % 0,2 Environmental data Unitary CO2 emission eCO2 kg/toe 3178,4 Unitary SO2 emission eSO2 kg/toe 32,7 Unitary NOx emission eNOx kg/toe 2,1 Industrial data Rates of value added direct value added for the manufacture of equipment vaeq % 0,2 indirect value added contained in equipment vaind % 0,3 share of this indirect value added produced in the region var % 0,3 value added on operation and maintenance activities vam % 1 value added on engineering and installation activities vav % 0,6 value added on induced activities vaair % 0,4 value added on lost activities (energy sector) vaapr % 0,15 Share of net income in added value created for the investment reit % 0,4 created for the maintenance rem % 0,4 Data input Results 1 toe = 11,6 MWh

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Table 3 comprises intermediate calculated values and serves as a table for reference to the evaluators. Basic technical parameters and economic impact of the program is presented here.


The use of wood biomass - boiler on firewood for households, 1 project Calculations for investments without VAT Discount factor A % 5Annual net balance for the consumers Y kEUR 53,11414Added value created during the investment phase VO kEUR 1.196,67Added value created during the operation/maintenance phase VM kEUR 97,92Added value created by induced activities VAIr kEUR 116,72Loss in regional added value VAPr kEUR 0,00Net incomes distributed during the investment phase WO kEUR 478,67Net incomes distributed during the operation/mainenance phase W1 kEUR 85,86(including induced activity and losses of income for subst. energy) Annual pollution avoided by energy substitution Annual CO2 emmission avoided CO2 tonnes 2.853,440Annual SO2 emmission avoided SO2 tonnes 29,357Annual NOx emmission avoided NOx tonnes 1,885 Data input Results

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Tables 4 and 5 provide respectively the quantitative and qualitative results of the valuation.

Table 4. Example of the result table – table 4

The use of wood biomass - boiler on firewood for households, 1 project Calculation of quantitative indicators Total cost of the project kEUR 2780,01Investment by toe substituted kEUR / toe / year 3,10Total subsidies kEUR 735,56 Contribution to regional development Subsidy multiplier ratio 3,78Regional activity created kEUR 2269,88Net incomes distributed in the region (1) kEUR 642,38Value of non-imported substituted energy (2) kEUR 4,06Regional benefit kEUR 2126,44Regional rate of return on the project % -3,18%Contribution to job creation Regional work content (4) persons/year 653,13Regional work intensity persons / year / 10kEUR 2,35Unemployment avoided (5) persons 23,00Social cost of avoided unemployment kEUR/person 153,29Contribution to Public Financec Public receipts generated by the project (3) kEUR 1480,00Payback period for the total subsidy (S) to the public receipts years 217726,88Contribution to environmental protection Total quantity of CO2 avoided over the lifetime of the project tonnes 42.801,61Total quantity of SO2 avoided over the lifetime of the project kg 440,35Total quantity of NOx avoided over the lifetime of the project kg 28,28 Data input Results

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Table 5. Example of the result table – table 5

The use of wood biomass - boiler on firewood for households, 1 project Table 5 : Contribution to regional development Reproduction of the project number 1 Replication potetnial Exsistence of regional know-how from N to Y Y Absence of institutional and legal barriers from N to Y Y Political will from N to Y y Existence of financial means from N to Y Y Awareness of elected members, users and decision-makers from N to Y y Absence of economic barriers from N to Y n Contribution of environmental protection Impact on noise from -- to ++' o Impact on fauna, flora, water from -- to ++' ++Visual impact from -- to ++' o Contribution to sustainable development Stimulation of less developed regions from N to Y Y Action against social exclusion from N to Y n Contribution to spatial planning from N to Y Y Action towards social insertion from N to Y y

Scale of values

N - no contribution -- very negative impact

n - very small contribution - negative impact y - average contribution o no impact Y- important contribution + positive impact

++ very positive impact

Data input Results 620 subvencioniranih kotlov od leta 02-06

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Table 6. Example of the result table – table 6 estimating long-term socio-economic effects; results for one and 620 boilers The use of wood biomass - boiler on firewood for households, 1 project

Results More projects €Total investment cost of the project (kEUR) 2.780,01 1.723.606 1.723.605.580Investment per saved toe (kEUR / toe) 3,10

A - Contribution to the Regional DevelopmentRegional subsidy multiplier (ratio) 3,78Regional activity (kEUR) 2.269,88 1.407.326 1.407.325.798Net regional incomes (kEUR) 642,38 398.276 398.276.483Regional benefit(kEUR) 2.126,44 1.318.390 1.318.390.384Regional return on investment (ISD %) -3,18%Duplication of the project (number) 1,00 620Potential for dissemination: regional know-how Y institutional and regulation incentive Y political wilingness y financing means Y awareness of politicians, users, managers y non-economic obstacles n

B - Contribution to employmentWork regional content (cap. X year) 653,13 404.939Work regional intensity (cap. /year /10kEUR) 2,35 1.457Avoided unemployment (cap.) 23,00 14.260Social cost of employment (kEUR/cap.) DOBAprojekta??? 153,29 95.037 95.036.851

C - Contribution to Public FinancesPublic finances receipts (kEUR) 1480,00 917.600 917.599.758,3Payback period on public finances (year) 217726,88

D - Contribution to sustainable developmentNon-renewable primary energy saved (toe/year) 897,76 556.611Stimulation of less developed aresa YFight against social exclusion nLand planning contribution YAction for insertion y

E - Contribution to Environmentt CO2 equivalent saved fot the project life time 42.801,61 26.536.996kg SO2 equivalent saved fot the project life time 440,35 273.018kg NOx equivalent saved fot the project life time 28,28 17.533Noise impact oFauna, flora, water impact ++Visual impact o

Estimating longterm socio-economic effects

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Regional economic flows generated by the project

Regional BenefitRegional Return on Investment -3,2%

Investment 2780,01 kEUR

Non-renewable energy saved

897,76 toe/year

CO2 reduction 2853,44 t/year

Regional Activity 291,80 kEUR

Employment653,13 persons/year

Avoided Unemployment 23,00 person

2126,44 kEUR

Profitability for Users 53,11 kEUR/year

Regional Subsidy 735,56 kEUR

Regional Incomes 642,38 kEUR

Public Receipts 1480,00 kEUR

Figure 2. Graphical results - Regional economic flows generated by the project; the case of 620 subsidised firewood boilers in Slovenia

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4. Case Studies The socio-economic part of the Quality Wood project took some more time and work than planned at the beginning. Already the making/looking for the suitable model was an endeavour on itself. At first another (even more complex - a PhD thesis http://petelin.gozdis.si/zbgl/2005/zbgl-77-4.pdf) model was to be used, however it soon turned out that it was too complex and too academic – not really a suitable option for Quality Wood. As the socio-economic study was just a subpart of one of the work packages of the project. This fact prolonged the starting phase of the task 2.2 and the actual making use of the model by the partners. Nevertheless all partners managed to make use of it and produce some input to the work package.

