how to address a scattered market? the case of italy konf...pellet production in canada and usa ons...
TRANSCRIPT
© Annalisa Paniz, AIEL
Annalisa Paniz
How to address a scattered market? The case of Italy Bruxelles, 13TH MAY 2014
© Annalisa Paniz, AIEL
• Who is AIEL?
• Is the ENplus certification supported by the Italian
companies?
• What is the Pellet market situation?
• What is the heating market in Italy?
• What are the current Pellet support schemes?
Contents
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WHO IS AIEL? The main Italian association of Wood Energy Chain
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Wood Energy Chain Association (300 members)
Representing the companies’ interests ‘from Forestry to chimney’
AIEL: Structure and organisation
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• 150 companies (Plants Designers, Installers, Farms, Mechanic industries, banks, ESCo, etc)
• 100 companies involved into the Working Groups: Biomass Producers, Pellets Producers and Traders, Small scale heating appliances' producers, Biomass Boilers producers, mini CHP producers, Biogas plants producers, etc)
• 50 public and private bodies (Research Institutes, Universities, Municipalities, Provinces (Landers), Energy agencies, Embassies, Foundations, etc)
Who are our 300 members?
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HOW IS THE SITUATION OF ENPLUS IN ITALY?
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EN PLUS CERTIFIED PELLET AT GLOBAL LEVEL
2013: 10 Million tons of pellets were used in Europe for heating purposes
105 producers in Europa, Canada and
USA
Germany
2013
2013: ALMOST 4 MILLION TONS OF PELLET WERE ENPLUS CERTIFIED ALL OVER THE WORD
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How will develop ENplus in Italy?
In less than 3 years the certification is becoming even more a point of reference
200.000 tons produced
600.000 tons traded
8.000 tons deliverided with autotank
After Germany and Austria, Italy was the third EU country where the ENplus certification was implemented.
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Geminati Pierino IT011
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For now we are the only Association who is doing so
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For now we are the only Association who is doing so
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THE ITALIAN PELLET MARKET The biggest European Market for domestic use
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Development of global pellet production
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Development of global pellet production
In 2013 for the first time in Europe the consumption for heating purposes has overtaken the consumption for the electricity power generation. 10 Million tons of pellets were consumed for heating purposes and 9 Million tons for power generation.
Rakos, ARGUS Conference
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Italy: the biggest European pellet market
TOTAL CONSUMPTION 2013 3,2 MILLIONS TON
The domestic consumption
represents 96%
How big is the Italian consumption?
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How many plants are installed?
Stoves and inserts: 1,9 Million
(21% second house)
≅15,2 GW
Boilers ≅200.000 (up to 35 kW) ≅5 GW
Big plants: At least 20 (> 1MW)
Boilers ≅2.500 (35 kW – 1 MW) ≅1-2 GW
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Annual growth 200-300.000 tons
Over 3,5 Million tons in 2015
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• Around 15% of the total biomass domestic installations (around 10,6 millions of heating systems) are fed with pellets
• Bagged pellet represents slightly less the total consumption. A significant high number of boilers are still fed with bagged pellets
• Bulk pellet transported with silo trucks is no more than 20.000 t
• The expected increase of this market sector is higher than the average growth of pellet market thanks to the increase of pellet boilers trade
•The market is fragmented: it is possible to buy pellets in every single shop, from mini market to Great dealers, from hardware store to hobby centres.
•According to the heating market growth expectations and the National Renewable Energy Action Plan statement, the use of pellets will reach 3,5 Mt in 2015 and 5 Mt in 2020
Some Market Considerations
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Selling of biomass boilers
ASSEMBLEA GCMB – VERONA 5 dicembre 2013
2013: over 22.000 boilers were sold, more than double compared with 2009
Pellet boilers are the market driver. In 2013, 4 times compared to 2009
Number of boilers
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Selling of pellet boilers
ASSEMBLEA GCMB – VERONA 5 dicembre 2013
2009-2013 Trend (∆) +268% Total number: 39.000 Total power: 1.160 MW
In 2013 were sold over 13.000 pellet boilers, mainly (95%) with a
nominal heating output of 35 kW (vs. 3.600 boilers of 2009)
+47%
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Data source: REF-E . Elab. AIEL (2014)
What kind of boilers were substituted with new biomass boilers installed in 2012?
