Market Development

Market Development

Pellet use in North America is generally more common in areas where forestry residues, the primary feed stock, are common; where there is a strong tradition of burning wood for heat; and where local pollution control regulations ban or discourage the use of wood-burning appliances.

In much of Europe, pellet use is common where heating oil is widely used and pellets are made economically competitive through tax policies.

Many areas of North America where warm-season grasses might be used for pellet production have long enjoyed relatively low-cost space-heating fuels, predominately natural gas, and at a somewhat higher cost, propane and electric heat pumps. The charts below show the results of analyses indicating pelletized herbaceous energy crops like warm-season grasses are comparable in cost to other common alternatives, although natural gas prices have become more volatile in recent years and are expected to increase significantly for the 2002-2003 heating season. To achieve market penetration, pellets must cost less, be reliable, and provide convenience similar to other fuels. Various governmental units in many countries have also made increased biomass energy displacement of fossil fuel a strong component of their energy policies and implementation programs.

Switchgrass Fuel-Pellet Production In Eastern Ontario: A Market Study

R. Jannasch, R. Samson, A. de Maio, and T. Helwig
Resource-Efficient Agricultural Production (REAP)-— Canada,
Box 125, Ste. Anne de Bellevue, Quebec, H9X-3V9

Executive Summary
"Following successful switchgrass field production and laboratory pelleting trials, a market study for developing a switchgrass pellet fuel industry in eastern Ontario was conducted by REAP-Canada in 2001. The study consisted of (1) a farmer survey and focus group meetings, (2) a land-availability assessment, and (3) an analysis of the current wood-pellet industry and energy markets. The work took place between February and November 2001."

www.reap-canada.com/Reports/PelletMarketStudy.htm

Changing Behaviour: Comfortable Use of Wood Pellets in One-family Houses in Jämtland County, Sweden

"Energikontoret has, in co-operation with the Swedish Energy Agency, carried through the project "Comfortable use of wood pellets in one-family houses" in Jämtland County from June 2001 until May 2002. The national and international background for the project was the work which aims to reduce the emissions of greenhouse gases. Combustion of wood pellets does not affect the amount of greenhouse gases in the atmosphere. The goal for the project was to make it easier for owners of one- family houses to start using wood pellets and increase of the use of wood pellets in one-family houses."

www.managenergy.net/products/R86.htm

Overview: Regional Implementation of Small-Scale Biomass in Upper Austria

"Upper Austria is a highly industrialised area with a population of 1.4 Mio. inhabitants and a surface of 11,980 km2. In 1993, the first Upper Austrian Energy Plan was passed, which defined concrete goals to reduce fossil-fuel consumption by increasing both energy efficiency (EE) and use of renewable energy sources (RES) by the year 2000. This plan lead to an increase of RES from 25% in 1993 to 30% in the year 2000, including, for example, 15.000 modern automatic wood-heating systems. In the year 2000, this successful first phase of the energy action plan was continued with the "Energy 21" strategy. Again, concrete goals were defined (to be reached by 2010), including (among others) doubling the share of modern biomass heating systems and thermal solar collectors, and reducing energy consumption for heating and hot water supply by 20%."

www.managenergy.net/products/R85.htm

Overview: Vörå Municipality in Finland – A Forerunner in Biomass Heating

"Vörå municipality located in the Ostrobothnia region in western Finland is a forerunner in the use of biomass for heating purposes. Since 1993, the municipality has worked towards conversion of all municipal buildings to biomass heating. By 2003, around 95% of the buildings will be heated with biomass. This has been possible thanks to long-term political commitment; foresighted and motivated officials; and use of various types of heating systems such as heating entrepreneurship, wood-chips heating, and wood-pellet heating. The case shows that an energy strategy may be more effective than a detailed energy plan, and that positive experiences in the public sector also spread to the private sector."