After the preparation and testing of the model, it was sent to the partners to review and comments. Since there were no remarks Ape prepared a template for data collection for the case studies and sent it to the partners. Each partner then used the model for its own case. Partners found it a bit to complex and experienced quite some difficulties with its use. For the detailed singular reviewing of the cases there was not enough time available, though. The most elaborated are Finish and Slovenian example as were done in close cooperation with VTT and ApE and were leading a way for other partners. Six case studies from six partners were gathered.

The cases from partners are presented below. Since Slovenian case was already shown briefly let start with the Finnish case. Perhaps it suits best to the model also because of the data gathered and regional aspect of it.

4.1 Finland

Socio-economic effects of the new firewood stoves and boilers in households in year 2007 and beginning of 2008 for the region of Central-Finland

4.1.1 Background, input information

In Finland the financial support for the RES heating began after the oil crises in 1973 - 1979. Investment subsidies were given to district heating plants which used domestic fuels, peat and wood. Later, from 2000 onward, the RES production was also subsided, i.e. reed canary grass cultivation and small wood procurement from forest thinning (Kemera, www.mhy.fi/mhy/metsanhoito/fi_FI/tuet/). In addition, households that have changed their fossil heating system to the RES heating have been given financial investment subsidies,

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annually 4 million Euros during the recent years 2006-2008. An average subsidy has been about 1500 € (10% of the investment).

According to the statistics, in Finland a typical household has an average living space of 78 m² and 2,1 people live in it. A Typical Finnish detached house is bigger, about 140 m2 on average, and four people is living in it.

Average energy consumption in single houses has been decreasing during the last years. In so called “Normi2000” –norm for single houses it is used about 160 kWh/m²/a for heating, figure 1. In “Normi2003” the figure is 100 – 120 kWh/m²/a. In modern low energy houses, the heating energy can be as low as 20 – 40 kWh/m²/a. A typical annual use of electricity is 35-50 kWh/m2. In an average size of the house it would be 5 000 - 6 000 kWh per year. An average need of energy for producing hot water is 750 - 1 000 kWh/person/a. In energy consumption calculations Finnish degree-day factor differs from values in southern Europe.

Figure 3. Energy consumption of two houses heated by electricity (Saari 2004).

After “Normi2003”-norm it is used for a normal detached house:

Heating: 14000 kWh/a (= 100 kWh/m²/a), Electricity: 6300 kWh/a (= 45 kWh/m²/a), Hot Water: 7700 kWh/a (= 55 kWh/m²/a).

In 2007 the most commonly used heating sources of new detached houses in Finland were electricity (~43%), ground heat (~25%), district heat (~12%), chopped firewood and wood chips (~9%), air source heat pumps (~6%) woodpellets (~4%) and oil (1%), figure 2.

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Heating of new detached houses in 2007. Estimated heating solutions of detached houses in 2008.

Figure 4. A distribution of heat sources of detached houses in Finland in 2007 and an estimation for 2008 based on a questionnaire study. (Source: Rakenustutkimus RTS:n kysely / Mainio 2008).

It is very popular to use a fireplace as a secondary heating source in houses, particularly, if the main heating source is electricity, district heat, heat pump or even oil. The use of solar panels is growing. It seems, that Finns choose their primary heating system based on how easy it is to use and complement it with other systems, e.g. firewood heating and solar heat. Primary heating with firewood is more common in the country, for example in farms where wood fuel is easily available from surrounding areas. More effective central heating with wood burning boilers is preferred. Although some farms still use wood logs as fuel, wood chips have become the most common wood fuel in the country.

It is usually used 300 litre hot water tanks with a 3 kW heating element in central heating. The hot water tanks are bigger if in firewood boilers are used, usually 2000 litres or even more.

The total number of buildings in Central-Finland amount to 140 000. The number of inhabited houses is 55 000. In figure 2 it is shown the distribution of dwellings built in different years. After the World War 2 many houses were built, which are still in use. When the city of Jyväskylä started growing more apartment buildings were needed.

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Figure 5. The number of dwellings built in different decades in Central Finland. After the WW2 vast numbers of houses and apartment buildings were built. Source: Tilastokeskus (Statistics Finland).

In detail, the number of dwellings is distributed as follows:

Detached houses: 59 870 Row houses: 22 757 Apartment buildings 54 994 Other: 2 424 Total 140 045 Another interesting characteristic in the Finnish living is a large number of summer cottages, about half a million in the whole country and 35.000 in Central Finland. Usually firewood is used in these buildings in fireplaces and saunas.

4.1.2 Results from the ELVIRE model of Central-Finland

Two Elvire model calculations were done for the data of Central-Finland, one for boilers and one for fireplaces. Many figures in the models are given on the best assumption, because it was impossible to get all values precise for figures from statistics, industry or individuals.

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

- 1920 1921 -1939

1940 -1959

1960 -1969

1970 -1979

1980 -1989

1990 -1999

2000 -2007

Num

ber

of d

wel

lings

Raw- or terracehousesBlock of flats Detached houseOther building

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During decades thousands of firewood heating systems have been built. Total, firewood used in Central-Finland is about 300.000 loose-m3 (43.100 toe/a, Paananen, 2007). Production of firewood is mainly produces at country side; even all the firewood is not merchandised. In Central-Finland high quality firewood is offered at the price of 50–55 €/loose-m3 at the production place (www.halkoliiteri.com/keskisuomi/showinfo/?info=18, 5.10.2008).

Firewood is used also for heating of saunas, approximation 70.000 – 100.000 loose-m3. In sauna heating is not used for substituting fossil fuels, therefore no subsides are available. We did not include the sauna heating in the ELVIRE model.

