The economic advantages and disadvantages of woodfuel systems are summarised below.

Financial Advantages

• Wood is often cheaper than fossil fuels on a £/kWh basis (especially wood chip)
  • At £75/tonne (30% moisture) chip costs around 2.3p/kWh
  • At £175/t wood pellet costs around 3.7p/kWh
  • Gas is currently around 3.5p/kWh
  • Heating oil is currently around 5p/kWh
• In the industrial, commercial and public sectors, the climate change levy adds between 0.154 and 0.441 p/kWh to energy derived from fossil fuels
• Where woodfuel CHP technology is employed the electricity generated would create Renewable Obligation Certificates. ROCs hold a market value of around £50 per MWh
• Grants are sometimes available to help cover the capital cost of woodfuel heating systems
• Woodfuel boilers are generally of more robust construction than modern gas or oil boilers and have long life expectancy, increasing the replacement interval and reducing lifecycle costs
• The woodfuel industry contributes to the local economy and generates jobs in the rural sector

Financial Barriers

• The capital cost of a woodfuel heating system can be many times that of a conventional fossil fuel system
• Operation and maintenance costs for wood boilers are higher than for fossil fuel equivalents. This is partly because the woodfuel industry is still relatively small
  

CEN offer energy services contracts (ESCOs) for biomass systems, which could significantly reduce the capital required to install a system. Click here to find out more.

Back to main biomass page.