ENERGIEVERWERTUNGSAGENTUR
Austrian experiences with the introduction of pellets as a fuel
Christian Rakos, Energieverwertungsagentur
Juha Rautanen, Motiva
ENERGIEVERWERTUNGSAGENTUREnergy in Austria
Hydropower14,6%
Other Renewables
12,1%
Fossil fuels73,3%
ENERGIEVERWERTUNGSAGENTUR
Renewable energy without Hydropower
Fuel wood60%
Wood wastes16%
MSW5%
Heat pumps 4% Black liquor13%
Others2%
Solar thermal 1,1%Biogas and Biodiesel 1,1%Geothermal 0,1%Wind and PV 0,0%
Source: ÖSTAT 1997
ENERGIEVERWERTUNGSAGENTURWood heated dwellings in Austria
0
100.000
200.000
300.000
400.000
500.000
600.000
700.000
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998
Number of wood heated dwellings
woodchip boilers
pellet boilers
modern logwood boilers
all other dwellings were heated by old logwood boilers or wood stoves
ENERGIEVERWERTUNGSAGENTUR
Sales of domestic pellet boilers in Austria
4201.300
3.300
7.870
13.500
0
2.000
4.000
6.000
8.000
10.000
12.000
14.000
an
nu
al s
ale
s
1997 1998 1999 2000 2001
Quelle: Pelletsverband, 2000
Prognose
ENERGIEVERWERTUNGSAGENTUR
General factors that have supported diffusion kick off
Rapid advances in technology and design
Consumer interest - the first comfortable wood heating systems
Generally positive attitude towards wood as domestic fuel
ENERGIEVERWERTUNGSAGENTUR
Characteristics of the Austrian market for pellets
It is very young: emergence of pellets 1994 significant start up problems (as with any
new market) expansion despite relatively poor economic
frame conditions pellets created high enthusiasm among
public and businesses two markets:
• boilers for single family houses• boilers for blocks of flats
ENERGIEVERWERTUNGSAGENTUR
Main problems for market introduction
1) Pellet supply
2) Pellet delivery
3) Pellet storage at the customer
4) Pellet boiler
5) Installation and service
ENERGIEVERWERTUNGSAGENTUR1) Pellet supply
Supply security: major concern of potential customers!
Quality of pellets: low dust content and mechanical stability is fundamental for small boilers
• high dust content decreases boiler efficiency and causes operation failure
• pellets from waste wood had disastrous effects: slagging of boilers, discontinued operation
ENERGIEVERWERTUNGSAGENTUR2) Pellet delivery
Delivery vehicles must evacuate the dust simultaneously by blowing in pellets
must have adequate pumping force
should be able to weigh the pellets delivered
standardised connections to the house inlet necessary
drivers must be trained (e.g. to inspect the storage room)
ENERGIEVERWERTUNGSAGENTUR
3) Adequate pellet storage room necessary
dry
no electrical installations (danger of dust explosion)
solid walls
dustproof door
ENERGIEVERWERTUNGSAGENTUR4) The pellet boiler
Many companies jumped on the pellets train too fast
unreliable devices were introduced into the market (“testing in the market”)
frequent operational problems - negative impact on the image of heating with pellets
Since 1998 major Austrian equipment producers offer fully reliable boilers
ENERGIEVERWERTUNGSAGENTURTypical technical problems:
Overheating of the boiler: slagging of ashes
High temperature corrosion ash deposition in poorly designed heat
exchangers: up to 50% efficiency loss ash deposition in the burning zone serious back-burn problems unreliable pellet delivery from the storage
room to the boiler
ENERGIEVERWERTUNGSAGENTUR5) Installation and service
Installers have no experience with pellets
consequently they prefer to sell oil boilers
frequent mistakes in installations lead to operation problems
efficient and fast service is still missing (Service network is expensive)
new strategy of most advanced producers: service contract is sold with the boiler, 1 full service every year
ENERGIEVERWERTUNGSAGENTUR
6) Education of other related professionals
Architects: design of pellet storage and boiler room, convenient delivery of pellets
Planners of heating systems
Chimney cleaners: these could provide service of boilers - new business opportunity! Chimney cleaners could be a strategic partner: they know the old boilers that need to be replaced and can promote pellet boilers
ENERGIEVERWERTUNGSAGENTUREconomic situation
Pellet price: approx. 150 EURO/t incl. delivery and VAT (30 EURO/MWh)
Pellet boiler: approx. 10.000.- EURO incl. automatic storage retrieval and VAT
Subsidies: approx. 2000 - 3000 EURO depending on region
Reference cost for extra light fuel oil: approx 30 EURO/MWh; oil boiler: 4400 EURO incl. tank
ENERGIEVERWERTUNGSAGENTUR
How to introduce pellets successfully I
Create public awareness for pellets Demonstrate reliable pellet delivery Establish strict quality standards for pellets Establish strict quality criteria for pellet
boilers (high efficiency, low emissions and reliable operation)
poor boilers are a greater problem for long term market development than expensive boilers!
ENERGIEVERWERTUNGSAGENTUR
How to introduce pellets successfully II
Establish investment subsidies for boilers to kick start market development
Keep poor pellet boilers out of the market (e.g. by excluding equipment that does not meet standards from subsidies)
In DK level of subsidy was directly linked to emission standard - rapid improvements
Subsidies for education of professionals, measures to ensure quality, public relations
ENERGIEVERWERTUNGSAGENTUR
How to introduce pellets successfully III
Establish and test logistics for pellet delivery - ensure there is an immediate impression that supply is no problem
Educate and prepare professionals - especially installers before advertising
Establish a few demonstration plants that represent the state of the art for educational purposes (preferably by experienced technical experts)
ENERGIEVERWERTUNGSAGENTUR
Which market should be addressed first I ?
Large scale heating plants• +/- not sensitive to pellet quality• - very low prices of competing wet biofuels
blocks of flats• + lower specific costs of the boiler• + fewer actors that can be addressed directly• + less resources for fuel logistics and service
network• + can become a niche for developing the structures
to support diffusion in the domestic sector
ENERGIEVERWERTUNGSAGENTUR
Which market should be addressed first II ?
individual housing• + have higher conventional fuel costs than larger
users
• + large market
• + option: pellet stoves as “low barrier system”
• - high marketing costs
• - high initial requirements for fuel supply and service logistics
• - high requirements for education of professionals
ENERGIEVERWERTUNGSAGENTURThe Austrian choice
Individual houses: this choice was made by industry, that was used to deliver to this market. Mainly central heating systems, less stoves
Selected attempts to introduce pellets into the large buildings segment were rather successful locally
Barrier: construction companies do not know qualified planners that realise pellet system
ENERGIEVERWERTUNGSAGENTURSummary I
The introduction of pellets into the heat market requires a comprehensive and complex approach
problems that are not managed promptly can seriously affect the diffusion process
It needs a dedicated actor (institution) that co-ordinates and manages pellet introduction - “system building” is necessary
ENERGIEVERWERTUNGSAGENTURSummary II
One company alone cannot finance system building as all others will take advantage of this
in Austria two organisations have been created for this purpose: Bioenergy Austria and Austrian Pellet Association
public co-financing is very important for such initiatives
investment subsidies for pellet boilers is necessary to overcome high transaction costs and perceived risks of new technology
ENERGIEVERWERTUNGSAGENTURContacts
Austrian Energy Agency, Christian Rakos [email protected]
www.eva.wsr.ac.at
Bioenergy Austria (Industrial association of bioenergy companies): www.bioenergy.at
Pelletverband Austria: Mr Auerbach [email protected]