Like every year at the end of February, over 500 experts from the field of biomass gathered in Wels, Austria, at the European Pellet Conference. Held in the context of the World Sustainable Energy Days, it is the largest annual pellet event in the world.

During the two-day conference, experts vigorously discussed policies, technologies, markets, innovation, finance and sustainability. A key topic was how to increase the market share for pellet heat. Experts from the European Biomass Association (AEBIOM) reported that the EU28 countries consume 18.8 million metric tons of pellets per year—of which almost half is used by the residential heating market. This percentage is due, among others, to automatic pellet central heating systems, which are succeeding in winning over market shares once owned by gas, oil and coal. 

The transition from traditional heating systems to automatic pellet heating technology can be achieved, as it has in a number of European countries. There are, incontestably, challenges out there, but those who understand the underlying forces at play and act strategically will be rewarded. Central pellet heating systems require a much larger volume of pellets than stoves; hence, increasing the number of such installations inevitably means an increase in the role of renewable energy sources in the heating market.  

Traditional wood stoves will continue to have a place in the heating landscape; however, they come up short regarding user convenience when compared to automatic pellet central heating systems. So why are these not yet being welcomed with open arms in many countries when heating systems are renewed? Is this once again an example of the well-known chicken and egg challenge of building supply and demand? There are potential users out there willing to invest and there is definitely technical know-how and sufficient manufacturers eager to sell their products. So what is missing?

In addition to higher investment costs for the heating appliances, in this case, it is also an issue of a "missing link.” Many markets worldwide still lack the connection between the chicken and the egg—the link on how to get the supply to the demand.

The widespread adoption of automatic pellet heating systems requires that a whole other value chain develops—a value chain based on the new user needs. A key element is bulk delivery of high-quality pellets. This can be achieved with pressurized trucks such as those already used for the delivery of animal feed in many European countries. Automatic pellet technologies have only limited compatibility with the bagged-pellet system.

The state of Upper Austria is often turned to for inspiration on how to develop a strong, local pellet market. Over the past 20 years, the state has seen automatic pellet and wood-chip systems become widespread heating technologies for both households and larger buildings. Today, Upper Austria has a leading position: Not only are more than 25 percent of all modern biomass boilers installed in Europe manufactured by local companies, but it also has one of the highest densities of small-scale automatic heating systems in the world. Over 50,000 automatic heating systems are already installed—more than half of which use pellets. Furthermore, more than one-third of the domestic heating demand is met by modern biomass heating. Stringent emission standards and cutting-edge technologies have contributed to the market development. As a result, biomass energy has emerged as an important economic driver for the state and the biomass heating industry employs more than 4,500 people.

It doesn’t happen overnight. Developing the automatic pellet heating market is a tough nut. However, there are rewards to be had for those who succeed in cracking it. In addition to playing a crucial role in achieving renewable energy goals and moving toward energy independence, increasing the adoption of pellet-fueled systems brings along investments in the renewable energy industry, opportunities for the domestic forest products industry, the creation of local and regional jobs, to name only a few.

To learn more, join our International Training Seminar on Biomass Heating - Market Development and Technologies, held from Sept. 12-15 in Linz, Austria. It offers insight into all aspects of the value chain through a dynamic mix of seminars, site visits and interactive exchanges (further information: office@esv.or.at). We warmly invite you to come see hands-on how the Upper Austrian biomass sector has developed and gain valuable knowledge on how to help move your own domestic market along.

Author: Christiane Egger
Deputy Manager OÖ Energiesparverband,
Manager Oekoenergie-Cluster
 (Energy Agency of Upper Austria)
Phone: +43 732 7720 14380
E-mail: christiane.egger@esv.or.at