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Wood-Chip Heating Systems - Biomass Energy Resource Center

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in a system designed to burn hardwood. Some<br />

manufacturers’ systems can burn either of the two fuels<br />

interchangeably.<br />

Sources, Availability, and Price of<br />

<strong>Biomass</strong> Fuel<br />

In most parts of the Northeast, institutional and<br />

commercial biomass energy systems represent a small<br />

market. These facilities typically buy from sawmills<br />

and whole-tree chippers that serve other, much larger<br />

markets such as paper mills or wood-fi red electric<br />

generating plants. Sometimes the small biomass<br />

energy user will buy from local truckers who specialize<br />

in hauling wood chips or other biomass.<br />

If a region has a large-enough market of institutional<br />

or commercial users of fuel biomass, it may also<br />

have mills or chippers that cater to this market. These<br />

suppliers will have delivery vehicles specifi cally suited<br />

to serving small institutional systems — and they will<br />

be more responsive to the special needs of institutional<br />

and commercial users that are not part of the forest<br />

products industry. Suppliers in a healthy, competitive<br />

chip market may be willing to invest in the equipment<br />

and time needed to screen their chips to give a more<br />

consistent product.<br />

Because the two markets are quite different,<br />

small biomass users rarely buy through the brokers<br />

who procure biomass fuel for large power-plant and<br />

industrial users on a contract basis. Institutional users<br />

often have higher standards for fuel quality, and require<br />

more load-by-load administrative work, than large<br />

users who might need one or more truckloads of fuel<br />

each day. Small users are also almost certain to require<br />

deliveries from self-unloading trucks, while most large<br />

users have truck-unloading equipment on site.<br />

In some cases, an institutional or commercial<br />

biomass user may develop a special relationship with a<br />

local fuel supplier in the immediate vicinity. This might<br />

lead to lower fuel prices or the availability of types of<br />

biomass not generally found in the regional market.<br />

It can also provide stability of supply and assurance of<br />

continuity.<br />

In some areas, biomass users are able to fi nd<br />

suppliers within a 30-mile radius, which helps to<br />

reduce the transportation component of fuel cost. In<br />

other areas, suppliers are already shipping fuel 100<br />

miles or more, and may be very happy to fi nd a local<br />

market. (This may be refl ected in lower prices to the<br />

local user, or inhigher profi ts for the supplier.)<br />

The 1999 price for premium biomass fuel, highquality<br />

hardwood mill chips, was generally in the<br />

range of $25-30 per ton in the Northeast. Whole-tree<br />

chip prices are often cheaper than mill chip prices,<br />

depending on the competitiveness of the regional<br />

market. In some areas it may be possible to get<br />

whole-tree chips for $15-20 per ton. Only the largest<br />

institutional and commercial users generally purchase<br />

enough volume to get prices below $15 per ton.<br />

The exception would be the case of a specifi c local<br />

relationship between an individual user and a nearby<br />

supplier.<br />

1 Bruce McCallum, Handbook for Small Commercial <strong>Biomass</strong><br />

<strong>Systems</strong> on Prince Edward Island (prepared by Ensight<br />

Consulting for <strong>Energy</strong>, Mines and <strong>Resource</strong>s Canada,<br />

Charlottetown, PEI, Canada).<br />

WOOD CHIP HEATING SYSTEMS<br />

17

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