ARTICLE IN PRESS

Biomass and Bioenergy 27 (2004) 671693

www.elsevier.com/locate/biombioe

Wood pellet production costs under Austrian and in

comparison to Swedish framework conditions
Gerold Theka,, Ingwald Obernbergera,b
a
Bios Bioenergiesysteme GmbH, Inffeldgasse 21B, A-8010 Graz, Austria
b
Graz University of Technology,Institute for Resource Efficient and Sustainable Systems, Inffeldgasse 21B, A-8010 Graz, Austria
Received 4 December 2002; received in revised form 8 July 2003; accepted 28 July 2003

Abstract

Owing to the rapidly increasing importance of pellets as high-quality biomass fuel in Austria and Europe within the
last years, many companies, mainly from the wood industry, are thinking of entering this market. The calculation of the
production costs before starting a pellet plant is essential for an economic operation. Based on comprehensive
investigations within the EU-ALTENER project An Integrated European Market for Densied Biomass Fuels
calculations of the pellet production costs loco factory for different framework conditions with basic data based on
already realised plants as well as a questionnaire survey of pellet producers in Austria, South Tyrol and Sweden have
been performed.
The production costs for wood pellets are mainly inuenced by the raw material costs and, in the case of using wet
raw materials, by the drying costs. Depending on the framework conditions these two parameters can contribute up to
one-third of the total pellet production costs. Other important parameters inuencing the pellet production costs are the
plant utilisation (number of shifts per week) as well as the availability of the plant. For an economic production of
wood pellets at least three shifts per day at 5 days per week are necessary. An optimum would be an operation at 7 days
per week. A low plant availability also leads to greatly increased pellet production costs. A plant availability of 8590%
should therefore be achieved.
The calculations show that a wood pellet production is possible both in small-scale (production rates of some
hundred tonnes per year) as well as in large-scale plants (some ten thousand tonnes per year). However, especially for
small-scale units it is very important to take care of the specic framework conditions of the producer, because the risk
of a non-economic pellet production is considerably higher than for large-scale systems.
The direct comparison of typical pellet production costs in Austria and Sweden showed the Swedish pellet production
costs to be considerably lower due to larger plant capacities, the combination of pellet production and biomass CHP or
biomass district heating plants and the implementation of technologies which allow an efcient heat recovery from the

Corresponding author. Tel.: +43-316-481300-63; fax: +43-316-481300-4.

E-mail address: thek@bios-bioenergy.at (G. Thek).

0961-9534/$ - see front matter r 2004 Elsevier Ltd. All rights reserved.
doi:10.1016/j.biombioe.2003.07.007
 ARTICLE IN PRESS

672 G. Thek, I. Obernberger / Biomass and Bioenergy 27 (2004) 671693

dryers. Moreover, another difference between the Austrian and the Swedish framework conditions is the price of
electricity, which is much lower in Sweden.
r 2004 Elsevier Ltd. All rights reserved.

Keywords: Pellets; Pelletisation; Production costs

1. Introduction and objectives 2. Methodology

Both the production and the demand for wood An economic evaluation of the steps of the
pellets in Austria as well as in several other manufacturing process was made using the full
European countries show currently a strong costing method based on the guideline VDI 2067
increase. Many companies, mainly from the wood [2]. According to this guideline, the different types
industry, which have appropriate raw materials of costs are divided into four cost groups. These
available for the production of wood pellets are are:
already active in this eld or are thinking of
entering this market. Moreover, companies, which

the costs based on capital (capital and main-
tenance costs),
would have to buy raw materials for the wood
pellet production and also companies with drying

the consumption costs,
capacities are interested in the market for wood

the operating costs
pellets. To start a pellet production plant it is

and other costs.
essential to calculate the pellet production costs in The costs based on capital consist of the annual
advance in order to consider and investigate capital and maintenance costs. The annuity
specic framework conditions of the producer for (annual capital costs) can be calculated by multi-
an economic operation. plying the capital recovery factor (CRF, see Eq.
Comprehensive investigations and calculations (1)) with the investment costs. The annual main-
of the production costs of wood pellets under tenance costs are calculated in per cent of the
consideration of all relevant parameters and for whole investment costs on the basis of guiding
different framework conditions have been per- values and are evenly spread over the years of the
formed within the EU-ALTENER project An utilisation period. The capital and maintenance
Integrated European Market for Densied costs are calculated for each unit of the overall
Biomass Fuels (INDEBIF) [1]. The calculations pelletisation plant, taking the different wear and
are based on data from planned and already utilisation periods into consideration. The total
realised pellet production plants. Furthermore, capital and maintenance costs can be calculated by
data obtained from a questionnaire survey addition of these subtotals:
of producers of wood pellets in Austria, South
1 in i
Tyrol and Sweden have been considered for the CRF 1
calculation of the production costs. Distribution 1 in  1
costs (by an own distribution system from the Explanations: CRF=capital recovery factor;
producer or by retailers) are not considered, i=calculated interest rate in %; n=utilisation
following the costs calculated are pellet production period in years
costs loco factory. No investment subsidies are considered for the
Further objectives of the work were the perfor- calculation of the pellet production costs. The
mance of sensitivity analyses of important cost interest rate considered is generally 7% p.a. (no
factors in the pellet production process as well as a difference between own and outside capital).
comparison of Austrian and Swedish pellet pro- All costs in connection with the manufacturing
duction costs. process, e.g. the costs for raw material, the heat for
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G. Thek, I. Obernberger / Biomass and Bioenergy 27 (2004) 671693 673