Boiler model

In the model we used 25 new firewood boilers installed annually without any subsidies and 15 subsidised new firewood boilers that substituted fossil ones in Central-Finland. All boilers were assumed to be highly efficient, low CO2 and dust emissions and also with a hot water tank. Average price is 4.500 € without assembly etc. If boiler burns 25 loose-m3 of birch firewood; that means growth of 92 toe/a of the use of firewood in new systems and regional investments.

Old fossil heating systems are updated. We estimated, that annually in Central-Finland 60% (15 boilers) of old heating systems are rebuilt on equal pattern as new heating systems (55 toe/a).

If heating system is changed to wood or some other RES-fuel from a fossil fuel system, maximum 15% of investment is subsidised. We estimated subsidies in the sum of 68.000 €, 10% of the sold equipment.

The consumption of hot water and heating is in an ordinary detached house (picture 1) 21.7 MWh/a with average 20-25 kW boiler on wood biomass1, 2). A local manufacturer (http://www.ariterm.fi/index.php?lang=eng) makes such boilers, perhaps little over dimensioned for this purpose. With a proper hot water tank the boiler size can be reduced to 15-20 kW. We assumed that 50% of the investment in the boiler is produced or assembled in the region and 90% of services installing, selling and servicing the boiler the labour is from Central-Finland. Main part of the firewood boilers and hot water tanks manufactured in Central-Finland are exported.

1)http://www.biohousing.eu.com/heatingtool/2) http://www.motiva.fi/fi/kuluttajat/pientalonlammitysjarjestelmat/

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ResultsTotal investment cost of the project (kEUR) 220,00Investment per saved toe (kEUR / toe) 2,40

A - Contribution to the Regional DevelopmentRegional subsidy multiplier (ratio) 32,59Regional activity (kEUR) 348,08Net regional incomes (kEUR) 62,84Regional benefit(kEUR) 792,56Regional return on investment (ISD %) 33,32%Duplication of the project (number) 1,00Potential for dissemination: regional know-how Y institutional and regulation incentive Y political wilingness Y financing means Y awareness of politicians, users, managers Y non-economic obstacles N

B - Contribution to employmentWork regional content (cap. X year) 4,10Work regional intensity (cap. /year /10kEUR) 0,19Avoided unemployment (cap.) 12,00Social cost of employment (kEUR/cap.) -50,57

C - Contribution to Public FinancesPublic finances receipts (kEUR) 183,20Payback period on public finances (year) 0,26

D - Contribution to sustainable developmentNon-renewable primary energy saved (toe/year) 91,60Stimulation of less developed aresa YFight against social exclusion YLand planning contribution YAction for insertion Y

E - Contribution to Environmentt CO2 equivalent saved for the project life time 2.377,02kg SO2 equivalent saved for the project life time 0,00kg NOx equivalent saved for the project life time 3,11Noise impact +Fauna, flora, water impact oVisual impact +++

Table 7. Estimated longterm socio-economic effects for firewood boilers in Central Finland.

24

Figure 6. Regional economic flows of firewood boilers in Central Finland 1€ of regional subsidy in 1 year created 12.2 € of investment into 15 boilers on wood logs and saved 0,008 toe/year of energy from extra light fuel oil therefore decreased 21.4 t/year of CO2. 1€ of subsidy created 0.21 € of regional added value.

1 € of investment into 40 firewood boilers (15 subsidized and 25 newly installed) created in one year 3.6 € of benefits for the region and saved 0,00041 toe/year of energy from extra light fuel oil therefore decreased 1.08 t/year of CO2

Profitability for all users increases costs to the wood log end users that exchanged the extra light fuel oil for 10.880 € per year, and according the to the fossil fuel price rise it decreases every year. Regional incomes are sold services less the profitability of the end user discounted for the project lifetime and added the regional income for selling the boiler and servicing it. It sums up to 62.840 € for Central-Finland for the lifetime of the all 40 boilers and brings public incomes in the sum of 183.000 €. These include difference of taxes on fuels, taxes and social charges of regional incomes of investment and services of the boilers,

Regional socio-economic flows generated by the project

Regional BenefitRegional Return on Investment 33,3%

792,56 kEUR





Employment 4,10 persons/year



Regional Activity 85,00 kEUR/year



91,60 toe/year

25

VAT of the investment and boilers, and savings for 12 unemployed people if it weren’t the project. Regional activities have increased while the wood logs had to be produced and sold for 40 boilers around 85.000 € yearly, so this money stays in the region.

The whole boiler process from assembling, selling, transporting, installing and maintaining the boiler and also producing wood logs and the end firing boiler employ in average 4 persons per year for all 40 boilers or more likely the quantity of direct and indirect work carried out by regional companies sums up to 4 persons per year. Avoided unemployment is estimated, if there was no demand on wood logs, we would not need three people to assemble boilers, one to sell them, two to deliver and montage them, and one to service them. We would not need also 2 farmers for cutting and loading the trees, two for processing and delivering firewood and the end chimney man altogether sums up to 16.

Regional benefit is the money not spend on imported fossil fuel, added value of services and selling the boiler and the income that stays in the region because of the project and it sums up for whole 40 boiler’s lifetime to 792.560 €. So if invested 220.000 € the internal rate of return is 33 % if regional benefit is discounted by 7 %.

Fireplace model

Firewood is also used as a secondary heat source in fireplaces, new and updated, also for heating free time houses. Almost every new house is built nowadays as a secondary heating system (fireplaces, assumption 608 new and 365 units/a updated from fossil heating). Fireplaces can be sold or built locally and they give plenty of work for masons. Several expensive fireplaces are also bought outside the region and almost all weekend house fireplaces are imported. On the other hand as a secondary heat source fireplaces do not use as much firewood fuel as a firewood boilers, only 5 lose-m3/a per unit and save about 730 toe light oil annually. If one calculates a figure for former years built fireplaces of houses saving will be ten times bigger 7.500 toe/a.

26

Table 8. Estimated longterm socio-economic effects for fireplace heating.


