Friday, November 10, 2006

Pending Disaster in Wood Pellet Heating

Pending Disaster
Irish Wood Pellet Heating

It looks like the position of wood pellet supply that I have been predicting, on this blog for some time, is about to happen in Ireland this very winter. It seems very likely that the demand for wood pellets will exceed the supply available, with the consequences of price inflation, and/or of delayed or indeed no supply.

The Cart before the Horse

Sustainable Energy Ireland (SEI) has been strongly promoting the sales of wood pellet heaters with their generous grants. However, SEI has failed completely to ensure the supply of fuel, along with its other failures. This is a bog basic planning cock-up by SEI and by the Irish Government, and it is one which was obvious from the very beginning.

The whole Sustainable Energy Ireland affair is a bit like spending millions to establish a boat building facility in the middle of the Sahara. But that said - what’s new in Ireland!!

Balcas Ltd., Enniskillen, currently the only sizable manufacturer of wood pellets on this Island, has stopped taking new orders. They say that the lead-time for new customers is approximately 2 months. Existing customers supply will be maintained. Balcas capacity is 50,000 tons p.a. Their current problem is one of logistics and whereas they are making every effort to address the issue, it will be 2 months, or perhaps more, before the situation eases.

I spoke to Balcas who have clearly said that they would have been able to adapt to the increased demand if they had been informed of the level of increase in the market place. But nobody at SEI or the Department of Energy had the wits or courtesy to consult the only supplier with significant capacity!!!

Another Irish case of a terminal lack of “joined up thinking”.

The Hope that was on the Horizon

I mentioned several months ago that there was a new large capacity pellet manufacturing facility being built in Ireland.

The July blog said:

“Good News about Wood Pellets

No sooner had I the last Blog published, than I received an e-mail from Briain Smyth of Irish Pellets Co. Meath which lead to an interesting conversation about a new 100% Ecological Wood Pellet Production Facility.

Briain tells me that his new factory is expected to be in production in December. I was very happy to hear that it will be using 100% Irish sourced wood to produce top quality 6mm pellets with a guaranteed 8% moisture.

The initial capacity of the factory will be 30,000 tonnes per year but this will be increased in time. By my calculations that would be enough to supply about 6,000 to 8,000 average domestic users per year on initial production capacity. Now that is good news!

Prices have not yet been focussed but Briain assures me that they will be very competitive. Irish Pellets has a web site but there is not a great deal of information up on it just yet.”

However, the position, I now gather from talking with Briain Smyth, is that the plant will not be up and running ‘till the new year.

Worse to Follow

And there is much worse to follow: Briain has also told me that the hoped for government aid for the project has not been forthcoming, and that if the grants and aid are not assured in the next couple of weeks, he will be forced to make sales contracts abroad for the entire output of the factory in order to stay afloat.

Simply stated, this means that without the Irish Pellets Ltd. capacity being added to the Irish market over the next couple of years, we will be highly dependent on imported pellets. There are already major world shortages of wood pellets.

So What is the Current Situation?

As I personally see it just now, grant or no grant, it is not a good time to install wood pellet heating systems. It could end up this winter that oil is cheaper than wood pellets and more available.

What a colossal cock-up by SEI and the Government!!!


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