“Pellets are currently in great demand,” the head of proPellets Austria, Christian Rakos, said in an interview with the APA. He asked owners of pellet heating systems to be patient, dealers could meet the demand, but not all at the same time. Wolfgang Holzer, head of wood sales at Federal Forests, even reported in “Presse” about people asking for “Klaubholz bills.” These certificates existed in the post-war period, allowing the Viennese to collect wood in the forest after the war. Rakos also senses the nervousness. Customers who normally place orders in October are already asking what is making the supply situation worse.
Customers ask for more than usual
Customers would also order more pellets than usual. “Our recommendation is not to buy more pellets than you need this winter, because the price will normalize again,” predicts Rakos. “Whoever buys more this year, buys expensive.” The 66% increase in the price of pellets compared to 2021 is also related to the war in Ukraine. Austria’s neighboring countries, which have already bought pellets from Russia, Belarus or Ukraine, “create a certain attraction”, as Rakos explained. However, at 7.5 cents per kilowatt-hour of heat, pellets are still half the price of heating oil.
Austria itself is not dependent on pellet imports. In 2021, 1.6 million tonnes of pellets were produced across Austria and 1.2 million used. 700,000 tons were exported, mainly to Italy, and 300,000 tons were imported. In Tyrol, for example, the pellets are exported to Italy and in Lower Austria the pellets are imported from the Czech Republic because the distances are shorter, explained Rakos.
Annual demand is expected to rise to 2.6 million tonnes
The pellet industry lobbyist expects annual demand in Austria to rise from the current 1.2 million tonnes to 2.6 million tonnes in the next four to five years. This value is also approximately the maximum of the generating potential. The number of pellet heating systems will also rise sharply this year, from 162,000 to around 185,000. Rakos estimates that pellets can power 500,000 to 800,000 homes, depending on energy consumption. On average, a house needs five tons of pellets a year, with a well-insulated house just three.
Speaking of insulation: whoever converts from oil to pellets, sooner or later will not be able to avoid isolation, because the climate crisis means that more pellets can be produced in the short term because the spruce forests, which fall victim to the beetle due to the heat and drought, must be defeated. By mid-century, however, there will be a decline in pellet production because the mixed forests replacing spruce monocultures grow more slowly, Rakos said. In the case of beeches and oaks, there are more sawmill by-products that can be used for pellets, but they take a hundred years to mature.
Space heating: in the long term, pellets do not play an important role
In the long term, pellets will not play an important role in heating the environment, according to Rakos, they are a type of transition technology from 30 to 50 years. Older homeowners, in particular, are switching from oil-fired heating systems to pellet boilers. This is also due to the fact that many cannot insulate the facade and replace heating at the same time.
In the case of a heat pump, radiators often need to be changed and a photovoltaic system possibly installed. The market is divided here – into heat pumps on the one hand and pellet stoves on the other. This mixture of the two forms of heating is also important, according to Rakos, because relying only on heat pumps, which guarantee high loads of electricity in winter, is also not good until enough green electricity is generated in winter.
Pellet heating systems are considered climate neutral because no fossil carbon dioxide (CO2) is released. Trees absorb CO2 from the atmosphere as they grow. If they are felled and the wood is used as a building material or as furniture, the CO2 is stored in it. If the wood is burned, however, the CO2 is released again. “For the climate, the ideal is to use wood as a material as far as possible and only use waste that cannot be used as a material for energy,” explains Rakos. Simply leaving the forest where it is and not cutting down more trees is not a solution and would have several disadvantages. Firstly, the forest has to be converted to be able to withstand rising temperatures, secondly, the CO2 storage capacity decreases once a tree is fully grown.