pellet market country report slovenia - pelletsatlas.info · 4. mixed biomass pellets according to...

Development and promotion of a transparent European Pellets Market

Creation of a European real-time Pellets Atlas

Pellet market country report

SLOVENIA

Copyright © Geonardo Ltd

Záhony utca 7

HU-1031 Budapest, Hungary

September 2009

Prepared by Geonardo

Peter Gyuris

Adrienn Csekö

Contact [email protected]

Tel. +36-1-250 6703

This report is available at the pellets@las website at www.pelletsatlas.info

The pellets@las project is supported by the European Commission under the EIE programme (EIE/06/020/SI2.448557). The sole responsibility for the content of this report lies with the authors. It does not necessarily reflect the opinion of the European Communities. The European Commission is not responsible for any use that may be made of the information contained therein.

Country report Slovenia

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TABLE OF CONTENTS

1. Introduction ......................................................................4

2. Pellet production ..............................................................6

3. Pellet trade and consumption .........................................8

4. Mixed biomass pellets ...................................................10

5. Legal framework and legislation...................................11

6. Projections on future developments ............................12


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1. Introduction

Slovenia is one of the most densely forested countries in Europe. More than a half of its territory (1,169,196 ha) are covered with forests (forestation amounts to 57.7 %). Dominant forest types are beech, fir-beech and beech-oak, which have a relatively high production capacity.

0

500.000

1.000.000

1.500.000

2.000.000

2.500.000

3.000.000

3.500.000

1955 1960 1965 1970 1975 1980 1985 1990 1995 2000

Gro

ss v

olu

me (

m3)

Total cut

Cut for fuelwood

Figure 1: Quantity of cut for fuelwood and total cut 1955 - 2000 (Source: State of the art of wood biomass preparation and use in Slovenia, TCP project final report)

The growing stock of Slovenian forests amounts to 300,000 cubic metres or 257 cubic metres per hectare (Slovenia Forest Service). The share of growing stock of coniferous trees is 47.4 %, of deciduous trees 52.6 %. In Slovenian forests there is an annual increment of 7,569,040 cubic metres of wood.

Figure 2: Total primary energy by sources (Energy Restructuring Agency, ApE)

The use of this potential (the total annual quantity of entry raw materials of the inquired producers of wood biomass is 113,035 m3) resulted in a high share of wood usage among renewable energy sources (Figure 2). Approximately 4 % of the Slovenian primary energy consumption derives from biomass.


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The Slovenian Forestry Service survey (2004) revealed two producers with 35,000 tons of pellets produced. In a study by the Agency for Efficient Energy Use (AURE) three producers were mentioned with a total capacity of 75,000 tons and a 2008 survey (Gratenau and Hesselbacher) reported also three producers with a total capacity of 89,000 tons. According to Geonardo’s research four producers with total capacity of 185,000 tons are operating in Slovenia.

Biomass has been used mostly for heating and small-scale electricity production but we have found large-scale users substituting charcoal in power plants. However, pellets face significant competition in Slovenia as firewood and wood chips have been commonly used energy sources for a long time.

Respective bodies and stakeholders providing surveys and studies on pellet production, trading and consumption have already been mentioned:

• Energy Restructuring Agency (ApE), independent consulting company;

• Agency for Efficient Energy Use (AURE), (state) client of Institute Jozef Stefan, Energy Efficiency Center;

• Slovenian Forestry Institute - Department of Forest Technique and Economics (state).

Information on the Slovenian renewables sector is readily available since a complete system was set up containing documentation from various sources. Energy GIS by ApE (http://www.ape.si/) is a spatial information system on renewable energy sources, potentials, capacities etc., including information on installed wood pellet boiler locations and operation parameters.


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2. Pellet production

The known major wood pellet producers in Slovenia are marked with red dots on the map below.

Figure 3: Major Slovenian wood pellet producers (map source: Google Earth)

In 2004 Slovenia registered its first big producer of pellets according to the report of the Slovenian Forestry Service (TCP project final report). In the study of AURE (2005) the producer mentioned in the above report was still listed and two additional plants were registered. These new companies have been operating since 2005 as the reports show. By 2005 the production capacity has doubled to 75,000 tons in total.

In 2008 a research study was presented by Mr. Alen Bukvic (Gratenau and Hessler), in a UNECE and FAO workshop called “Wood energy - the fuel of choice for Serbia”. In this study three major wood pellet producers were mentioned in Postojna, Hrusevje and in Cerknica. Two of them were already listed in the 2005 study of AURE.

