Why Is The Wood Pellets Price So High?

The price of wood pellets is based around several factors. The quality of the fuel, the source and availability of the resources, energy prices for production and market demand and supply. The price of wood pellets has been fair stable compared to the price of fossil fuels. As more biomass resources are utilized and there are more wood pellet producers, prices and supply should become more stable in the future. We also encourage and promote small scale local production, which can further help to reduce pellet prices and keep the market competitive.

Premium Wood Pellets and High Prices

To produce premium pellet fuels, only selected softwood and hardwood residues are used. Specifically these are pine, spruce and oak. The residue must be free from bark, and any contaminates such as paints and resins which might create dangerous emissions.

Wood Pellet Shortage And Price Changes

When the recent economic recession started to effect the housing market, less new homes were being constructed. With less construction, there was less timber processing. Thus there was also less sawdust available for fuel pellet production. This led to the price of sawdust increasing, and ultimately to the price of premium fuel pellets. Not only did the price increase, there simply wasn't enough pellets to meet market demand. Not only did this increase prices further as demand and supply were out of sink, but also many people struggled to get pellets at all. Two important lessons should be learnt from this. Firstly, the pellet market depends on premium pellets far too much, and must adopt producing lower grade wood pellets, and other biomass fuel pellets. However to do this the pellet stove and boiler market must produce more units to be able to burn these pellets without issue. 

The Price of Wood Pellets and Oil / Gas

As oil and gas prices continue to be unstable and continue the general trend of increasing prices, wood pellets appear as a more affordable option. However never expect the price of pellets to be far cheaper than oil and gas. The pellet market will always make sure they are a cheaper option, however they will also mirror the price rises of oil and gas as their production costs will increase and to also increase profits.

Pellet Price and Running The Pellet Stove

In terms of the cost of running your pellet stove each year, using only premium pellets at their high prices is obviously the most expensive option. For many people with older pellet stoves, this is their only option. Almost all early pellet stoves are built on the drop down burn pot design. This design is very limiting to the percentage of ash produced by the fuel, which essentially means only premium pellets can be used without complication. Some of the more modern pellet stove designs are more flexible, and can burn other fuel pellets. However by no means presume this is true, as many pellet stove manufactures still produce pellet stoves with drop down burn pot designs, for the simple fact they are much cheaper to produce. In the future there will be a much wider range of biomass fuel pellets, for instance made from hemp. We will also a new grade of fuel pellets called torrefied pellets. These are much more efficient and they contain double the amount of energy to normal wood fuel pellets.

The Wood Pellet Production Guide © PelHeat Ltd - Why Is The Wood Pellets Price So High?