Economics of Woodfuel Heating
The capital costs of wood-fuelled systems are higher then that for oil or gas, but the outlay is rapidly recovered through lower fuel costs. The pay back time for the extra capital can be as little as 3-5 years even in the absence of grants. The key economic driver is the oil / gas price.
Capital costs
Biomass heat systems require large storage space and specialised delivery systems. In many cases a new boiler house is needed. The capital cost is to some extent dependent on the type of fuel used with pellet systems requiring less storage for example. Also the fuel specification will impact on boiler choice and cost.
According to our experience the capital costs are currently two to five times the price of equivalent fossil fuel systems. Woodchip heating systems cost between £180-300 per output kW, although this can be as low as £60 per kW for industrial users. Larger systems (>500kW) also tend to be cheaper (£150-230 per kW).
It is generally true that some more time and money spent on getting the system right at the beginning can make for lower running costs in the future. This is particularly true with your fuel storage.
Fuel Costs
The price of woodchip varies from 1.0 –2.5 p per kWh. Typically it costs £55 per tonne for high quality woodchips from forestry (at 30% moisture content), which is the equivalent fuel price of 1.6p/kWh. Wood pellets cost around £150 delivered which has the fuel price of 3.1p/kWh.
The fuel standard and cost will be determined by the moisture content, the source of the wood and the distance it has to travel. Also your fuel storage may have an impact on cost. If it is difficult to supply (small store or requires lot of effort to fill) this will impact on the operational cost of the plant.
Access to Grants
In recognition of the potential of woodfuel to reduce carbon emissions, there are a number of schemes that will give grant support to help cover the capital outlay.
Summary Costs
(note no grants have been included)
|
Fuel
|
Fuel Price
|
Fuel Price
p/kWh
|
Capital Cost
(per kW)
|
Whole Life Cost
(p/kW)
|
|
Forestry Chip (@30% m.c.)
|
£55/tonne
|
1.6
|
£110-400
|
1.9
|
|
Sawmill Product
(@55% m.c.)
|
£30/tonne
|
1.6
|
£110-400
|
1.9
|
|
Wood Pellets
|
£150/tonne
|
3.1
|
£280-600
|
4.5
|
|
Heating oil
|
38p/l
|
4.0
|
£60-115
|
5.4
|
|
Natural Gas
|
-
|
2.2
|
£40
|
2.3
|
|
Coal
|
£80/tonne
|
1.1
|
£200-300
|
1.9
|
|
Electricity
|
-
|
8.2
|
£80
|
8.2
|
Capital costs are derived from SDC(2005), Rippengal (2005) and experience in Scotland. Capital cost is calculated assuming delivery over a 25-year lifespan of 41000kWh per kW boiler capacity. Fuel costs are calculated based on local experience. No cost for maintenance, financing or breakdown is included, nor are the effects of climate change levy or potential grants to cover biomass systems.