1. Proposal : Research the viability of pellet heating in Australia Graham Palmer MIET2127 October 2006

2. Introduction What is pellet heating? Pellet heaters Characteristics Existing pellet markets Logistics of pellet heating market Heater market in Australia Opportunities What next?

3. What is pellet heating? Small pellets manufactured from wood dust without additives Potential to revolutionise wood heating High efficiency Low emissions Automatic operation More expensive than log burners

4. Pellet heater

5. Pellet space heaters

6. Pellet boiler - Kunzel

7. Characteristics Energy density 18 MJ/kg –3 to 4 times more energy than timber per unit volume Efficiency 80 to > 90% –Open fire 10%, combustion 40-60% Ash content < 5% –Empty tray few times a year Emissions –Biomass emissions have decreased by 3 orders of magnitude in 2 decades

8. Historical emissions improvement - measured biomass heater in Austria Source : Rakos (2002)

9. Existing markets Sweden, Austria, Germany etc - already using wood + mix of other fuels including gas, oil, coal, electric US - high mains gas, electric + some oil UK - high mains gas penetration + some oil Australia - one importer and one manufacturer

10. Results of a subsidy scheme in Salzburg (Rakos, 2001)

11. Pellet production by country 2005 (tonnes) Note: Australian price for pellets $360/tonne Sources: Bioenergy International December 2005 (see note in text); Wood Pellet Association of Canada Sweden1,356,000Two plants producing over 130,000 tonnes per year, 15 producing over 30,000 tonnes Canada1,000,000Five plants over 80,000 tonnes, several plants in the 200,000-tonne range Russia758,000Two 100,000-tonne plants, seven over 30,000 tonnes USA600,000 Denmark535,000One 280,000-tonne plant and two over 80,000 tonnes Finland460,000Six plants over 30,000 tonnes Austria409,000Four plants over 30,000 tonnes, three in 80,000-100,000 tonne range Germany388,000Six plants over 30,000 tonnes Poland356,000One 100,000 tonne plant and three over 30,000 tonnes Estonia345,000Three plants over 80,000 tonnes

12. Key logistical issues Pellet manufacture –Quality –Reliability of supply –Sufficient competition Pellet distribution and logistics –Bulk –Bagged Pellet burners and boilers

13. Economics of pellet heating Economics of existing heating –Gas - ducted, wall, hydronic –Electric element –Electric reverse cycle - ducted, wall, split –Wood - open fire, combustion, pot belly –Oil –Floor slab –Solar Economics of pellet heating –Heaters –Pellets –Pelletising equipment –Distribution

14. The pellet paradox No-one will buy a heater without access to pellets No-one will maufacture pellets unless there are heaters to make use of them Europe overcame problem because importing was feasible, and fuel costs of competitors are higher

15. Main reason for purchasing heater - Australia Source : ABS (2005)

16. Heating in Australia Source : ABS (2005)

17. Opportunities Victorian timber communities –Cool climate, access to raw material, log burning already, no mains gas Launceston –Cool climate, access to raw material, problem with particulate pollution from log fires

18. Cost of pellets in Melbourne (updated since original presentation) 2006 $360/tonne 2008 $475/tonne 2009 $600/tonne little competition and captive market Assuming 18 MJ/kg, $600/tonne equates to 3.3 cents/MJ – compare gas at 1 cent/MJ and electricity 5.6 cents/MJ (20 cents/kWh)

19. Economic Support local industry Competitive except with mains gas Develop regional industry Social Maintain energy autonomy within a regional district Consumers may prefer pellet heating Greenhouse challenge front runner Environment Net greenhouse benefit Less particulate pollution Increased resources for forest management High efficiency Close the carbon loop TBL Analysis

20. Users Consumers Retailers Installers Creators Appliance manufacturers Pellet manufacturers Manufacturer associations Supporters Australian Greenhouse Office Sustainability Victoria RMIT Investors Interested parties

21. What next? Complete a credible report on performance, environmental impacts, economics and market opportunities of pellet heating Bring together interested parties Lobby for support Greenhouse a big issue Part of the biomass debate (enthanol, biodiesel, biogas) May be cost effective outside of mains gas Local pollution in urban areas