Owners of biomass boilers have been in for a bit of a shock recently as a ‘perfect storm’ of events has created a sharp – albeit temporary – spike in the price of bagged wood pellets. In some cases prices have risen by 20% with some suppliers struggling to meet demand.
Homeowners buying wood pellets for domestic biomass boilers tend to buy bagged pellets, around half of which are imported from Europe with the remainder produced in the UK. There have been problems at the two of the main production and bagging plants in the UK and this, coupled with increased demand for wood pellets in Europe (with a number of biomass-fuelled power stations coming online) has been constrictive on supply with an inevitable impact on prices.
Typical prices last year were £210/tonne; now some suppliers with stock are charging £250-260/tonne. Recent cold weather has increased demand.
Stuart Fitzgerald from White Horse Energy, a leading wood pellet supplier, has written an excellent blog on the current situation. “Fundamentally, what we’re looking at is a European wide shortage of wood fibre (the raw materials pellets are made from) that has severely restricted supply and massively increased the cost of pellets at point of manufacture. For the short term we expect availability to remain patchy throughout December with supply normalising to some extent in January.”
Charlie Lamb from Windhager, one of the UK’s leading biomass boiler suppliers, confirms the good news that the pressure on supply is temporary and, as a result, prices should ease into the new year. “Production is already beginning to get back on track in the UK plants and we will see supply improve in the coming few weeks and certainly in January. It’s a temporary blip and nothing else, but it has been a perfect storm just at the time in early December when temperatures are dropping. Whichever way you look at it, it’s a good lesson: if you can find the space for extra storage for pellets out of season, then keep your stocks maintained so you’re not having to rely on last-minute buying.”
A good lesson for those Christmas shoppers amongst us.