6.500 Biomass boilers were installed in substitution of existing boilers in single heating plants
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1.900 Biomass boilers were installed in substitution of existing boilers in centralized heating prlants
What kind of boilers were substituted with new biomass boilers installed in 2012?
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In 2012 were sold around 330.000 biomass stoves, inserts, roomheaters, cookers, etc
190.000 were pellets heating appliances
Selling of biomass stoves
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THE HEATING SECTOR IN ITALY. A BIG POTENTIALITY FOR BIOMASS
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Stock of Single Heating systems installed in 2011 Data source: Istat, elab REF-E 2013
560.000 heating oil boilers 13.900.000 natural gas boilers 1.562.000 LPG boilers
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Stock of Centralized Heating systems installed in 2011 Data source: Istat, elab REF-E 2013
124.000 heating oil boilers 467.200 natural gas boilers 38.000 LPG boilers
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Installation of single heating system in existing buildings for producing the 100% of the requested heat
Data source: REF-E (2014)
Heating oil and LPG are installed when there is no natural gas grid
Biomass stoves and boilers are installed also in case of natural gas grid
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ITALY: AN IMPORT ORIENTED COUNTRY
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kt
Elab. AIEL su dati GAD, GCMB; GPDPENplus
Eurostat production 2012
750.000 t
Production and Consumption: an opposite trend
IMP
OR
T
2014: + 200.000 t (?)
© Annalisa Paniz, AIEL Eurostat. Elab. L. Baù - AIEL
Pellets importation is growing every year. Italian suppliers are more than 40, but only 10-12 of them represent 90% of the total amount. The remaining countries can be considered “spot suppliers”; their relevance to the whole supply is very low and unstable.
Italy is an Import oriented country
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Importation flows are very relevant in the Italian pellet market, representing over 80% of total supply. They compensate the reduction of production and allow the national supply to satisfy the increasing national demand.
Italy is an Import oriented country
Security of supply will become the main challenge in the close future. How are
importation flows developing?
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A NEW ORGANISATION OF THE ITALIAN PELLET MARKET
In 2013 starts
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What are the main changes?
Commercial partners (importation flows)
Logistic of supply (harbours)
Pellet prices
Bulk pellets imported oversea by vessel is increased and the number of international companies operating in our country is growing as well. More than a few Italian harbours (e.g. Napoli, Gaeta, Livorno, Civitavecchia, Savona, Ravenna) are currently
equipped with fines’ removers and bagging facilities
At least 600.000 tons are expected to arrive by vessel in 2014
The distribution chain (too fragmentised), stronger role of Department stores (+150% compared to 2012)
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Import in 2013: some considerations
ITALY DEPENDS STRONGLY FROM THE IMPORTATIONS
The export availability of the consolidated suppliers is lower
compared with the previous years, due to the increase of internal
consumption
AUSTRIA
2012 2013
Production
Internal Consumption
893.000 t 935.000 t
785.000 t 900.000 t
Difference
108.000 t 35.000 t
Fonte: EPC 2013
AUSTRIA, CROAZIA, SLOVENIA,
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Pellet production in Canada and USA M
illio
n o
f to
ns
Seth Walker – RISI - June 2012
The USA pellet production for export will increase in the coming years
Wood pellet exports from North America to Europe have doubled in two years to reach 4.7 million tons in 2013 with the US South accounting for 63% of the volume Wood Resources International LLC
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USA
2012 2013
Production
Internal consumption
4.100.000 t 4.800.000 t
2.200.000 t 2.300.000 t
Difference
1.900.000 t 2.500.000 t
Some USA pellet production sites are
entirely destined to the Italian market / to the
export to Italy
Source: EPC 2013
The production capacity of USA
But PFI estimates that the real domestic
consumption of pellet for heating purposes in 2013
has reached 3 Million tons
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WOOD PELLET COMPETITIVE POSITION
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Heating represents an important cost element for Italian families. In order to maintain a competitive position in the heating market, pellets has to be both a cheap and effective choice. It means that the market expectations are: • Pellets’ price advantage compared to fossil-based fuel (in particular the ones that are mainly used for the residential heating)
• Optimizing heating devices performance by using high quality wood pellets
The importance of the heating costs
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January, 2014
VAT and taxes included, delivery included
Primary Energy Cost Pellets vs other heating fuels
The cost advantage is decreasing
April 2014: the price of certified pellets in bulk is higher than the pellet in small bags. How the Ukraine crisis will act on natural gas price?
