Wood Pellets - The Facts

The carbon-neutral way to heat your property  
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Wood pellets are the convenient, renewable alternative, both to fossil fuels for heating your property, and to straw and shavings for animal bedding.

This site has been created as a resource for information and discussion on wood pellets. For Wood Pellet Supplies, see Forever Fuels, who have taken over the wood-pellet supply activities in the UK of Lantmännen Renewable Fuels. For Heat Logs, see the Renewable Wood Fuels website. For SRC/Wood Chips, see Coppice Resources Ltd.

What are wood pellets?

Wood pellets are made from wood that has been dried, ground and compressed to create an easy-to-handle, high-energy wood-fuel, typically 6 or 8mm in diameter and between 5 and 40mm long.

How are wood pellets used?

Wood pellets are burnt in heating appliances, just like gas, oil and LPG, e.g. pellet boilers for central heating and hot water, and pellet stoves for space heating. They are also highly absorbent, and are therefore popular as a substitute for straw or shavings for animal bedding.

How are wood pellets delivered?

Wood pellets can be blown into the boiler's fuel-store by a pneumatic delivery lorry, like deliveries of heating oil and LPG, or delivered in bags for manual handling.

Are wood pellets as convenient as other heating fuels?

Wood pellets have a high energy-content and low moisture-content compared to other wood fuels. Consequently, they need less storage-space and burn easily throughout the year.

Wood pellets flow well, so they can be handled easily by automated systems that adjust the heat production to your needs, just like fossil-fueled boilers.

Are wood pellets clean to use?

High-grade pellets are made with fresh, clean wood (“virgin fibre”), either direct from the forest, or using by-products from saw-mills.

Wood pellets from a quality supplier are consistent and clean. Good, automated heating systems burning consistent, high-grade fuel produce low emissions. Several pellet boilers and stoves are suitable for use in Clean Air Zones. DEFRA publish a long list of appliances, including many pellet stoves and boilers, which are exempt appliances (when using the specified fuels) for the purposes of the Clean Air Act.

High-grade wood pellets have a very low ash-content, less than 0.7%. A typical property needing 20 MWh of heat per year would need just over 4 tonnes of wood pellets and produce around 25 kg of ash (the weight of a typical bag of compost or cement). Ash from virgin-fibre pellets may provide useful nutrients if spread on the land.

Are wood pellets sustainable?

The wood for high-grade pellets usually comes from sustainable sources (ask for "FSC or equivalent"). Wood pellets are generally produced from conifers. Rainforests are not cut, and agricultural land is not diverted, for the purposes of producing wood pellets.

Sustainably-harvested wood is part of the carbon cycle – the carbon dioxide from combustion is absorbed by growing trees. Compared to their energy content, wood pellets require little fossil-fuel to produce and distribute. They have a very low carbon footprint, even when transported over long distances.

Is there plenty of wood to go around?

There is a lot of wood, and a lot of uses for the wood. Even if we used all the forests for energy, it wouldn't be enough to meet all our energy needs sustainably. In any case, a lot of the forest is needed for environmental services, and for producing timber and pulp (for paper).

But the pulp industry is in decline, hopefully permanently, as we stop printing stuff that modern technology makes it unnecessary to print. And you can't use the whole of a tree for timber unless we invent square trees.

So there's a substantial resource of wood that is best used for energy. It may not be able to meet all our energy needs, but no energy-resource can. It can make a substantial contribution, particularly if we use it as efficiently as possible (i.e. for heat) and get it as efficiently as possible from where the trees are plentiful to where the people are plentiful.

Because they are dense and dry, wood pellets can be transported efficiently and economically over long distances. Wood pellets are an international commodity, allowing regions with more wood than people to sell to regions with more people than wood.

Can I depend on wood pellets?

As a solid fuel, wood pellets are easier to store in large quantities for long periods than gaseous or liquid fuels (like gas, oil and LPG), let alone electricity. Serious wood-pellet suppliers build up stocks in the summer to ensure that they have plenty in hand when demand peaks in the winter. This is what makes it such a good heating fuel, and why it is such a waste to burn it at low efficiency in massive power stations throughout the year. We consume much more heat than electricity, and very few fuels (and no other renewables) can match biomass's suitability for seasonal energy-demands.

The UK has the potential to produce significantly more wood pellets than at present, and current production is many times higher than the current demand for pellets for heating. Most of the countries that produce a lot of wood pellets are friendly countries (e.g. Sweden, Finland, Austria, Germany, Canada, USA, etc.).

