Analysis of the wood pellets market potential in the future

2016.09.06

Wood pellets have enormous market potential as a biomass fuel although their current share of the heat energy market in general and the biomass fuel market is very small at present. The potential exists because of the availability of the raw material, the comparatively high energy density, the possibility of their use in automatic firing systems with a high level of user convenience and, not least - provided that certain energy policy conditions are fulfilled.
Their competitive price. For small systems in particular wood pellets opens up a new dimension in practical biomass heating, which, under certain circumstances, could represent a genuine alternative in this area to oil or electric heating.
The main technical challenge is the obtaining of high fuel quality (low dust component and no impurities or dangerous additives), efficient, highly reliable and user-friendly heating systems, gentle transport and storage techniques, the development and standardization of charging systems, and rapidly available and professional service. Communications problems and competition between the different players make co-ordination difficult. In many cases the absence of an infrastructure (no chimneys, no water-based central heating systems) is a barrier to the installation of pellet heating. A poorly functioning or non-existent supply system (market) for fuel, heating systems and services could also discourage consumers from changing over to this heating system. Traditional heating customs and social influences are further possible hindrances. The main factor, however, is the economic one, where both fuel costs - now competitive in many European countries with non-renewable heating fuels.
And the much higher investment costs are telling issues. By and large, however, nontechnical obstacles are likely to have a stronger impact on market development than technical barriers.
Strategies for further market penetration: Political support and direction remain indispensable if the carbon dioxide reduction targets formulated at a political level are to be achieved. Biomass (pellets) and the low-energy market can play an important role in this respect, which should be encouraged.