The Woodfuel Supply Chain

Transcription

1 The Woodfuel Supply Chain Neil Harrison SAC Environment & Design Senior Consultant

2 Overview Where are we starting from? Woodfuel Market Segments What do customers want from us? What are the critical steps to satisfied customers? Solving structural issues cooperatively

3 Where Are We Starting From? Scotland s woodfuel industry is c. 10 years old; FC estimated 203 woodfuel projects operational in 09, consuming macro scale (>10k/tpa) 620k large scale (1 10k/tpa) 26k small scale (<1k/tpa) c. 24k ODT; All Figures : Woodfuel Demand and Usage in Scotland Update 2010

4 Where Are We Starting From? Energy Use in EU27 Source : DECC Energy Trends, December 2010

5 Where Are We Starting From? Source : DECC Energy Trends, December 2010

6 Where Are We Starting From? Source : DECC Energy Trends, December 2010

7 Where Are We Starting From? 63.1% 1.4% Source : DECC Energy Trends, December 2010

8 Where Are We Starting From?

9 Assumption Everyone here would like to get the highest possible price for their timber Focus from here on will be <10k/tpa market segment.

10 Woodfuel Market Segments Woodfuel encompasses a range of products & markets : Well established use 150k log burners installed in UK in 2010 Well developed supply chain (although quality very patchy) Supply chain tends to operate at local level Very low level of uptake in terms of # s of systems (<200) Supply chain immature, with very patchy coverage Quality is variable and has impacted significantly on uptake Low number of systems and significant production overcapacity Supply chain nationwide Quality is variable (usually related to delivery not production)

11 Woodfuel Market Segments Focus of market growth, and the most lucrative opportunity for estates and farm forestry, will be wood chip systems, with smaller customers (<1,000 tpa) paying the most for fuel; Installed capacity in Scotland at 2009 was 187 individual systems in industrial and commercial sector with a mean size of just under 190kW, using av. 128odt/yr (some will be pellets).

12 Woodfuel Market Segments Boiler Size (kw) 30%MC 50kW 20t 100kW 40t 150kW 60t 200kW 120t 300kW 200t 500kW 250t 750kW 400t 1000kW 600t 2000kW 1,000t + Typical Installations Large Farmhouse Small Country House Primary School Micro DHS Large Country House Medium Sized Hotel Leisure Centre College Hospital

13 What Do Customers Want From Us? What Do Customers Want From Us? Clean Hassle Free Cost Effective Environmentally Sustainable RHI Income Generating!

14 Critical Steps to Satisfied Customers General rule that the bigger the boiler, the less consistency required of the fuel. Key variables to control are : 1 Moisture Content 2 Particle Size 3 Contaminants/Ash 4 Delivery Issues The impact of which are boiler dependent.

15 1. Moisture Content There is only one way to get it right, and lots of ways to get it wrong! Poor/no firing Too wet = Excessive use of ignition system & fuel Excessive smoking Incomplete combustion & build up in heat exchanger, etc Mouldy fuel (farmer s lung) Excessive ash Poor performance in blowers & freezing in some fuel stores Increased delivery frequency & therefore higher cost

16 1. Moisture Content Drying In the Forest / Yard Open windy site very important, laying the stack so that the ends of the logs are facing into the prevailing wind; Away from drip line; Raised off ground on bearers; Cover the stack with tarpaulins or biodegradable cover.

17 1. Moisture Content SOURCE Hardwood Softwood Roundwood 2 3 years 1 2 years Post processing Forced drying heated 6 months 1.5 years 6 months 1 year hours hours Forced drying passive 3 6 weeks (summer) estimated 2 4 weeks (summer) Boiler design can be a big help (or hindrance).

18 Underfed Hearth

19 Stoker Burner

20 Moving/Reciprocating/Step Grate

21 Moving/Reciprocating/Step Grate

22 2. Particle Size Poor size control = Unable to blow deliveries Auger jams & bridging Rotary valve jams (where present) Fuel recovery system jams Chip can either be produced to be in specification, or chipped and subsequently screened the latter approach adds costs.

