‘Wood is competitive for heating purposes, the alternative being natural gas (at the retail price for residential heating) or fuel oil,’ says Zwier van Olst. ‘District heating is an excellent market for locally produced wood. Recently, we agreed on a long-term contract for district heating in Purmerend (in the Dutch province of North Holland); for at least ten years we will supply them with woody biomass for sustainable heat production. Using second generation technology, wood will become competitive for ethanol production, too.’
Zwier van Olst is the head of the Outdoor Affairs department of Staatsbosbeheer (SBB), a semi-governmental body, and the largest Dutch land owner. Just ten years ago, experts deemed it impossible to market competitively trimmings from local woods. But on the basis of a good planning and excellent logistics, SBB now acts successfully on the sustainable energy market.
A lot of experience
‘From 1999 onwards, SBB harvests wood for energy purposes from Dutch woods. We will deliver Just-In-Time to the biomass heat plant in Purmerend: we do not have an intermediate storage facility. But we have a lot of experience in that area. Every day, we have 50 lorries on the road for JIT-deliveries of spar to our customers. For us, biomass is just another kind of wood. On a yearly basis, we supply 400.000 m3 and 70.000 tons of biomass to our customers. That has become one of our core businesses.’
‘We direct wood transports. Many estate owners and managers joined this scheme. Our planners decide from which forests wood will be transported. There are many forms in which estate owners can participate. Some are completely independent, some entrust us with the entire task from harvest to transport.’
‘Heat production is an excellent market for locally produced wood. A project including electricity production would require subsidies in order to be cost-effective. For in that case, wood would have to compete against coal. But if wood is used for heat production, and the competitor is natural gas (at retail prices), then we have a sound business case. Likewise, when fuel oil is the competitor. In areas without a natural gas infrastructure (Southern Germany, Austria, large areas in Southern Europe), wood is in great demand. In Southern Germany, wood pellets now are short in supply.’
‘The district heating company in Purmerend contracted our wood at a relatively stable price. I.e. independent of oil and natural gas prices. We have added some indexation clauses: if our production price rises (inflation), the sales price will rise correspondingly. But that adds up to a price, much more stable than a price dependent on world oil prices. We can afford to do so because we own the biomass, we are no traders. Our core business is stewardship of woods and natural areas, not trade. Therefore, we profit from stable prices as well. In this respect, our interests and those of Purmerend’s district heating company run parallel.’
‘SBB has more ambitions with biomass, but we respect our natural boundaries. SBB is FSC-certified, which means that we harvest sustainably. Therefore the maximum yearly harvest of biomass from our lands is more or less fixed to the yearly natural accumulation.’
In short, on the basis of a good direction, encompassing an area including Belgium, Northrhineland-Westfalia, and Niedersachsen, locally produced wood has got a firm stronghold on the energy market.