Forest bioenergy harvesting business

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1 Forest bioenergy harvesting business Forestry Contractor OSCAR Seminar 8-9 th June 2015 Hämeenlinna, Finland Arto Rummukainen Natural Resources Institute Finland

2 Climate change Use of fossile fuels Import dependency Thanks! Efficient forest fuel system Idea Antti Asikainen Painting Akseli Galle-Kallela 2 Rummukainen Forest bioenergy harvesting

3 Why bioenergy? Bioenergy is usually based on renewable resources Climate effects better than fossil fuels (some doubts) Domestic resource: local work, spare on foreign exchange Good base for circular economy: bioeconomy Potential labour input in forest bioenergy harvesting by Asikainen 2012, Metla 3 Rummukainen Forest bioenergy harvesting

4 Finnish energy structure 4 Rummukainen Forest bioenergy harvesting

5 Forest utilisation for bioeconomy grows 5 Rummukainen Forest bioenergy harvesting

6 What is the job in bioenergy? 6 Rummukainen Forest bioenergy harvesting

7 There are many enterprising possibilities 7 Rummukainen Forest bioenergy harvesting

8 Methods to produce forest chips 2014 By Markus Strandström 2014 Metsäteho Oy Material: 73 % of utilisation of forest chips in heat/power plants, total 11,6 TWh Raw material 4,7 TWh Small size whole trees or stems 41 % 4,0 TWh Cutting residuals 34 % 2,0 TWh Stumps 17 % 0,9 TWh Rotten pulp wood or logs 8 % Chipping / crushing methods - Road side chipping 57 % - Terminal chipping 27 % Increasing - Chipping at heat/power plant 16 % 8 Rummukainen Forest bioenergy harvesting

9 9 Rummukainen Forest bioenergy harvesting Who are the customers? Forest industry connected to 400 plants utilising forest energy Energy companies to 300 Other smaller ones to 100 Suppliers have Forest industry as customer but also new customers, usually smaller

10 Learning period for both customer and supplier Forest industry companies wood procurement units learned, that energy wood business is an art itself Long time span, strong seasonality Special scaling and quality, easily quality losses Special machines, new enterprises Good working solutions Supplier devoted to energy wood harvesting Challenges Quality in harvesting and storage, material losses First thinnings not profitable One machine broken, the whole chain broken State subsidies fluctuate too often and much Photo Arto Rummukainen 10 Rummukainen Forest bioenergy harvesting

11 Who are the energy enterprises? Suppliers of forest industry companies, % Side work for round wood harvesting & transport Specialised to some of energy wood tasks: harvesting, chipping & transport Enterprises working directly for power plants Enterprises working for others supplying power plants Enterprises & associations buying wood for power plants Work requires different machinery, time tables, operating areas etc. compared to round wood harvesting Photo Arto Rummukainen 11 Rummukainen Forest bioenergy harvesting

12 Part time enterprising possible Heating period on winter, free time in agriculture Reasonable investments possible Forest owner can sell work and wood Crushing stumps and recycle wood Photos Arto Rummukainen Customers requirements Small energy plants Dry, good quality chips Fluidisized bed grate power plants Large variety of fuels and qualities 12 Rummukainen Forest bioenergy harvesting

13 Front-loaded costs in long process 1. Autumn 15% 1. Winter 50% 2. Spring 5% 2. Winter 30% Photos Arto Rummukainen 13 Rummukainen Forest bioenergy harvesting

14 Way to future Increasing knowledge of bioenergy benefits Bioenergy to schools LONG TERM decisions to promote bioenergy Forest industry is growing Forest owners sell wood Transferring forest estates to next generation easy Photo Arto Rummukainen 14 Rummukainen Forest bioenergy harvesting

15 Infrastructure Roads need to be upgraded for ton trucks Bioenergy terminals needed -permission, owner etc. Improve the thermal value of forest fuels Circulating economy Road net 1940 and Rummukainen Forest bioenergy harvesting

16 Forest operations are the hot spot Common quality based chip pricing system Minimising problems of seasonality Building networks between enterprises Education of operators and enterprise owners Change of generation easy Promoting method and machine export Photo Arto Rummukainen 16 Rummukainen Forest bioenergy harvesting

17 Natural Resources Institute Finland & VVT Technical Research Centre of Finland work together for promoting bioenergy 17 Rummukainen Forest bioenergy harvesting

18 Kesla Hybrid chipper 250 kw Diesel engine with thyristor and electric engine Spare 30 % diesel fuel 18 Rummukainen Forest bioenergy harvesting

19 Thank you! Arto Rummukainen