ResultsTotal investment cost of the project (kEUR) 4.562,00Investment per saved toe (kEUR / toe) 8,37

A - Contribution to the Regional DevelopmentRegional subsidy multiplier (ratio) 29,82Regional activity (kEUR) 5.564,00Net regional incomes (kEUR) -691,66Regional benefit(kEUR) 7.073,98Regional return on investment (ISD %) 6,06%Duplication of the project (number) 1,00Potential for dissemination: regional know-how Y institutional and regulation incentive Y political wilingness Y financing means Y awareness of politicians, users, managers Y non-economic obstacles N

B - Contribution to employmentWork regional content (cap. X year) 68,23Work regional intensity (cap. /year /10kEUR) 0,15Avoided unemployment (cap.) 12,00Social cost of employment (kEUR/cap.) 1.078,38



E - Contribution to Environmentt CO2 equivalent saved for the project life time 21.214,13kg SO2 equivalent saved for the project life time 0,00kg NOx equivalent saved for the project life time 17,17Noise impact +Fauna, flora, water impact oVisual impact +++

27

Figure 7. Regional economic flows of fireplace heating. 1€ of regional subsidy in 1 years created 29.8 € of investment into fireplaces on wood logs and saved 3.56 toe/year of energy from extra light fuel oil therefore decreased 9.24 t/year of CO2. 1€ of subsidy created 3 € of regional added value and 46 € of benefits for the region.

Profitability for all users increases costs to the wood log end users that exchanged the extra light fuel oil for 281.000 € per year, and according the to the fossil fuel price rise it decreases every year. Regional incomes are sold services less the profitability of the end user discounted for the project lifetime and added the regional income for selling the fireplaces and servicing it. It sums up to -691.660 € for Central-Finland for the lifetime of the all 973 fireplaces and brings public incomes in the sum of 2.957.600 €. These includes difference of taxes on fuels, taxes and social charges of regional incomes of investment and services of the fireplaces, VAT of the investment and fireplaces, and savings for 12 unem-ployed people if it weren’t the project. Regional activities have increased while the wood logs had to be produced and sold for 973 fireplaces around 471.330 € yearly, so this money stays in the region.



7073,98 kEUR



Regional Incomes- 691,66 kEUR








545,00 toe/year

28

The whole fireplace process from assembling, selling, transporting, installing and maintaining the fireplace and also producing wood logs and the end firing fireplace employ in average 68 persons per year for all fireplaces or more likely the quantity of direct and indirect work carried out by regional companies sums up to other persons per year.

Regional benefit is the money not spend on imported fossil fuel, added value of services and selling the fireplace and the income that stays in the region because of the project and it sums up for whole 973 fireplace’s lifetime to 7.073.980 €. So if invested 4.562.000 € the internal rate of return is 6.1 % if regional benefit is discounted by 10.38 %.

4.1.3 LITERATURE

Paananen, M., 2007. Bioenergiasta elinvoimaa klusteriohjelma 2007-2015. Jyväskylä. Jyväskylä Innovation Oy. 37 p.

Mainio, T., 2008. Omakotirakentajilla vaikeuksia lämmitysmuodon valinnassa.

Helsingin Sanomat. Monday 4th of August 2008, p. a4.

Saari, M., 2004. Malaenergiatalot ja sähkölämmitys. Espoo. VTT, Rakennus- ja yhdyskuntatekniikka. PowerPoint presentation, 40 p. www.sahkolammitysfoorumi.com/VTT-matalaenergiatalo.pdf.

29

4.2 France

Socio-economic effects of the new firewood stoves and boilers in households in one year


Elvire model was used for boilers under 2 different assumptions:

1. Subsidy of 50% for renewing an old firewood boiler and for substituting a firewood boiler for a fossil boiler.

2. Tax credit of 40% for renewing an old firewood boiler and no tax credit for substitution.

Assumption 1 describes the current situation in France from 1st January 2006 and valid until 31st December 2009. However tax credit system will possibly be changed in 2009. Therefore assumption 2 describes the theoretical situation in 2009.

Elvire model under assumption 1 is Excel file “French Model ELVIRE boiler”.

Elvire model under assumption 2 is Excel file “French Model ELVIRE boiler2”.

About 40 millions of steres1 are used for households heating in France (Firewood report based on national survey of households in 2006 – CEREN 2008). They represent 68 MWh or 5.9 toe2. About 1 house on 3 (36%) uses firewood as a heating energy source and on average, on house consumes 7 steres per year. About 50 % of used firewood is bought by consumers (Consumers’ behaviour study – BVA/ADEME 2008). But according official statistical, only 20 % of firewood is sold on official market.

Firewood is mainly used in closed fireplaces (about 50 % of firewood consumption).

In the model we considered 3 cases:

1. Renewal : Old firewood equipment by new equipment

2. Substitution : Firewood instead of L-fuel energy

3. New installation : Firewood boiler installed instead of L-fuel boiler

Our objective is to compare 2 situations:

a. These 3 cases happen: old firewood equipment is renewed, firewood energy substitutes L-fuel energy and firewood boiler is preferred to L-fuel boiler in new house

1 Stere is equivalent to say stacked volume. 2 1 stere = 1 700 KWh 1 stere = 0.147 toe

30

b. Theses 3 situation don’t happen: old firewood equipment is not replaced, L-fuel energy stays and no installation of firewood boiler.

Table 9 : Summary of input data used in Elvire model*

Situation a

With project

Situation b

Without project

Cases Renewal Substitution New

installation

No

renewal

No

substitution

No new installation

Tax credit

Assumption 1

50% 50% 50% 0% 0% 0%

Tax credit

Assumption 2

40% 0% 0% 0% 0%

Number of boiler installed / year

11

(52 %)

8

(37 %)

2

(11 %)

11

(52 %)

8

(37 %)

2

(11 %)

Investment €

(equipment + service)

65 400 46 800 13 800 * * *

Subsidy

Assumption 1

24 525 17 550 5 175 * * *

Subsidy

Assumption 2

19 620 0 0 * * *

Consumption toe / year

24 14 4 24 14 4

*See file “France - background data for boilers” to see the data used in the model.

31

Based in a study on market of wood heating equipment in 2006 (Observ’ER/ADEME 2007), we assumed that among annual installed equipments, 52% fit renewal case, 37% fit substitution case and 11% fit new installation case.

We made the assumption that old firewood boiler output is 60% and that new firewood boiler output is 55%. In order to provide the same amount of energy for heating, an old boiler needs to burn more firewood than a new one. Here are the average annual consumption entered into Elvire model:

- Unitary consumption of an old firewood boiler: 14 steres / year equivalent to 23.8 MWh/ year or 2.05 toe/year.