�€/MWh
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Pellet price comparison. Italy vs. other EU countries
Bulk pellets by trucks (€/t, delivery included, VAT excluded)
Source: EPC 2013
How is the pellet price developing?
December, 2013
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15 kg pellet bags (€/t, wholesale, VAT excluded)
Source: EPC 2013
What is the maximum level of price that can attract the end consumers?
Pellet price comparison. Italy vs. other EU countries
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THE CURRENT PELLET SUPPORT SCHEMES
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Some Preliminary information
There is no specific support scheme specifically for pellets. The support of using pellet is included in other general systems
Pellet is supported trough two different schemes
Tax deduction. The deduction is allowed in 10 years for the 50% of expenses incurred for buying and installing a pellet stove. This support is included into the “Ristrutturazione edilizia”
Feed-in-tariffs for heating and cooling, known as ‘Conto termico’ is a scheme of support for small-scale projects of energy efficiency improvement and production of thermal energy from Renewables.
1.
2.
The decree allocates every year € 700 million for projects implemented by private parties
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Feed-in-tariffs ‘Conto termico’: short overview
Replacement of heating systems fed with heating oil, coke or biomass (NO NATURAL GAS) with new renewable-energy systems biomass boilers or local space heaters.
In some cases is possible replacing also LPG heating systems
Eligible projects concern
This Feed-in-Tariffs, came into force on 3 January 2013 and implemented the Legislative Decree no. 28 /2011 which is the Italian application of the EU Directive RED 28/2009
What kind of biomass is allowed?
• Wood pellets certified in accordance with EN 14961-2 • Wood chips (in accordance with EN 14961-4) • Wood logs (in accordance with EN 14961-5) • Other not chemically treated biomass (in accordance with Dlgs
152/06)
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Feed-in-tariffs ‘Conto termico’: short overview
Minimum requirements for heating systems
Eligible parties are
• public administrations
• private parties: individuals, apartment block owners and parties with business or agricultural income
Certified in accordance with
PPBT mg/Nm3 (13%
O2)
CO g/Nm3 (13%
O2)
Performance %
Pellet stoves
EN 14785
40
0,25 > 85
Pellet boilers
EN 303-5 – Class 5
30 0,25 > 87 + logPn
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Feed-in-tariffs ‘Conto termico’: short overview
The incentive will be paid yearly in 2 years for stoves and 5 years for boilers.
The incentive is based on
• Nominal power (kW)
• Supposed using hours (based on Climatic zones)
• Coefficient of incentives (Ci)
• Level of emissions (Different coefficients of performance Ce 1 – 1,2 – 1,5)
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Examples for pellet stoves (< 35 kW)
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Examples for pellet boilers (< 35 kW)
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CONCLUSIONS
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• Italy is the biggest European Market for the
domestic use of pellets
• Italy is depending strongly from the importation
• The market logistics and organisation are changing
and in the close future North America will become
the major supplier
• Security of supply and stability of prices are the
main challenges for the future
Conclusions
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THANKS! [email protected] www.aiel.cia.it