Austrian study: heating with biomass remains two-thirds cheaper than heating oil - households save €1800 per year, sector creates thousands of jobs
Of the renewables, a clear winner is now emerging, capable of taking over the fossil fuel based heating sector: biomass. From Austria come new data showing the fuel remains a whopping two-thirds less costly than heating with fossil fuels at today's prices. Biomass heat is now touted in Europe as a way for families to beat inflation caused by high energy bills, while simultaneously contributing in a practical way to fight climate change. For governments, it has become a strategy to tackle growing energy poverty in a cost-effective manner.
Last year we received some data from Austria, where heating with biomass pellets has seen a massive growth - a phenomenon witnessed throughout Europe. In September 2007 heating with heating oil on average cost 7.06 eurocent per kWh, whereas heating with pellets cost only 3.81 eurocent per kWh (previous post). This big difference has spurred further growth, with thousands of households switching to the green fuel. Increased demand pushed up prices for biomass pellets. So how do things look today, one year later?
According to a new study on the economics of biomass heating and the results of the European Biomass Action plan in Austria, the cost difference has grown further, because new wood pellet production plants have come online to meet increased demand. Biomass pellet trade too has grown strongly in Europe. According to the study, commissioned by industry association proPellets Austria, the average cost to heat a home with biomass is now around €1200 per year, whereas the cheapest alternative, heating oil, will set back families €3000 per year, based on projections for this year. (Graph: prices until the first quarter of 2008 - click to enlarge).
The data are based on a typical yearly consumption of 3000 liters of heating oil per household, with a heating oil price of €1/liter. Wood pellet prices were estimated to average €200 per ton. With these realistic numbers, individual households can save €1,800 per year by switching to renewable heat. The switch would also save 8,000 kilograms of CO2 per household.
The strong growth in biomass fueled heating systems amongst households and industry proves to be one of the most efficient and cleanest ways to fight inflation resulting from high energy prices. Biomass heating is having a tangible effect that helps counter the downward trend in the economy. Simultaneously renewable heat offers a cost-effective strategy to reduce CO2 emissions in a significant way. - Dr Christian RakosEnergy poverty and inflation resulting from high heating bills does not have to be taken for granted, it has become a real social and economic problem that has governments throughout the EU worried. On the level of Austria as a whole, the implementation of the Biomass Action plan, of which the renewable heating component is the most important one, has been very beneficial in this regard.
The Biomass Action plan projects that by 2020 around 400,000 households in Austria will have made the switch to biomass-fueled boilers to heat their homes. This goal can be achieved by relying on locally and sustainably sourced biomass. The implementation of the plan will bring 11,000 new jobs in the country's heating sector - today's trend shows this projection is realistic. The switch would save Austria some €800 million euros per year by 2020:
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This summer Austria's Homeowners & Homebuilders Hotline - which informs citizens about renewables, conservation and efficiency in domestic buildings - has received twice as many applications for information about heating with biomass than in the summer of 2007, which was already a record year. Apparently, the relatively high acquisition and installation costs of a biomass heating unit doesn't deter Austrians to make the switch to renewable heating:
The price ticket for a new biomass heating installation for an average home is between 13,000 and 17,000 euros. Because the fuel is renewable and climate neutral, and thus helps the country achieve its Kyoto and EU goals, the state government contributes in paying 10% of this cost, whereas the federal government adds another 10%. This brings down costs to anywhere between 9,200 and 13,200 euros for a new boiler. For companies and industries, the incentive covers 30% of the costs.
At current heating oil prices, this investment is won back after 5 years. Modern biomass heating units at this price are fully automated and yield heat on-demand. They have a useful life of several decades.
Heating with biomass strongly reduces greenhouse gas emissions, which allows the government to win back the cash it spent on subsidizing the sector. According to the study, heating with electricity generates around 681kg per CO2eq / MWh; with heating oil 342 kg, with natural gas 228 kg and with pellets only 68kg / MWh (graph, click to enlarge). If the targets of the Biomass Action plan are met in Austria, the country will reduce its emissions by some 2 million tons per year. The accumulated amount will be 100 million tons in 2040.
The government wins back its subsidies by avoiding the purchase of carbon credits on the market. The scenario used in the study is based on a realistic carbon price of €17 per ton (today's price was €24.65 - September 20, 2008).
Biomass can be used for a myriad of products and services, from heat and power to bioproducts like plastics or building materials, to liquid fuels and hydrogen. But using it in the oldest, most simple way, - to heat your home - remains the more efficient option.
Most of the pellets used in Europe are wood pellets, but interest is growing in making them out of dedicated energy crops like miscanthus or fast growing trees like poplar.
A recent study by Dutch and Canadian researchers has shown that using this biomass as a solid fuel for heating purposes is 570% more efficient in reducing greenhouse gas emissions than using the resource for the production of liquid transportation fuels. Biomass pellets from miscanthus reduce GHG emissions by 7,600 to 13,100 kg CO2e per hectare. By comparison, soybean biodiesel and corn ethanol were found to reduce GHGs by a mere 900 and 1,500 kg CO2e per hectare respectively.
Rakos, Christian, "Heizungstausch senkt Kosten für private Haushalte" [Making the switch strongly reduces costs for households], Study commission by proPellets Austria, September 2008.
Österreichischen Rundfunks: "Heizen mit Biomasse deutlich günstiger" [Heating with biomass clearly less costly] - September 18, 2008.
Biopact: Study: solid biofuels 570% more efficient than corn ethanol in reducing GHG emissions - September 10, 2008
Biopact: Biomass pellets revolution in Austria: 46% less costly than heating oil; most efficient way for households to reduce carbon footprint - October 06, 2007