Geonardo’s investigation in the spring of 2009 revealed that these three companies are still operating and that one additional producer entered the market in the meantime. This company works in the north of the country but it is unclear which amounts and qualities are produced. The table below shows these producers and some parameters of the production facilities.


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Table 1: Major pellet producers with production amount standards and raw material indicated

Producer Location Annual production

Pellet type Raw material Standard

GGP

»ENERLES

Pivka, 60,000 t

6 mm

8 mm

pine »GOLD« ITA

PROFILES Razdrto 50,000 t 6 mm 85% beech

15% pine

»GOLD« ITA

MADJ d.o.o. Cerknica/Martinjak

28-30,000 t »GOLD« ITA

Mizarstvo Kovac d.o.o.

Mozirje 15,000 t 6 mm 90% pine

10% hard

Three of these major pellet producers rely on exports to the Italian market as they produce according to Italian standards / certifications and are close to the border. This situation will be described in detail in the next chapter.


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3. Pellet trade and consumption

In Slovenia forestry products (e.g. wood chips) have a long tradition in trading. A well-organized online trading platform has been working for years already (http://res.borzen.si/DesktopDefault.aspx). This biomass-trading portal is powered by the Agency of Efficiency Energy Use and is available in English and in Slovenian. The portal was initiated by a governmental project on “Removing barriers to the increased use of biomass in Slovenia” which was supported by the Global Environment Facility (GEF). Within the framework of this project the Slovenian government also plans to increase the country’s biomass share in primary energy use up to 6.5 %.

The trade platform focuses on biomass goods and besides conventional forestry or wood processing industry products wood pellets are traded. The portal disseminates information on renewables (especially biomass) and even contributes to defining pellet fuels as can be seen below on a slide from one of the web portal’s brochures.

Figure 4: Code table for pellets and briquettes

(Source: http://res.borzen.si/DesktopDefault.aspx)

Pellet consumption is relatively small in Slovenia except for one case. According to Geonardo’s research two power plants are purchasing pellets to substitute charcoal. The two power plants are in Trbovlje and in Sostanj and use low quality pellets for combustion.

In the table below six major traders are listed who are exporting pellets. As mentioned in the previous chapter three companies use Italian standards. At the moment, the biggest share of wood pellets is exported.

The relative location of Slovenia is more fortunate compare to other Balkan countries regarding the closeness of foreign western markets. On the previously mentioned conference organized by UNECE and FAO, Mr. Alen Bukvic presented a calculation for transport costs of one ton of pellet on trucks. According to Mr. Bukvic the difference is 15 EUR/ton if pellets is transported from Slovenia or from more eastern Balkan countries.


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Table 2: Major trading companies in Slovenia

Pellet trader Sales to:

Istrabenz – Gorenje, Nova Gorica

• Italy (60 %)

• Slovenia (40 %) (power plants)

ENERLES d.o.o.

• Italy (90 %)

• Slovenia (10 %) (small shops)

Profilles • Italy (80 %)

• Slovenia (20 %) (15 % to power plants)

LINDAP d.o.o. • Austria (20 %)

• Italy (20 %)

• Slovenia (60 %)

BIODOM Slovenia

Peleti-Expres doo Austria

Regarding prices the Slovenian Forestry Service project (TCP) showed that prices fluctuate between € 120 and € 190, depending on packing type. During Geonardo’s research prices hardly exceeded these values.

Table 3: Prices of wood biomass in Slovenia, August-September 2004 (Source: State of the art of wood biomass preparation and use in Slovenia,

TCP project final report)

€ / t € / stacked m3

€ / loose m3

Logs 45 40

Wood chips 13 - 25 5 - 21

Briquettes 62 – 166

Pellets 117 - 186


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4. Mixed biomass pellets

According to Geonardo’s research, there are no producers, traders, retailers or consumers of agropellets or mixed biomass pellets (MBP) in Slovenia. The market is in the initial stage and does not show any tendency towards further development.

The use of MBP is mainly focused on medium to large-scale heat and power plants. The Slovenian report on the implementation of Directive 2001/77/EC states that wood is used primarily in industry (electricity production) and does not mention the use of mixed biomass pellets. Therefore, it seems that MBP are currently not used in Slovenia.