- Unitary consumption of a new firewood boiler: 12 steres / year equivalent to 20.4 MWh/ year or 1.75 toe/year.

32



A - Contribution to the Regional DevelopmentRegional subsidy multiplier (ratio) 2,67Regional activity (kEUR) -107,91Net regional incomes (kEUR) -143,52Regional benefit(kEUR) -92,13Regional return on investment (ISD %) #DEL/0!Duplication of the project (number) 1,00Potential for dissemination: regional know-how Y institutional and regulation incentive Y political wilingness Y financing means Y awareness of politicians, users, managers Y non-economic obstacles N

B - Contribution to employmentWork regional content (cap. X year) 1,49Work regional intensity (cap. /year /10kEUR) 0,12Avoided unemployment (cap.) 12,00Social cost of employment (kEUR/cap.) 160,31

C - Contribution to Public FinancesPublic finances receipts (kEUR) -20,17Payback period on public finances (year) -16,45


E - Contribution to Environmentt CO2 equivalent saved for the project life time 462,34kg SO2 equivalent saved for the project life time 0,00kg NOx equivalent saved for the project life time 0,61Noise impact oFauna, flora, water impact -Visual impact o

4.2.2 Results from the ELVIRE model of France

Table 10 : Estimating logterm socio-economic effects

33

Regional socio-economic flows generated by the project

Regional BenefitRegional Return on Investment #DEL/0!

- 92,13 kEUR



Regional Incomes- 143,52 kEUR

Public Receipts- 20,17 kEUR







17,82 toe/year

Figure 8. Regional economic flows of fireplace heating.

34

4.3 Slovenia


Slovenia case: Socio-economic effects of subsidizing 620 of boilers on wood biomass in households in years 2002-2006 for the whole region of Slovenia Slovenia started financial supports for RES in 1990. There were a lot of changes in the organisational approaches and also in the terms of continuity, types and amounts of subsidies. In the selected years 2002-2006 the Ministry for Environment and Spatial Planning trough the Agency for Efficient Use and Renewable Energy www.aure.si supported the investments in RES and cogeneration with subsidies for investment projects. The subsidies were foreseen in the each year budget, the available amount of money for supports is limited. The public tender was issued by the Agency for Efficient use and Renewable Energy once a year. For the RES investments in biomass boilers the subsidy was up to 5.000 € per investment. The call is launched every year for a one year period or until the available resources run out.

A typical household has an average area of 74,6 m² and 2,9 people are statistically living in it.

The average energy consumption and (as far as known) is:

Heating: 11.125 kWh/a (= 149 kWh/m²/a) Electricity: 1.854 kWh/a (= 25 kWh/m²/a) Hot Water: 2.726 kWh/a (= 36,5 kWh/m²/a)

The most commonly used energy sources in households are light fuel oil for space heating (~42%), electricity and light fuel oil for water heating (both ~38%), wood and wood wastes for cooking (~90%) and electricity for other applications (100%).

(Source: Statistical Office of the Republic of Slovenia, www.stat.si/doc/statinf/2004/si-257.pdf). The total number of buildings in Slovenia amount to 463 029 and the number of dwellings is 777 772. Most dwellings (17%) were built in the 1960s and the second highest share (13%) belongs to apartments older than 100 years.

In detail, the number of houses is distributed as follows:

Individual houses: 379 519 Duplex: 30 781 House, rural outbuilding 32 761 Multi dwelling house 18 005 Other 1 �f0 Total 463 029

35


ResultsTotal investment cost of the project (kEUR) 2.780,01Investment per saved toe (kEUR / toe) 3,77

A - Contribution to the Regional DevelopmentRegional subsidy multiplier (ratio) 3,78Regional activity (kEUR) 246,11Net regional incomes (kEUR) 828,90Regional benefit(kEUR) 4.641,34Regional return on investment (ISD %) 9,02%Duplication of the project (number) 1,00Potential for dissemination: regional know-how Y institutional and regulation incentive Y political wilingness y financing means Y awareness of politicians, users, managers y non-economic obstacles n

B - Contribution to employment Work regional content (cap. X year) 142,05Work regional intensity (cap. /year /10kEUR) 0,51Avoided unemployment (cap.) 16,00Social cost of employment (kEUR/cap.) 56,09


D - Contribution to sustainable developmentNon-renewable primary energy saved (toe/year) 737,59Stimulation of less developed aresa YFight against social exclusion nLand planning contribution YAction for insertion y

E - Contribution to Environment t CO

2 equivalent saved for the project life time 23.443,44kg SO

2 equivalent saved for the project life time 241,19kg NO

x equivalent saved for the project life time 15,49Noise impact oFauna, flora, water impact ++Visual impact o

Source: www.aure.si, 2008.

4.3.2 Results from the ELVIRE model of Slovenia

Table 11 : Estimating longterm socio-economic effects

Subsidised wood biomass boilers in years 2002-2006

No. of wood biomass boilers 620 SIT € kW installed

Investment 666.201.258 2.780.009 19.076

Subsidy 176.270.552 735.564

Average per one biomass boiler 4.484 1.186 31

36

Figure 9. Regional economic flows of fireplace heating.

In the model we used 620 subsidized boilers and their investment and subsidy for the whole Slovenia. All boilers had to be with special high efficiency, low CO and dust emissions and also with the heat accumulator. Those were the conditions for subsidizing the boilers. Max amount of subsidy per boiler was 1.250 €.

The consumption for hot water and heating is average 13,8 MWh/a with average 31 kW of boiler on wood biomass. We assumed that 5 % of investment in the boiler is produced or assembled in Slovenia and 80 % of services installing, selling and servicing the boiler the labour is from Slovenia. The activity induced with buying and using the wood log boiler is producing wood logs (annual fuel costs without VAT for wood logs includes all investments and costs of fuel wood production). For activity lost in region we calculated the fall in turnover of the energy companies offering extra light fuel oil that is substituted by wood logs.



4641,34 kEUR

Profitability for Users- 104,05 kEUR/year










737,59 toe/year

37

1€ of regional subsidy in 4 years (subsidy for boilers issued every year for 4 years from 2002-2006) created 0,27 € of investment into boilers on wood logs and saved 0,99 toe/year of energy form extra light fuel oil therefore decreased 0,31 t/year of CO2. 1€ of subsidy created 0,22 € of regional added value and 6,3 € of benefits for the region.