There is little risk that a hostile country with a substantial resource could cause price-spikes or interruptions, as there is for gas and oil. Pellet prices have remained pretty stable when suppliers of gas, electricity and heating oil have pushed up their prices in recent winters.

What will it cost me?

It depends, of course. You can lookup what a delivery of wood pellets would cost to your property by entering your postcode and the quantity and type of pellets you would require into Forever Fuels' wood-pellet Price Calculator.

Blown deliveries of high-grade pellets generally cost between £160 and £250/tonne delivered, depending where you are and how much you can take in one go. £40/MWh (£192/tonne) would be a reasonably-typical price.

Bagged pellets can be bought by the individual bag or by the pallet-load. A 1-tonne pallet of high-grade pellets will probably cost between £200 and £300 delivered. £52/MWh (£250/tonne) would be a fairly-competitive price. By the bag, wood pellets may cost between 30 and 50 pence per kg. £80/MWh (e.g. £4.80 for a 12.5kg bag) would not be unusual.

You will need a boiler or stove to convert the wood pellets into heat. When looking at prices online, make sure that the price includes all the necessary equipment, such as the flue and the fuel-store (for boilers), and the cost of installation, and not just the boiler or stove alone.

A rough rule of thumb would be £5,000 plus £500 per kW of capacity, for the cost of a pellet boiler including all necessary ancillaries and installation at a site with no special requirements. You will find prices that are significantly higher and lower than this. If the price is much lower, be careful that the equipment and installation will be of good quality.

Pellet stoves may cost from £2,500 upwards installed.

The forthcoming Renewable Heat Incentive (RHI) will reward the carbon-savings from heating with wood pellets (amongst other technologies). It was originally proposed at the levels of £90/MWh for boilers up to 45 kW, £65/MWh for boilers between 45 and 500 kW, and £16-25/MWh for larger boilers. It is likely to be reduced somewhat in the light of the economic situation, perhaps by around 20%. The Government has promised to introduce it in June 2011, although that is also likely to slip a little as they are several months overdue publishing their proposals. Nevertheless, for small-to-medium pellet boilers, the RHI is likely to result in a negative net cost of running in the not-too-distant future (i.e. the value per MWh of the mechanism is likely to be higher than the cost per MWh of the fuel).

Unfortunately, wood-burning stoves, including pellet stoves, looked likely to be excluded from the RHI under the original proposals.

How does that compare with other heating fuels?

A condensing gas boiler may cost (depending on size and quality) upwards of £1,000 installed, a condensing LPG boiler maybe £4,000, an oil-fired boiler maybe £6,500, ground-source heat-pump £9,000 (plus secondary heat-source), air-source heat-pump £6,000 (plus secondary heat-source), a wood-chip boiler around a couple of thousand pounds more than a wood-pellet boiler.

It is difficult to compare a direct electric heating system with these options, because electric heating requires significant differences in the wider central heating and hot water systems, but in any case, direct electric heating is the most expensive and carbon-intensive option available, to be used only as a last resort. Just because you can't see them doesn't mean that fossil fuels aren't being burnt for electric heating - they are, and at 40% rather than 90% efficiency, plus transmission losses.

To compare the cost of wood-pellet heating with other comparable options, you need to weigh the differences in the capital costs and the running costs. If you have a working boiler, the capital cost is simply the cost of a pellet-boiler. If you need a new boiler, the capital cost is the difference between the cost of a pellet boiler and the alternatives. The running costs can be calculated as the difference between the alternative fuels and the cost of pellets, multiplied by the amount of energy used, plus the value of the RHI.

For example, let's take a new property that is off the gas grid and expected to need 25 MWh of heat each year. An oil-fired boiler costing £6,500 might consume £1,425 of oil each year. A pellet boiler costing £12,500 installed might consume £1,125 of pellets each year (a small consumer like this will pay an above-average price), and receive £1,500 from the RHI - a negative running cost of £375 per year. The extra £6,000 it costs to buy a pellet boiler has to be set against the difference of £1,800 in the annual running costs, i.e. a payback of around 3½ years - a compelling proposition.

If, on the other hand, you already had a serviceable oil-fired boiler, you would have to compare that difference in the annual running cost (£1,800) with the full cost of a new pellet boiler (£12,500) - a longer-term investment. In practice, the gains may be greater than this suggests, as old boilers tend to be inefficient, so the savings from a new boiler of any description are likely to be greater than a like-for-like replacement.