ECONOMIC BENEFITS OF HEATING WITH PELLETS SHOWN

RESEARCHERS FROM THE POPLAR TECHNOLOGICAL CENTER (CTA) ESTABLISHED THAT THE VALUE OF THIS BIOMASS WILL CONTINUE TO BE CHEAPER IN THE FUTURE.



June 23, 2017

Researchers from the Poplar Technological Center (CTA) identified a number of factors that support the decision about exchanging firewood stoves by pellet heaters to reduce air pollution. Among other variables, they determined that pellet prices are already lower than that of firewood in comparison to its performance and the trend is towards lower prices.
 
 
This conclusion is related to the "Innovation in Densified Solid Biofuels of Agricultural Origin for Urban and Industrial Residential Consumers" FIC-R project run by the CTA that looks for the generation of pellets from agricultural residues, among other ideas.
 
 
Ricardo Baettig, professor from the Department of Forest Sciences and Director of the project, highlighted the qualities that pellets have over wood. "There is uncertainty with firewood concerning the amount of energy that is actually being bought by factors such as stacking, density of the wood and the moisture content of this which, together with the efficiency of the heater, are the four factors that define the energy of this type of heating. With regard to pellets, the situation is completely different because, when you buy a bag of 18 or 20 kilos, you know, with almost total certainty, how much energy you get from that amount, as it is sold per unit of weight and has a homogeneous and known moisture content", he said.
 
 Prices
 
 
Currently, the calculation can be made with prices published by the Secretary of the Environment, delivered monthly, a bulletin available through its Regional Secretary of the Maule Region. This report shows that pellets, at normal price, costs between 5% and 25% less than firewood for equal contribution of useful energy.
 
 
The researcher added that, if a promotional price is captured, the value of pellet fuel can be up to a 45% lower. "Today, no one can say that firewood is the cheaper fuel in Chile, as the pellet has a price lower than the rest of fuels such as kerosene, oil, gas, liquefied petroleum gas, natural gas and electricity, which are widely more expensive when producing heat," added Baettig.
 
 
Therefore, preferring pellets is positive though the implementation of a stove of this type is now less affordable for a large percentage of the population, according to its analysis.
 
 
This is what addresses the current replacement program of the Environment Seremi involving the year 2025 to replace a 37% of the current park of firewood heaters.
 
 Economic Vision
 
 
German Lobos, an economist from the Department of Economy and Business and associate researcher of the project, provided background information regarding the values. "The price of pellet has still an ample space to continue decreasing in time; this is because the cost of production is low compared to the selling price that is currently observed. To put it another way, the raw material (stubble of agricultural and weeds) has a low cost and this feature is not reflected in the current value of the product. Therefore, it is reasonable to think that competition should lead to lower market prices," said the economist.
 
 
"What's more, you don't see events in the near future to be able to change this trend. This implies that we should observe a decreasing price for pellets and a price increase for firewood," he concluded.
 
 
From the social point of view, the academics reaffirmed that the aforementioned investment seems widely profitable, as it has other positive indirect effects, mainly associated to the decrease of the health costs and due to the absenteeism in school and work, as well as benefits associated with the reduction of suspensions of sport activities, among other aspects.
 
 
 
German Lobos expressed some of these projections in figures: "If we think that 10% of the firewood equipment - boscas, stoves, boilers, kitchen stoves - in the city of Talca are used in the lowest socio-economic strata, that is, in houses of up to eight million pesos (US$12,000, approx.), we are talking about 3,500 devices. In this case a direct subsidy to fully fund the cost of pellet stoves in these households would mean the government should spend six million dollars, approximately.
 
If in this calculation we include all the homes of up to 12 million pesos (US$18,000, approx.), the cost of the grant would rise to $27 million and would include 15 thousand 750 devices. In the latter case we would be reaching 45 percent of households in the lower and very low class," he concluded.



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