23 2. Particle Size Crap in = crap out! High quality chips come from de limbed wood, or slab wood; Poorer quality chips come from whole trees, forest residues, branches, twigs, leafy material etc. Chippers work best with long lengths of consistent diameter wood. This results in high productivity with high chip quality; Feed into chipper butt first. Again, system design can be a big help (or hindrance).

24 2. Particle Size Farmi Disc Chipper

25 2. Particle Size Kesla Drum Chipper

26 2. Particle Size Critical Points Recovery System Rotary Valves Auger

27 2. Particle Size Critical Points Recovery Systems

28 2. Particle Size Critical Points Augers

29 3. Contaminants/Ash Contaminants = Possible WID compliance issues Mechanical wear on boiler Auger/fuel recovery jams Refractory damage Emissions problems High ash levels = Elevated particulates High wear on ash auger/extract system Possibility of grate damage

30 3. Contaminants/Ash

31 4. Delivery Issues Poor fuel store/delivery system design can have major impacts on the fuel supplier : Likely to be quoting for fuel delivery off plan, with no idea of how long deliveries will actually take cost implications ; Will be a period of finger pointing if it all goes wrong fuel supplier is the person who is on site most often.; Any jams or other performance problems will be the fuels fault ; There are many health and safety issues associated with fuel delivery and fuel stores

32 4. Delivery Issues

33 4. Delivery Issues

34 4. Delivery Issues

35 4. Delivery Issues!?

36 5. Structural Barriers

37 Dispersed Customers There are very few clusters of installations, and those that do exist are typically at the small scale (i.e. a few dozen or few hundred tonnes). > > 45 miles > > > > Economies of scale are therefore difficult to achieve. 0 miles 50 miles

38 Limited Funds for Investment All businesses are cash constrained. Investment to enter supply chain can be considerable. Chipper ( 5, ,000) Trailer ( 2,000 40,000) Chip Storage ( 10,000+) Moisture Meter (c. 25 1,500) Log splitter ( ,000) Bankrolling months of timber drying (or a 10k+ dryer).

39 Working Cooperatively

40 Opportunities for Cost Saving Cooperative working provides substantial opportunity for cost saving a fact borne out by machinery rings across the country. Cost savings can be realised from shared purchase and ownership of machinery and/or timber. Cost savings can be achieved bringing in forestry (if you have trees) or chipping contractors (if you don t) by reducing positioning costs.

41 Opportunities for Farms & Estates New markets for low grade timber small woodlands & forgotten conifer plantations become viable; Opportunities to heat own home & enterprise from woodland to create an income stream; Opportunities to work cooperatively to access and meet the needs of larger local markets; Opportunities to diversify into energy supply, alongside other forms of renewables, and create a direct longterm relationship with local consumers.

42 Opportunities for All Almost all farming/rural businesses can effectively contribute to and/or benefit from a cooperative : by being a customer; by promoting the group to other customers; by providing storage facilities; by supplying timber; by offering contract services/machinery; by supporting the group with advice and experience.

43 Co ops Attract Funding Working cooperatively gains extra points from SRDP. Is seen as a key way of making public funding go further in a financially constrained world. There are too many chippers sitting idle!

44 Where Might it Take Us?

45 Where Might it Take Us? At Gnas, group members derive the following benefits : income for low value timber (often just branchwood); improved economics for timber harvesting; improved quality of timber crop (income from thinning); guaranteed, long term market for low value timber; income from heat sales to the town. In the UK, the RHI also provides an income from government tariff payments in addition to the benefits above.

46 Creating Confidence Resolves the chicken & egg situation we find ourselves in : No boilers without supply chain + no supply chain without market; Reassurance size of enterprise provides comfort; Easier for customer to source fuel supplies; Easier to ensure quality control of supplies (standards); Can include a central (knowledgeable) contact point; Gives producers the ability to contribute strategically.

47 Principal Contacts Kate Hutchinson Environment & Design Neil Harrison Environment & Design