Energy policy targets in the Republic of Slovenia set out in the Resolution on the National Energy Programme (OJ RS, No. 57/04) include increasing the share of renewables in the supply of heat from 22 % in 2002 to 25 % by 2010 (Report of the Republic of Slovenia to the European Commission on the implementation of Directive 2001/77/EC of the European Parliament and of the Council on the promotion of electricity produced from renewable energy sources). Energy policy targets include raising the share of electricity from renewables from 32 % in 2002 to 33.6 % by 2010. This also may indicate the use of MBP, though in the light of other circumstances, this does not significantly increase the potential for market development.

“The basic barrier causing slow development of electricity generation from renewables is low purchase prices. It is evident from the European Commission report COM(2005) 627 that prices in the Republic of Slovenia are among the lowest in the EU-25” (Report of the Republic of Slovenia to the European Commission on the implementation of Directive 2001/77/EC of the European Parliament and of the Council on the promotion of electricity produced from renewable energy sources).

The above-mentioned report says that another serious barrier to the development of the wood pellet market is the unsuitability of the fixed purchase prices mechanism. The reason why it is unsuitable is that the price of wood biomass on the market is changing (increasing). It is recommended that the purchase price of electricity from wood biomass power plants should depend on the price of wood biomass on the market. In the case of Slovenia, the price factor does not seem to be applicable to the MBP market, but this is simply due to the fact that the MBP market is not established in the country.


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5. Legal framework and legislation

Several Slovenian policy initiatives address the use of RES (based on: Mr. Lojze Subic, AURE, 2005):

• “Resolution on the Strategy of Energy Use and Supply of Slovenia” - February 1996, long-term objective to substantially increase the share of renewable sources within the primary energy balance;

• “The Energy Act” - September 1999, places special emphasis on the promotion of the use of renewable energy resources and gives priority to the utilisation of renewable resources before the energy from non-renewable resources;

• The Resolution on the National Energy Programme, National Assembly (ReNEP) - May 2004, The ReNEP proposes financial support of € 7.3 million per year for implementing the programme in the field of woody biomass, while the proposal for the yearly budget intended for efficient energy use and RES amounts to € 58.3 million per year.

Moreover, for the period 2007 – 2013 Operational Programmes have been launched, approved by the European Commission:

http://www.svlr.gov.si/en/main_gosp_areas_of_work/eu_cohesion_policy_department/.

The National Strategic Reference Framework states that programmes will be implemented that promote investments to increase energy efficiency and the use of renewable energy sources (e.g. use of modern technologies for heating). The indicative budget for the period allocated to the thematic area “Energy: Renewable energy: Biomass” is € 21.300.000.

The support of biomass as renewable energy source (i.e. production, usage, and technological development) is covered by programmes like the National Strategic Plan of Rural Development raising added value and the quality in production and processing of agricultural, food and forestry products. Activities in this field will aim at strengthening the effectiveness, innovation, quality improvement and environmental protection in the production, processing and marketing of agricultural, food and forestry products. Furthermore, the Operational Programme Strengthening Regional Development Potentials (The determination of measures enabling the modernisation of the existing and the introduction of new technologies encompasses the environmental requirements concerning the use of renewable energy sources) and the Operational Programme of Environmental and Transport Infrastructure Development (rehabilitation of heating systems, installation of condensation and modular boilers, installation of boilers using wood biomass) are aimed at promoting renewables.


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6. Projections on future developments

Slovenia has a great potential regarding woody biomass resulting from the abundance of forestland. According to the Slovenian Forestry Service the cut of woods for energetic purpose is increasing continuously during the last years. Technological development and dissemination of information on improvements in firewood, wood chips or pellet combustion equipment promote increasing sales of these goods.

The Slovenian pellet market is characterized by a significant competition with other forms of firewood (e.g. wood chips) but in general the market is growing. Since 2004 when the first major producers started operating pellet plants the production multiplied. Concerning the quality of the pellets produced mainly Italian standards are relevant. As the interviews with the companies revealed the main export target country is Italy. Slovenia is well located to leverage export opportunities to Western European markets. The domestic consumption is also rising and large-scale consumers, namely several power plants, use low quality pellets for co-combustion. The Slovenian biomass market is also supported by an online trading platform available in English as well.

As forests are abundant and thus wood is available in large amounts it seems like wood pellets will become competitive in the near future. Furthermore, national legislation and operative programs initiated by the state are in place to promote further market development.

pellet market country report slovenia - pelletsatlas.info · 4. mixed biomass pellets according to...

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