Profitability for users decreases costs to the wood log end users that exchanged the extra light fuel oil for 104.000 € per year from 2007 year on, and according the to the price rise it increases every year. Regional incomes are sold services less the profitability of the end user discounted for the project lifetime and added the regional income for selling the boiler and servicing it. It sums up to 828.000 € for Slovenia for the lifetime of the all 620 boilers and brings public incomes in the sum of 170.000 €. These include difference of taxes on fuels, taxes and social charges of regional incomes of investment and services of the boilers, VAT of the investment and boilers, and savings for 16 unemployed people if it weren’t the project.

Regional activities have increased while the wood logs had to be produced and sold for 620 boilers around 164.000 € yearly, so this money stays in the region.

We took an average of investment costs and prices for period 02-06, the whole process from assembling, selling, transporting, installing and maintaining the boiler and also producing wood logs and the end firing boiler employ in average around 142 persons per year for all 620 subsidised boilers or more likely the quantity of direct and indirect work carried out by regional companies sums up to 142 persons per year. Avoided unemployment is estimated, if there was no demand on wood logs, we would not need six people to assemble boilers, one to sell them, two to deliver and montage them, and one to service them. We would not need also 3 farmers for cutting and loading the trees, one for chopping and sawing and one for storage and the end chimney man altogether sums up to 16.

Regional benefit is the money not spend on imported fossil fuel, added value of services and selling the boiler and the income that stays in the region because of the project and it sums up for whole project lifetime to 4,6 mio €. So if invested 2.780 mio € the internal rate of return is 9 % if regional benefit is discounted by 7 %.

38

9761

9993

9993 1022

6

1010

9

1034

2

9993 10

807

1080

7

1069

0 1220

1

1243

3

1255

0

1278

2

1301

4

1243

30

2000

4000

6000

8000

10000

12000

14000

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

kWh/

hous

ehol

d

4.4 Spain

Spanish case: Socio-economic effects of new firewood stoves and boilers in households in year 2009 in Navarra

In Spain the financial support for the RES heating began around 2004-2005 with the subsidies to RES production. Investment subsidies were given to biomass heating installations which used biomass as household heating fuel. The legislation and thus the financial support have been different in each autonomous region. Andalucia and Cataluña were the first ones introducing this support. However, nowadays, all the autonomous regions have their own legislation. The subsidies, which are usually around 30%, vary depending on the autonomous region, the size of the heating systems, and the kind of heating system (boiler, stove, fireplace…).

According to the statistics, in Spain a typical household has an average living space of 86 m² and 2,9 people live in it.

Figure 10. Total Energy Consumption in households. Source: M.M.A. (2007)

The average energy consumption in single houses has been increasing during the last years as seen in Figure 1. The increment in between 1991 and 2006 has been of the 21.5%.

The energy consumption distribution as far as known is the one shown in Figure 2. Heating uses more than 40 % of Spanish houses energy consumption, whereas the average in the EU approaches 68 %. Lowest consumption in Spain is largely explained by its climate.

39

9,4%

14,5%

37,5%

38,6%

0 10 20 30 40 50

Colective heating

No heating

Electric devices

Individual heating

3,2%

16,7%

27,6%

50,6%

0 10 20 30 40 50 60 Others

Solid Fuels

Electricity

Oil

Gas

50,2; 0,4%

1129,5; 9%1355,4; 10,8%1506; 12%

3275,55; 26,2%

5233,35; 41,7%

0

1000

2000

3000

4000

5000

6000

Heating Hot Water ElectricDevices

Cooker Lighting AirConditioning

kWh/

hous

ehol

d

Figure 11. Total Energy Consumption distribution in households. Source: IDAE (2006)

On average it is used about 61 kWh/m²/a for heating, which is lower than in northern European countries due to the warmer climate in Spain. A typical annual use of electricity is 47 kWh/m2, including the use of electric devices, cookers, lighting and air conditioning. Thus, in an average size of the house it would be around 4100 kWh per year. An average need of energy for producing hot water is 1100 kWh/person/a.

It is important the fact that more than the 50% of Spanish households do not have heating installation (Figure. 3), thus electric devices are used for heating, increasing electricity consumption. It should be considered that this fact is mainly determined by the climate, which varies widely along the country. Thus, while in the southern part there is no need of heating installation; in the north part it is essential.

Nowadays from the 48 % of households that have heating systems (Figure. 3), 50.6 % use natural gas as fuel (Figure 4). This increment of the natural gas in the last decades has caused oil consumption decrease.

Figure 12. Households according to heating system. Source: Caixa Catalunya from INE(2007)

Figure 13. Households according fuel used in. Source: Caixa Catalunya from INE(2007)

40

Before the decades of the fifties and sixties, firewood and wood charcoal household heating was one of the most common used heating systems. After those years, the decay of its use is mainly explained by the implementation of both oil and gas use. Nowadays, step by step, the use of firewood is becoming again more common in rural areas, holiday cottages and in new houses built in the outskirts of the cities. This increment is mainly due to the price increment of other fuels and also because of the pleasure that involves this kind of heating system. Anyway, it should be considered that most of Spanish population lives in flats, without firewood fireplaces or stoves, which main heating system is the gas or oil one.

4.4.1 Results from the ELVIRE model of Navarra

There has been used the Elvire model for the data of the province of Navarra (in the northern part of Spain) for firewood boilers. It has been carried out a hypothetical case of installing 5 firewood boilers in the province. It has been impossible to use the real number of boilers, since it is zero. Firewood boilers are not common in Spain, and they are not so used as pellets or chips boilers. In fact there is not any firewood boiler installed in Navarra. Thus, the hypothetical case of 5 new installations has been studied.

Many figures in the model are given after the best assumption, because it was impossible to get all values precise for figures from statistics, industry or individuals.

In the model we used 5 new firewood boilers installed annually with subsidies in Navarre. All boilers were assumed to be highly efficient, low CO2 and dust emissions and also with a hot water tank. Average price is 4500 € without assembly etc. If boiler burns 10 loose-m3 of birch firewood; that means growth of 7.3 toe/a of the use of firewood in new systems and regional investments.

We estimated subsidies in the sum of 6800 €, 30% of sold equipment.

