What Previous Wood Pellet Shortages Can Teach Us
A wood pellet shortage does appear from time to time, due to issues in a growing market demand and limited supply. The majority of the wood pellet fuel market is based around premium pellet fuel. Premium pellets are the highest grade of wood pellet fuel, the last wood pellet shortage was caused by a supply issue with premium pellet resources such as pine/oak sawdust.
Our Dependence On Premium Pellets
Premium pellets are made from softwood and hardwood residues, the wood must also be clear from bark. Most of the wood waste used for premium pellet production comes from the wood processing industry, making board and beams for the construction industry. Recently in the US, the housing market due to poor lending resulted in a collapse in the mortgage and housing construction market. As less properties were been built there was therefore less timber purchased for construction. Fewer sales meant less timber was processed, and therefore less waste wood residue was generated. This had knock on effects for premium wood pellet producers, as they struggled to acquire the wood they needed. This then led on to increased wood pellet costs across the market and the world.
Why Wood Pellets Cost What They Do
The cost of wood pellets depends on the quality of the pellet, and the source of the raw material. Premium pellets for example are the highest cost wood pellet, as they use very selective wood resources which produce the least amount of ash and therefore maintenance possible. Due to the specific raw materials used for premium pellets and limited available resources, the cost of premium pellets does depend on the available supply of the correct wood resources. Therefore the cost of premium pellets is directly effected by other markets and sectors.
Other wood residues such as willow, and biomass resources such as hemp can also be used to produce fuel pellets. Though the ash percentage maybe slightly higher than premium pellets, the supply is more controlled and hence costs are more controlled.
The Wood Pellets Production Guide
Wood pellet production is a technically demanding process. It relies on the right equipment, set-up, raw material and operator skills. At PelHeat, we are developing a small mobile pellet mill, and we receive many requests for information on how wood pellets are made. To aid general knowledge of the process, we have developed the wood pellet production guide. We also provide a unique range of pellet mills and pellet plants made in the UK to the highest standards. We even have the Mini Pellet Mill which can be used with a single phase electrical supply unlike most pellet mills.