bioenergy from forest mr.ilpo mattila, head of section
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Bioenergy from forest Mr.Ilpo Mattila, Head of Section Central Union of Agricultural Producers and Forest Owners (MTK) Eurofonet Conference 20.11.2007 Brussels. 164 000 MEMBERS. RURAL ENTREPRENEURS. FOREST OWNERS. FARMERS. FOREST MANAGEMENT ASSOCIATIONS (FMA) (150). - PowerPoint PPT PresentationTRANSCRIPT
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Bioenergy from forestMr.Ilpo Mattila, Head of Section
Central Union of Agricultural Producers and Forest Owners (MTK)
Eurofonet Conference 20.11.2007
Brussels
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THE ORGANISATION OF MTK, 2007
RURAL ENTREPRENEURSRURAL ENTREPRENEURS
FOREST MANAGEMENTASSOCIATIONS (FMA)
(150)
FOREST MANAGEMENTASSOCIATIONS (FMA)
(150)LOCAL FARMERS ASSOCIATIONS
397
LOCAL FARMERS ASSOCIATIONS397
REGIONAL FOREST OWNERS’UNIONS (10)
REGIONAL FOREST OWNERS’UNIONS (10)
REGIONAL FARMERS UNIONS(16)
REGIONAL FARMERS UNIONS(16)
THE OFFICE OF THE CENTRAL UNION OF AGRICULTURALPRODUCERS AND FOREST OWNERS
Maaseudun Tulevaisuus (Newspaper)
THE OFFICE OF THE CENTRAL UNION OF AGRICULTURALPRODUCERS AND FOREST OWNERS
Maaseudun Tulevaisuus (Newspaper)
164 000 MEMBERS
FORESTOWNERSFARMERS
FUR BREEDERS´ASSOCIATION
FUR BREEDERS´ASSOCIATION
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Coal13.3%
Peat6.4%
Nuclear16.7%
Net import of electricity 3.1%
Hydro power2.7%
Wood fuels 21 %
Oil25.9%Natural gas
10.9%
Heat pumps REF and other
1.0 %
Primary energy sources in Finland, 2005
Wind power 0.02%
Total energy consumption 1,402 PJ ~ 390 TWh ~ 37 Mtoe/a
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Who owns Finnish forests?
Share of Forest Area, %
Source: Finnish Forest Research Institute
Other private2.4%
Pensioners19.8%
Wage & salary earners15.5%
Farmers20.4%
Entrepreneurs3.7%
Forest Industry8.9%
State24.4%
Others4.9%
Private Families 62%*
* 2007-Private families 60%State 26%
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Use of wood fuels and peat in different sectors in Finland in 2004
80% of wood energy is used in forest industry, use in other sectors is growing fast
TW
h
0
10
20
30
40
50
Other industry, condensing powerResidental heatingDistrict heatingForest industry
Blackliquor
Forestchips
Wood residues
from industry
Small scale use of wood
Peat
Most bioenergy (=wood fuels) is used in large scale CHP production
within the emission trade sector without significant subsidies
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0
5
10
15
20
25
30
35
40
loggingresidues
stumps smalldiameter
trees
€/m
3
stumpage price/savingof cost
management
road transport
chipping
forwarding
lifting of stumps
felling & bunching oftrees
Production costs of forest chips
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Average price paid at the plant in Finland
0
2
4
6
8
10
12
14
16
forest chips industry chips sawdust bark
€/M
Wh
2000
2001
2002
2003
2004
2005
2006
2007e
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Heat entrepreneurship – what is it?
Rural small and medium-sized entrepreneurship, in which the entrepreneur is paid according produced heat fuelled by biomass fuels
Forest owners refine the wood fuels into heat and do not sell only raw material MTK has actively developed the operation model as an organisation for forest
owners Currently about 170 heat entrepreneurs managing some 340 plants Total output is about 170 MWth
– Heat produced 400,000 MWh/a
– Use of wood fuels 600,000 m³ loose/a Average boiler output 500 kWth
Largest heating plant is 3.6 MWth
1 solid m3 is about 2.5 loose m3 and about 2 MWh
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Fuels, operation and costs
Solid biofuel as the main fuel, light fuel oil as reserve and for peak load
Forest chips are the most significant energy wood. Full-time entrepreneurs will be main trend in the future – today most of them are
part-timer entrepreneurs Pellet heat entrepreneurship is up and coming Cost structure guarantees stable price of heat
– Capital costs ⅓
– Fuels ⅓ and the average fuel price is 16 €/MWh
– Repairs, maintenance, administration, electricity, saleries ⅓ Earlier initial investment was done by the local authority, currently the
entrepreneur is the most common investor First customers were local municipal real estates and regional heating
companies, currently the share of private enterprises is growing most rapidly
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Small-scale heat entrepreneurshipUSUAL W OOD HEATING
W ood harvestingW ood harvesting
Chipping
Chipping
Operation and m anagement of the p lant Operation and
m anagement of the p lant
Investments InvestmentsReparation Reparation
TransportTransport
Heat d istribution
Heat d istribution
HEATING ENTERPRENEURSHIP
Source: VTT/EUBIONET 2 (www.eubionet.net)
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Number of heat entrepreneurs
0
50
100
150
200
250
300
350
400
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Heating plants
MW
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Heat entrepreneurship in the changing operating environment
Change in the price relations
– Light fuel oil is no longer the biggest competitor as the price has increased 2.5-fold in five years
– The price of heavy fuel oil is sufficient enough to make wood heat more competence in the business
Competition with other heat entrepreneurs and energy utilities has increased
Effort is to increase plant sizes Strengths:
– Flexible way of operation
– Smaller expected return on investment on capital than with energy utilities
– 340 references available in Finland
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Kyyjärvi energy co-operative
Established in 1998 40 members, which are forest owners Managing a 2.5 MW (1 MW + 1.5 MW ) wood chips
plant Heat production about 6,500 MWh/a Plant and network owned by the local authority ”The co-operative owns only the sample devise Wood chips are purchased delivered into the silo at
a MWh price The wood chips cost €16.15/MWh (+ adjustment
payment for the shareholders) Local authority pays €22.95/MWh for the heat,
contract valid indefinitely, price can be negotiated if necessary
Local authority sells district heat at a price of about €43/MWh
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Considerations of the future of heat entrepreneurship
Co-operative thinking will move aside, entrepreneurship will increase Entrepreneurs are also willing to build district heating networks Local authorities will outsource heat production A target of 1,000 heat enterprises in 2010 MTK to be a shareholder in the Biowin (www.biowin.fi) heat enterprise, which
develops a franchising model for heat entrepreneurship Forest owners and rural residents will own the heat companies In addition to local authorities, the heating of the real estates of small and
medium-sized enterprises will be part of the business operations to an increasing extent
Possible introduction of the feed-in tariff will increase competitiveness
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Competition for fuel chips
The procurement of energy wood promotes forestry; a great need for early thinning of forests
Forest industry fears that pulpwood will be used as energy wood
If the forest industry does not need pulpwood, forest owners will sell it as energy in the future
Emissions trading and the EU targets for renewable energy will increase the competitiveness of energy use
The target is to utilise wood as raw material in the forest industry first
Second-generation biofuels are a challenging target for the use of wood
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Thank you for your attention
More information Ilpo Mattila, email:[email protected]