Why are wood pellets so commercially viable?
What is the reason for such an interest in this sort of fuel? Apart from the arguments listed above, the wood pellets do have the advantage in that the pellets being derived from wood comprise essentially harmless feedstock. Moreover, they introduce high energy concentrated in low occupied volume.
In modern furnaces and boilers, the ash deposit is extracted not more than once in two years, this ash could be used as fertilizer. Pellets do not need much storage area since their bulk density is reasonably high. It takes about 7.5 m3 of bulk pellets per year to heat a house 150 m3 in area. Please add to this reduced fire and explosion risk, less likely transportation leakage, etc... So there we arrive at commercial viability of fuel wood pellets compared to other fuels.
Currently, the major consumers of fuel pellets are European countries and Japan.
In Sweden, for example, there are about three dozen plants in operation, to produce about one million tons of pellets per year, and another million tons of product is purchased by Swedes in Canada. It was 2004 which became make-or-break year: that year, Sweden had spent more money on pellet heating then on heating with petroleum products.
Since 2002-2003, pellet production plants construction have become increasingly dynamic in Russia. Slowly but steadily, small and medium-size heat and electricity producers (both city- and industry-oriented), industrial and trading companies and businesses (e.g. warehouse-keepers), and home owners – all become major pellet consumers in Russia.
In particular, distribution market area grows rapidly around major cities like Moscow, St. Petersburg, Nizhny Novgorod, and Yekaterinburg.
The market of shaped bulk fuel (pellets and briquettes) grows like a snowball: wood pellet consumption gets persistently larger in Europe, and – according to marketing experts – a burst in demand for this type of product is about to occur in the nearest future. It is mainly due to Kyoto Protocol, the experts say.
Today, market needs for pellets completely divergent in their quality: both the dark ones containing relatively more bark and the light ones, with the bark content not exceeding 5%. In Denmark, a number of co-generation plants use pellets made of pure bark.
Prices for pellets are relatively stable in western countries for over a decade, to be confined within 120 to 220 euros per ton (however, in some countries the price refers to thermal energy equivalent, instead of ton). Interestingly, the prices for pellets have survived the price surge for crude oil and petroleum products happened last year – that is why pelletized fuel remains so attractive for consumers.