The average consumption of heating in an ordinary house of Navarra is around 8.5 MWh/a. We assumed that 5% of the investment in the boiler is produced or assembled in the region and 80% of services installing, selling and servicing the boiler the labour is from Navarra.

41



A - Contribution to the Regional DevelopmentRegional subsidy multiplier (ratio) 4,00Regional activity (kEUR) 38,43Net regional incomes (kEUR) -1,63Regional benefit(kEUR) 44,03Regional return on investment (ISD %) 8,45%Duplication of the project (number) 1,00Potential for dissemination: regional know-how Y institutional and regulation incentive Y political wilingness Y financing means Y awareness of politicians, users, managers Y non-economic obstacles N

B - Contribution to employmentWork regional content (cap. X year) 6,42Work regional intensity (cap. /year /10kEUR) 2,38Avoided unemployment (cap.) 12,00Social cost of employment (kEUR/cap.) 6,10


D - Contribution to sustainable developmentNon-renewable primary energy saved (toe/year) 7,30Stimulation of less developed aresa YFight against social exclusion nLand planning contribution yAction for insertion y

E - Contribution to Environmentt CO2 equivalent saved for the project life time 189,44kg SO2 equivalent saved for the project life time 0,00kg NOx equivalent saved for the project life time 0,25Noise impact oFauna, flora, water impact ++Visual impact o

Table 12. Estimated longterm socio-economic effects for firewood boilers.

42

Figure 14. Regional economic flows of firewood boilers. 1€ of regional subsidy in 1 year created 4 € of investment into 5 boilers on wood logs, and saved 0,001 toe/year of energy from extra light fuel oil, therefore decreased 2.85 t/year of CO2.

1 € of investment into 5 firewood boilers, created in one year 1.63 € of benefits for the region and saved 0,00027 toe/year of energy from extra light fuel oil, therefore decreased 0.70 t/year of CO2

Profitability for all users increases costs to the wood log end users that exchanged the extra light fuel oil for 2.420 € per year, and according to the fossil fuel price rise, it decreases every year. Regional incomes, are sold services, less the profitability of the end user, discounted for the project lifetime and, added the regional income for selling the boiler and servicing it. It sums up to -1.630 € for Navarra for the lifetime of the 5 boilers and brings public incomes in the sum of 23.300 €. This includes differences of taxes on fuels, taxes and social charges of regional incomes of investment and services of the boilers, VAT of the investment and boilers, and savings for 12 unemployed people if it weren’t the project. Regional activities have increased while the wood logs had to be produced and sold for 5 boilers around 8.500 € yearly, so this money stays in the region.

The whole boiler process from assembling, selling, transporting, installing and maintaining the boiler and also producing wood logs and the end firing boiler employ in average 4 persons per year for all 5 boilers or more likely the quantity of direct and indirect work

43

carried out by regional companies sums up to 6 persons per year. Avoided unemployment is estimated, if there was no demand on wood logs, we would not need three people to assemble boilers, one to sell them, two to deliver and montage them, and one to service them. We would not need also 2 farmers for cutting and loading the trees, two for processing and delivering firewood and the end chimney man altogether sums up to 18.

Regional benefit is the money not spend on imported fossil fuel, added value of services and selling the boiler and the income that stays in the region because of the project and it sums up for whole 5 boiler’s lifetime to 44.030 €. So if invested 27.000 € the internal rate of return is 8.4 % if regional benefit is discounted by 7 %.

44

Results Total investment cost of the project (kEUR) 5.394,00 Investment per saved toe (kEUR / toe) 6,01 A - Contribution to the Regional Development Regional subsidy multiplier (ratio) 4,64 Regional activity (kEUR) 4.213,58 Net regional incomes (kEUR) 1.528,59 Regional benefit(kEUR) 4.265,84 Regional return on investment (ISD %) 5,27% Duplication of the project (number) 830,00 Potential for dissemination: regional know-how Y

institutional and regulation incentive Y

political wilingness Y financing means Y awareness of politicians, users, managers Y non-economic obstacles n B - Contribution to employment Work regional content (cap. X year) 10,18 Work regional intensity (cap. /year /10kEUR) 0,02 Avoided unemployment (cap.) 46,00 Social cost of employment (kEUR/cap.) DOBAprojekta??? 108,99 C - Contribution to Public Finances Public finances receipts (kEUR) 2728,82 Payback period on public finances (year) 0,04 D - Contribution to sustainable development Non-renewable primary energy saved (toe/year) 897,93 Stimulation of less developed aresa Y Fight against social exclusion n Land planning contribution Y Action for insertion y

4.5 Austria

Results from the ELVIRE model - Estimating longterm socio-economic effects

Table13. Estimated long term socio-economic effects for Austrian example

45

Figure 15. Socio-economic flows generated



4265,84 kEUR








Regional Activity 396,85 kEUR



897,93 toe/year

46

4.6 Norway

Socio-economic effects of introduction of new stoves and fireplaces from 1998 – 2008 in Norway.

Background

In 1998 new regulation came for particle emissions in Norway. This was a result from a research program to establish test methods for particle emissions and resulted in the Norwegian standards NS3058 and NS3059. Requirements after these standards are regulated by law in the Norwegian building regulation. Based upon this work there have been developed new technologies that have reduced the particle emission from firewood in Norway with more than 75% and increased the efficiency. In 2006 the particle emission was reduced with 14000 ton and there were produced 0.9TWh more heat due to increase of efficiency.

Use of firewood has increased during the latest decade. The variations from 1990 to 2007 are given in figure 1.

Firewood consumption i 1000 ton

Year Source:SSB

Figure 16. Firewood consumption in Norway 1990 - 2007

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Norway has only 1 % of district heating and nearly 80% of the energy for household is covered by electricity. Use of firewood covered about 15% of the energy use in households. This is illustrated in figure 2.

Figure 17. Sources for use in households. Source: Energibedriftenes Landsforeneing

Lack of district heating and use of electricity for room heating is typical for Norway and make the heating situation in Norway different compared with many other countries in Europe were district heating is usual.

Due to increasing electricity prices, firewood has become more popular for heating and installations of new stoves/fireplaces have reduced the emissions and increased the efficiency. New clean burning stoves and fireplaces have been installed from 1998 and to day approximately half of the firewood is burned in stoves/fireplaces with new technology.

In this case study there have been study the socio-economic effects when changing to new clean burning stoves/fireplaces in Norway during period 1998 – 2008 and results from the ELVIRE model is given.

