The PromoBio project – Promotion of Regional Bioenergy Initiatives, co-funded by the Intelligent Energy for Europe Program, aims at providing concrete support to local companies and public bodies in establishing new business projects and support the development of regional policy framework related to bioenergy. A strong emphasis is on facilitating new heating plant investments based on fuel wood. Austria and Finland have already established many well-functioning decentralized wood heat systems over the years and therefore their experiences are shared and business knowledge transferred to other EU countries.
Finnish municipalities have a long tradition in investing in wood fuel plants. After the World War 2 district heating was favored in order to increase energy efficiency in energy generation. The exploitation of renewable energy sources was boosted in the 1990’s by efforts to mitigate climate change. Other factors favoring the increasing use of renewable energy sources in Finland include the need to guarantee the energy supply from local sources where possible, and the desire to increase employment opportunities in rural areas and find new uses for set-aside farmland.
In the beginning of the 1990´s some municipalities started to invest in biomass heating systems for municipal buildings like schools, retirement homes, health care centers and so on (output < 1 MWth). A new form of business was born in the Finnish countryside during the 1990’s, when farmers started to produce heat from wood fuels, first supplying heat for schools and old people’s homes and later expanding into municipal district heating and the provision of heat for industrial processes. This ‘heat entrepreneurship’, often by cooperatives, has boosted rural employment while also reducing carbon dioxide emissions.
This kind of heating concept has developed and grown into modern business where heat is often supplied by small private enterprises and consumed not only by public clients but also by private customers like small industries, workshops and greenhouses. Although cooperatives still continue to be a successful business model, most new heating plant investments are made by entrepreneurs or SMEs.
What are the local benefits of wood heating?
Municipalities have been a key player in establishment of heating enterprises that have taken the responsibility in heating public buildings, such as hospitals, schools, offices and libraries, private houses and industrial estates. While wood heating business has been proved in practice, heating enterprises have gained many private customers as well. Also the size of plants has been increasing.
For a regional community there are several benefits to buy heat from such an enterprise or entrepreneur. Public governing bodies are not experts in producing energy and therefore they have to hire experts to take care of boilers in their public buildings or to buy energy from a professional provider. Unfortunately many public and industrial buildings are still heated with oil-fired boilers, which is neither cheap nor environmentally friendly.
Naturally replacing boilers using fossil fuels with bioenergy systems serves common EU targets to increase the use of renewable energy sources and decrease CO2 emissions. Many European countries are far from self-sufficient in energy because most fossil fuels are imported. This dependency can be decreased by using local renewable energy resources of which wood offers the largest potential.
When both the supply of wood fuels and heat generation are in the hands of local entrepreneurs or enterprises, several benefits can be pointed out. All operations can easily be monitored and therefore the most sustainable supply chains can be chosen. For local economies it is important that almost all capital investments stay within the region. Supply of local raw materials for energy increases use of local labor and new business opportunities. Naturally the money previously spent on imported fuels now stays in the region. The recent development has shown that the prices of wood fuels have been rather stable and they have not fluctuated or risen as fast as those of fossil fuels. In the long run this saves money spent on heating and gives more predictability with regard to future energy prices.Furthermore, the fact that money previously spent on fossil fuels now stays in the community, thus promoting local livelihood and increasing taxable income are considered important at a municipal level.
For a local woodland owner there are also several benefits. In general, wood fuel harvesting can help manage private forests better if operations are done regularly. Previously unmerchantable wood can be used effectively for energy production. This includes low grade timber, logging residues and wood species that are not desired by wood processing industry. It also gives more job opportunities and increased income from wood sales. Often under-utilized timber harvesting equipment can be use more effectively if also harnessed for wood fuel harvesting. If a woodland owner gets involved in a heating business for example by becoming a heat entrepreneur, he can remarkably add value to his own wood resources.
An example from Finland
Eno is a small remote municipality in eastern Finland with about 7,000 inhabitants. Already in 1997 the municipal council of Eno included wood fuels in its natural resource strategy and thus became one of the most pioneers of modern wood heating. That decision has since been put into practice and it has led to establishment of three heating plants firing wood chips as the main fuel. All plants are operated by Eno energy co-operative which consists of local farmers, woodland owners and forestry entrepreneurs. With this very successful implementation of a bioenergy strategy the region of North Karelia in general and the municipality of Eno in particular has become a show case for the whole Europe.
Installing district wood heat systems has brought clear benefits to customers, producers and the whole municipality. Heat produced with wood chips is remarkably cheaper compared to oil (oil 105€/MWh, wood 75 €/MWh). This means about 500,000 € are annually saved by the local economy. Eno’s wood fired boilers replace 1.8 million liters of light heating oil and reduce carbon dioxide emissions by 5 million kg every year. The switching of oil to local energy sources has created jobs for over 20 people, totally 7-10 man years. As mentioned before, local energy sources bring safety and independence in times of possible price fluctuations and energy crises.
Written by Jyrki Raitila, VTT Finland
