Market demand for wood fuels and potential users
Transcript of Market demand for wood fuels and potential users
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Market demand for wood fuels and potential users
Supporting public sector investment in wood energy
Steve Luker
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Wood is the major source
for all renewable
energy generation
in the EU = 59%
Source: UN Economic Commission for Europe 2008
The role of wood energy
In mostly 89%
wood
11% plant and animal biomass,
Waste, landfill gas etc
Out mostly heat
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Fuel costs drive the wood energy sector
In 2011
Oil costs (62 cents/litre)
= €60/MWh
Wood costs (€89/tonne)
= €27/MWh
So wood under half the cost of oil
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Where does wood energy work?
Regional Hospital
Lesiure centre
Secondary school
Primary school
Typical UK house
Passive home
4000
2500
1500
250 10 1
Typical energy use in MWhs per year
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Known wood chip opportunities
Sites Boiler capacity
Cost Wood pa Annual savings
Carbon saved
FTE Jobs
All 10 8,521KWs €5.6 million 7,500 tonnes
€600,000 6,350 tonnes
17
Average per site
852KWs €560,000 750 tonnes €60,000 635 tonnes 1.7
About 30 sites reviewed within the public sector estate
10 schemes being taken forward
In hospitals, educational institutes and leisure centres
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Retro-fitting wood boiler systems
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What can go wrong?
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Integration of fuel supply with system design
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Poor planning and design
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No plan for operation and maintenance
Commissioning and handover
Training for the site staff
Cost effective maintenance
and back up services
Better to buy heat?
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No investment cash
Energy Services Contracts (ESCOs) can solve this
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What is an ESCO?
The (wood energy) supplier designs and installs the wood energy system, finances it, operates it and provides metered heat. This overcomes the problems.
One integrated supplier for fuel and equipment
One expert designer
One supplier of O&M
No capital outlay
Risks low in retro fit situation
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Who provides ESCOs
They are partnerships:
Installers/suppliers/energy companies
Banks and finance providers
Local wood chip suppliers
Local service engineers
Local hauliers
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Possible ESCO companies
Aurora Energy Ltd
North Kerry Wood Chip
Justen Energitcknik/Igneus
Clearpower
Imperative Energy
John Sisk/Wood Energy
Dalkia
Rural Generation
Econergy
Irish Utilities
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What a 15yr ESCO looks like
Medium heat user (small hospital, large leisure centre or school for example)
Current oil use 277,000 litres a year
Costing €172,000 a year (2012)
By 2026 that might be €341,000 a year (@5%)
Do nothing not a good option (even without new carbon taxes)
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What a 15yr ESCO looks like
925KW wood boiler
Costs €885,000 inc of finance and planning
790 tonnes a year of wood chips
Operational costs:
So €1,951,832 of simple savings (ex finance/profit!) over 15 years
Year 0&M Wood chips Back up oil Total costs
2012 Oil €172,000
2012 Wood €3,815 €68,672 €17,239 €89,726
15yr Wood €70,957 €1,325,069 €371,984 €1,768,010
15 yr Oil €3,719,842
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What an ESCO looks like
The average monthly savings =
Higher revenue savings if:
Capital allowances are used
Faster rises than 1.5% between oil/wood
Over 15 year contracts
Profit under 20%
Monthly capex Monthly heat Monthly cost inc profit
Monthly ‘do-nothing’
€4,935 €9,822 €17,708 €20,665
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The fuel supply chain to meet this new market
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Finally carbon savings