Friday, March 07, 2008

Wood Pellets Cost More than Oil


For Many Users
Wood Pellets
Cost More
Than Oil

Just today I was in the post office and there was one of those ubiquitous advertising flat screen TVs displaying various adverts. One advert that caught my eye was a bio fuel dealer’s promotion which was making the bold statement that:

Wood Pellets are more efficient than Oil
Wood Pellets cost half the price of Oil

You cannot make any comparison between the two fuels unless you first look at heat output.

1 Kg of Wood pellets gives 4.88 Kilowatts of heat for 1 hour.
1 Litre of Heating Oil gives 10.50 Kilowatts of heat for 1hour.

It takes almost exactly 2.14 tonnes of wood pellets, that is two and the one eight tonnes, to give the same heat output as 1000 litres of heating oil.

The Prices

Wood Pellets 2.14 tonnes = 1000 litres of oil.
Wood Pellets cheapest bulk (3 tonne lots) = €210 per tonne.
Wood Pellets bagged 10Kg bags = €300 per tonne + €54 for delivery.
Heating oil 1000 Litres currently approximately €730.

The Comparison

For the same amount of heat output the following end costs are true:

2.14 tonnes of wood pellets in bags cost = €708 (delivered).
2.14 tonnes of wood pellets in bags cost = €642 (if you collect. What does that cost?)
2.14 tonnes of wood pellets bulk 3 tonne lots = €449.40
1000 litres of heating oil at time of writing = €730

Bagged Wood Pellet Users

Delivered bagged wood pellet users will save €22 per fill over oil or €44 per year on average.
Bagged wood pellet users who collect may save a bit more but not the face value of €88 per oil fill or €176 per year average.

Bulk Wood Pellet Users

If you are one of the lucky few to have a proper bulk storage facilities, which probably cost you at least €2000 to set up, you could be saving €205 against the cost of a fill of oil. Two fills a year being the average use of oil, your yearly saving would be €410. Now if your paid €3000 on top of the grant for your pellet boiler and another €2000 for your storage facility, making a total of €5000, it would take you 12 years to recover your investment.

If you are a bagged wood pellet user saving €88 per fill the total yearly saving for bagged wood pellets would be €176 at most. Say your wood pellet system cost you €3000 on top of the grant, at present prices it would take you 17 years to recover your investment if you are using bagged pellets.

If you are a bagged wood pellet user who is paying a delivery charge you are saving little or nothing over oil costs.

Boiler Efficiency.

Condensing oil boilers will give a figure of 95% to 97% efficiency. For ordinary oil boilers the figure is 85%,

Wood pellet boiler efficiencies vary a great deal. The very best gives around about 92% efficiency, I have yet to see one giving better than that.

Overall Efficiency

If you have a condensing oil boiler is is going to be about 10% more efficient than an average pellet boiler. So the figures given above would need to be accordingly modified giving you less saving on the wood pellets.


Simple straightforward outcome of this exercise: It costs more to heat your home if you use bagged wood pellets than oil users with condensing oil boilers. For sure as oil prices increase, you will see wood pellet price follow, so I doubt you will see any future saving worth talking about.



Blazers said...

Just found your blog and interesting comparison. I am presently considering a wood burning (gasification) boiler due to horrendous oil bills. Have to decide soon as apparently the grants end (here in N Ireland) on 31st March?? At least I have some woodland and could also plant willow for ongoing supplies I hope.

Consider also the extra heat losses associated with a 1500 - 2000 litre hot water accumulator tank and the extra pipeworks, pumps etc


The Patsy Edgers said...

A few points of note when doing a comparison:
1)The moisture content of the pellets varies a lot and if left for any time will reabsorp moisture up to 20%, I think the calorific value as advertised is around 17.5%.
2)The boiler efficiency quoted must be based on the lower calorific value as I doubt if you could get efficiencies over 90% for pellets.
3)The added labour involved in removing ash (>15%)and disposing of same has to be considered, and maintenance costs are higher.
3)Pellets are not a runner at all with natural gas comparison.
Jimmy Nolan EES