Results from the ELVIRE model for replacement of stoves/fireplaces in Norway during the period 1998 – 2008.

In the model there is estimated that approximately 50% of the firewood is used in new clean burning stoves/fireplaces. The increasing of heat production from firewood replaces electricity that is produced by hydro power. Hydro power is a renewable energy and we therefore got no none-renewable energy and CO2 saved in this study.

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The estimated investments are 625.000 € with return of nearly 97%. Numbers from the ELVIRE model are given in figure 3 and 4.

Figure 14. Estimated long term socio-economic effects

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Figure 18. Socio-economic flows generated

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5. Summary and conclusions Energy from wood is an important source and man's permanent companion throughout his development. Wood, however, was/is not present in unlimited quantities. Where it was excessively exploited survival was no longer possible. Wood ensured existence but not exceptional development of civilization. A great developmental swing started only with the use of fossil energy. As long as wood was an important energy source a lot of wood was used for energy purposes and consequence was shown in forests because they were intensely exploited. In Slovenia 50 years ago wood stock was only 140 m3/ha, today it is twice as much. Today we are looking back at it as an important (renewable) energy source, again.

Its importance is even greater because firewood means mostly forest wood which makes forests, forestry and forest owners – in principle all local figures - a very important element of the firewood equation. Very often forest owners are also farmers and forest products part of their economy. With the above mentioned development agriculture and farmers lost a great deal of their weight they used to have. More often than not farmers are linked with the so called underdeveloped regions. Biomass (and hence also firewood as in many cases still the prevailing form) use and production is therefore important for them. Socio-economic analysis wanted to see how much.

The task of socio-economic impact assessment of the firewood production and use through a calculation model proved to be harder than expected. Already finding and adapting of the model took a big deal more time than foreseen. Lack of support was to be found where at least expected - from relevant European institutions. Also the use of the model was not simple and it took some time just for the two (three) case studies. At this point there would be a need to educate other partners via a workshop, for which however there was not enough time/budget available.

The other part of the equation – problem is in the (un)availability of the relevant data. Although surveys and questioners were used they were hard to obtain. For more clear picture of the socio-economic effects of the firewood use therefore a more clear picture of the status quo would be needed in the first place. A task, however, that vastly exceeds the scope of the Quality Wood project and would need a project by itself. For the relevant comparison among countries we would further need some kind of unification in case studies, which is another quite impossible task as the conditions (and data available) vary a great deal from country to country.

In fact it was found out that the Elvire model was actually used already before in Slovenia. In year 2000 ApE prepared a study on biomass potential for energy use in Slovenia which represented the expert base for the “Operativni program energetske izrabe lesne biomase v Sloveniji” (operational program for biomass energy use). It comprised the goals, objectives

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and directions of the National Energy Programme for the part of Renewables for the next 10 years, till 2010. Based on the goal set – 12 % of the primary energy (heating) from biomass targets for the number of yearly installed biomass heating facilities (bigger for industrial use and district heating systems and smaller for households) was set. In order to achieve that goal adequate subsidies schemes would be needed. For its preparation also Elvire model was used. So on behalf of this model, we actually could estimate the socio economic effect of the subsidy for the firewood boiler in this project.

Model is therefore suitable for regional/local use in assessing the planned measures or projects if one wants to learn also about the so called external effects and not just plain profit and rate of return deal. At least as long as it is used by people with some knowledge in economics. However is a rather complex one and a more precise guidelines would help a great deal in its user friendliness. Furthermore statistical data used; such as tax rates, wages, employment rate, social transfers, etc has to be first available and then also updated.

The results nevertheless have shown positive impacts of the firewood use.

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References

[1] Directorate general for Energy (DG XVII), ELVIRE Evaluation Guide for Reenewable Energy Projects

[2] Krajnc, N., 2005, Ocenjevanje izbranih cocialnoekonomskihin okoljskih posledic rabe lesne biomase, Doktorska disertacija, Ljubljana

[3] Domac, J. and Richards, K., IEA Bioenergy, Socio-economic Drivers in Implementing Bioenergy Projects: An Overview

[4] European Commission Community research. 2001, 2005. Socio-economic Projects in Energy and Environment

[5] Republika Slovenija, Ministrstvo za okolje in prosto, 2007. Operativni program rabe lesne biomase kot vira energije (OP ENLES 2007 -2013), Ljubljana

[6] Republic of Slovenija, Ministry of Agriculture, Forestry and Food, Slovenia Forest Service, 2005. State of the art of wood biomass preparation and use in Slovenia

[7] Zavod za gozdove Slovenije, 2007, Poročilo Zavoda za gozdove Slovenije o gozdovih za leto 2006. Ljubljana

[8] Ministrstvo za kmetijstvo, gozdarstvo in prehrano.2007. Poročilo os tanju kmetijstva, živilstva in gozdrstva v letu 2006. Ljubljana, p.140-150

[9] Gozdarski inštitut Slovenije, 2004. Izobraževanja svetovalcev zaSvetovanje na področju Pridobivanja, predelave in rabe lesne biomase pri individualnih uporabnikih, Ljubljana

[10] Krajnc, N., Dolenšek, M.Sodobna raba lesne biomase(potenciali in tehnologije)

[11] http://www.biohousing.eu.com/heatingtool/ [12] http://www.motiva.fi/fi/kuluttajat/pientalonlammitysjarjestelmat/ . [13] Paananen, M., 2007. Bioenergiasta elinvoimaa klusteriohjelma 2007-2015. Jyväskylä.

Jyväskylä Innovation Oy. 37 p

[14] Mainio, T., 2008. Omakotirakentajilla vaikeuksia lämmitysmuodon valinnassa. Helsingin Sanomat. Monday 4th of August 2008, p. a4.

[15] Saari, M., 2004. Malaenergiatalot ja sähkölämmitys. Espoo. VTT, Rakennus- ja yhdyskuntatekniikka. PowerPoint presentation, 40 p. www.sahkolammitysfoorumi.com/VTT-matalaenergiatalo.pdf

(Deliverable 3) Quality Wood project – EIE/06/178/SI2.444403 · 2014-08-11 · (Deliverable 3)...

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Transcript of (Deliverable 3) Quality Wood project – EIE/06/178/SI2.444403 · 2014-08-11 · (Deliverable 3)...