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Bioenergy from forest Mr.Ilpo Mattila, Head of Section Central Union of Agricultural Producers and Forest Owners (MTK) Eurofonet Conference 20.11.2007 Brussels. 164 000 MEMBERS. RURAL ENTREPRENEURS. FOREST OWNERS. FARMERS. FOREST MANAGEMENT ASSOCIATIONS (FMA) (150).

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Bioenergy from forest Mr.Ilpo Mattila, Head of Section

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Bioenergy from forest mr ilpo mattila head of section

Bioenergy from forestMr.Ilpo Mattila, Head of Section

Central Union of Agricultural Producers and Forest Owners (MTK)

Eurofonet Conference

20.11.2007

Brussels

Ilpo Mattila


Bioenergy from forest mr ilpo mattila head of section

164 000 MEMBERS

RURAL ENTREPRENEURS

FOREST

OWNERS

FARMERS

FOREST MANAGEMENT

ASSOCIATIONS (FMA)

(150)

LOCAL FARMERS ASSOCIATIONS

397

REGIONAL FARMERS UNIONS

(16)

FUR BREEDERS´

ASSOCIATION

REGIONAL FOREST OWNERS’

UNIONS (10)

THE OFFICE OF THE CENTRAL UNION OF AGRICULTURAL

PRODUCERS AND FOREST OWNERS

Maaseudun Tulevaisuus (Newspaper)

THE ORGANISATION OF MTK, 2007

Ilpo Mattila


Bioenergy from forest mr ilpo mattila head of section

Coal

13.3%

Oil

25.9%

Natural gas

10.9%

Hydro power

2.7%

Wood fuels 21 %

Nuclear

16.7%

Net import of electricity 3.1%

Heat pumps

REF and other

Peat

1.0 %

6.4%

Primary energy sources in Finland, 2005

Wind power 0.02%

Total energy consumption 1,402 PJ ~ 390 TWh ~ 37 Mtoe/a

Ilpo Mattila


Bioenergy from forest mr ilpo mattila head of section

Who owns Finnish forests?

Wage & salary earners

15.5%

Farmers

20.4%

Pensioners

19.8%

Entrepreneurs

3.7%

Other private

2.4%

Others

Forest Industry

4.9%

8.9%

State

24.4%

Share of Forest Area, %

Private Families 62%*

* 2007-

Private families 60%

State 26%

Source: Finnish Forest Research Institute

Ilpo Mattila


Bioenergy from forest mr ilpo mattila head of section

Use of wood fuels and peat in different sectors

in Finland in 2004

80% of wood energy is used in forest industry, use in other sectors is growing fast

50

Other industry, condensing power

Residental heating

District heating

Forest industry

40

30

TWh

20

10

0

Black

liquor

Forest

chips

Wood

residuesfrom industry

Small scale use of wood

Peat

Most bioenergy (=wood fuels) is used in large scale CHP production

within the emission trade sector without significant subsidies

Ilpo Mattila


Bioenergy from forest mr ilpo mattila head of section

Production costs of forest chips

Ilpo Mattila


Bioenergy from forest mr ilpo mattila head of section

Average price paid at the plant in Finland

Ilpo Mattila


Heat entrepreneurship what is it

Heat entrepreneurship – what is it?

Rural small and medium-sized entrepreneurship, in which the entrepreneur is paid according produced heat fuelled by biomass fuels

Forest owners refine the wood fuels into heat and do not sell only raw material

MTK has actively developed the operation model as an organisation for forest owners

Currently about 170 heat entrepreneurs managing some 340 plants

Total output is about 170 MWth

Heat produced 400,000 MWh/a

Use of wood fuels 600,000 m³ loose/a

Average boiler output 500 kWth

Largest heating plant is 3.6 MWth

1 solid m3 is about 2.5 loose m3 and about 2 MWh

Ilpo Mattila


Fuels operation and costs

Fuels, operation and costs

  • Solid biofuel as the main fuel, light fuel oil as reserve and for peak load

    Forest chips are the most significant energy wood.

  • Full-time entrepreneurs will be main trend in the future – today most of them are part-timer entrepreneurs

  • Pellet heat entrepreneurship is up and coming

  • Cost structure guarantees stable price of heat

    • Capital costs ⅓

    • Fuels ⅓ and the average fuel price is 16 €/MWh

    • Repairs, maintenance, administration, electricity, saleries ⅓

  • Earlier initial investment was done by the local authority, currently the entrepreneur is the most common investor

  • First customers were local municipal real estates and regional heating companies, currently the share of private enterprises is growing most rapidly

Ilpo Mattila


Small scale heat entrepreneurship

Small-scale heat entrepreneurship

Ilpo Mattila

Source: VTT/EUBIONET 2 (www.eubionet.net)


Number of heat entrepreneurs

Number of heat entrepreneurs

Ilpo Mattila


Heat entrepreneurship in the changing operating environment

Heat entrepreneurship in the changing operating environment

  • Change in the price relations

    • Light fuel oil is no longer the biggest competitor as the price has increased 2.5-fold in five years

    • The price of heavy fuel oil is sufficient enough to make wood heat more competence in the business

  • Competition with other heat entrepreneurs and energy utilities has increased

  • Effort is to increase plant sizes

  • Strengths:

    • Flexible way of operation

    • Smaller expected return on investment on capital than with energy utilities

    • 340 references available in Finland

Ilpo Mattila


Kyyj rvi energy co operative

Kyyjärvi energy co-operative

  • Established in 1998

  • 40 members, which are forest owners

  • Managing a 2.5 MW (1 MW + 1.5 MW ) wood chips plant

  • Heat production about 6,500 MWh/a

  • Plant and network owned by the local authority

  • ”The co-operative owns only the sample devise

  • Wood chips are purchased delivered into the silo at a MWh price

  • The wood chips cost €16.15/MWh (+ adjustment payment for the shareholders)

  • Local authority pays €22.95/MWh for the heat, contract valid indefinitely, price can be negotiated if necessary

  • Local authority sells district heat at a price of about €43/MWh

Ilpo Mattila


Considerations of the future of heat entrepreneurship

Considerations of the future of heat entrepreneurship

  • Co-operative thinking will move aside, entrepreneurship will increase

  • Entrepreneurs are also willing to build district heating networks

  • Local authorities will outsource heat production

  • A target of 1,000 heat enterprises in 2010

  • MTK to be a shareholder in the Biowin (www.biowin.fi) heat enterprise, which develops a franchising model for heat entrepreneurship

  • Forest owners and rural residents will own the heat companies

  • In addition to local authorities, the heating of the real estates of small and medium-sized enterprises will be part of the business operations to an increasing extent

  • Possible introduction of the feed-in tariff will increase competitiveness

Ilpo Mattila


Competition for fuel chips

Competition for fuel chips

  • The procurement of energy wood promotes forestry; a great need for early thinning of forests

  • Forest industry fears that pulpwood will be used as energy wood

  • If the forest industry does not need pulpwood, forest owners will sell it as energy in the future

  • Emissions trading and the EU targets for renewable energy will increase the competitiveness of energy use

  • The target is to utilise wood as raw material in the forest industry first

  • Second-generation biofuels are a challenging target for the use of wood

Ilpo Mattila


Bioenergy from forest mr ilpo mattila head of section

Ilpo Mattila


Unloading wood chips

Unloading wood chips

Ilpo Mattila


Bioenergy from forest mr ilpo mattila head of section

Ilpo Mattila


Thank you for your attention

Thank you for your attention

More information Ilpo Mattila, email:[email protected]

Ilpo Mattila


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