Fuel Price Comparisons
Wood fuel is a competitive source of heat compared to most fossil fuels such as oil, and even natural gas when looking in the long to medium term. It has the potential to offer end-users affordable energy that to some extent can be insulated from increases in fossil fuel prices. It also has perhaps the lowest cost of all renewable energy technologies.
Although biomass installations often have a higher purchase price than fossil fuelled alternatives, the payback period for a wood fuel installation is often shorter as running costs are lower compared with fossil fuelled alternatives. The introduction of the Renewable Heat Incentive at the end of November 2011 reduces this payback period even further. The RHI is a payment for generating heat from renewable sources administered by the official regulator Ofgem and paid for directly by the Treasury.
The exact payments will be adjusted annually in line with the Retail Price Index but basically smaller (<200kW) biomass installations will be eligible for tariffs up to 8.3p/ kWh falling to 1p for systems above 1000kW. For more information visit the Ofgem website here.
The table below gives a guide to the typical cost per unit of fuel energy for comparison. This is not the same as cost per unit of delivered heat which will depend on the efficiency of the boiler or stove, and may also include other charges such as service and maintenance for heat supply contracts. All prices are prone to significant variation with geographical region, order quantities, contract value and duration, time of year, delivery distance etc. The wood fuel costs are averages based on current English Wood Fuels rates.
Moisture content is a critical parameter for wood fuel. Most wood fuel boilers are designed to operate with fuel of moisture content of a limited range. Attempting to use fuel that is outside this range will result in the boiler either operating inefficiently, with increased emissions, or trip out the control system and fail to function at all. The right fuel is vital to the correct operation of boilers and stoves. Moisture has a significant impact on the calorific value of fuel as well as its cost.
The costs below are shown as “input” prices – i.e. the cost of the fuel before the inefficiency of the boiler. They are presented like this to enable a like-for-like comparison, because that is the way that oil and gas prices are presented. Wood fuel boilers are typically 85-90% efficient, and so the cost of heat “on the meter” (after the inefficiencies of the boiler) will be the cost shown below divided by efficiency of the boiler. We have shown this below assuming 85% efficiency.
Prices updated March 2016: it is generally accepted that current fossil fuel prices are very low, and will rise in the short to medium term.
The price will depend hugely on the delivery size and the type of lorry which can access the site, and the part of the country.
These prices do not take into account the RHI subsidy which is paid for generation of biomass heat. The RHI makes the net cost of biomass fuel very substantially lower than shown in the table.
|Commodity (% Moisture Content)
||pence/ltr||£/tonne||Net Calorific Value||Pence/kWh (input)||pence/kWh ("on the meter")|
|Wood Pellet Bagged||250||4800||5.21||6.13|
|Wood Pellet - small blown delivery||220||4800||4.6||5.4|
|Wood pellet - full load blown delivery||200||4800||4.16||4.89|
|Main Gas (Domestic)||3.50||4.12|
|Wood Chip (20%)||150||4100||3.66||4.30|
|Wood Chip (30%)||120
|Wood Chip (40%)||90
|Wood Chip (50%)||70