drying and the electricity demand are included in
The annual pellet production rate as well as the
the group of consumption costs. The operating water content and the bulk density of the pellets
costs comprise costs originating from the opera- produced.
tion of the plant, e.g. personnel costs. The other
Other costs.
costs include costs such as insurance rates, overall
dues, taxes and administration costs and are From these data both the total pellet production
calculated as a percentage of the overall invest- costs as well as the costs caused by each unit or
ment costs. These costs are calculated according to cost factor of the pelletisation process can be
already gained experiences from pellet production calculated.
plants in operation (data from engineering com-
panies, a questionnaire survey and discussions
with plant operators). 3. Results for Austria
The following parameters must be considered in
a detailed calculation of the pellet production costs: The total pelletisation process has been sepa-
rated into general investments, drying (if used),

The investment costs of all units of the pellet grinding, pelletisation, cooling, storage, peripheral
production process as well as of construction, equipment, personnel and raw material. A base
ofces and data processing, market introduction case scenario has been calculated, which is
and planning as well as the utilisation period compared with other Austrian scenarios (see later
and maintenance costs of all units and facilities. in this section) as well as with typical Swedish

The raw material costs as well as the water framework conditions (see Section 4). The frame-
content and the bulk density of the raw material work conditions for the calculation of this base
used. case scenario are shown in Table 1, the results are

The price for electricity, the electrical power shown in Table 2 and Fig. 1.
required for all electrical installations and a As shown in Fig. 1, the specic pellet production
simultaneity factor, which considers the fact costs are dominated by the consumption costs
that not all electrical installations operate on full (raw material, heat and electricity costs), followed
load at the same time. by the operating costs (personnel costs) and the

The interest rate. costs based on capital. The other costs are of

The equipment availability, which considers minor relevance.
both scheduled and unscheduled shutdowns. In addition, the pellet production costs of 11

In case a preceding dryer is installed at the start different case studies covering small as well as
of the process line, the specic heat costs and the large-scale applications have been calculated tak-
heat demand for drying, furthermore the reco- ing Austrian framework conditions into considera-
verable heat and the prot from heat sales in tion. The main differences in the framework
case that heat recovery takes place. conditions of the scenarios 16, which are based

The costs and the demand on bio-additives that on wet raw material and therefore making drying
may be used and the corresponding dosing necessary, compared to the base case scenario (see
system. Table 1) are shown in Table 3. All scenarios

If a conditioning unit working with steam is (except scenario 2) are based on a 7 days per week
used, the demand and the costs of the steam. and three shifts per day operation, which corre-

The storage costs, depending on the storage sponds to about 24,000 t of pellets produced per
capacity and the kind of storage system used year. Scenario 5 is an upscale of the base case
(storehouse and/or silo storage). scenario applying three pellet mills and three tube

The kind of shift work operated (plant utilisa- bundle dryers of the same capacity. Although one
tion). dryer with a higher capacity would be more

The personnel costs both in production, market- meaningful and cheaper, this case showed the
ing and administration. lowest specic pellet production costs of all
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674 G. Thek, I. Obernberger / Biomass and Bioenergy 27 (2004) 671693

Table 1
Framework conditions for the calculation of the pellet production costs for the base case scenario

Parameters Unit Value

General conditions
Price for electricity h/MWh 50.87
Interest rate % p.a. 7.00
Other costs % p.a. 0.50
Equipment availability % 90.00
Simultaneity factor (electrical installations) % 85.00
Utilisation period construction a 50.00
Service and maintenance costs construction % 1.00
Utilisation period ofce and data processing a 5.00
Service and maintenance costs ofce and data processing % 1.00
Utilisation period market introduction a 10.00
Raw material data
Raw material Sawdust
Water content wt% (w.b.) 55.00
Bulk density (d.b.) kg (d.b.)/m3 120.00
Raw material price h/m3 4.36
Drying data
Dryer type Tube bundle dryer
Specic heat costs (steam) h/MWh 21.80
Required electric power (including feeding) kW 77.50
Heat demand for drying (per ton vaporised water) kWh/tevaporated water 1000.00
Utilisation period a 15.00
Service and maintenance costs % 2.50
Grinding data
Grinding unit type Hammer mill
Required electric power kW 110.00
Utilisation period a 10.00
Service and maintenance costs % 18.00
Pellet mill data
Pellet mill type Ring die pellet mill
Required electric power kW 233.00
Steam consumption for conditioning per ton pellets produced wt% 4.00
Specic heat costs (steam) h/t 11.73
Bio-additive demand % 1.00
Costs for bio-additives h/tpellets 1.82
Utilisation period a 10.00
Service and maintenance costs % 10.00
Cooling data
Cooler type Counterow cooler
Required electric power kW 12.00
Utilisation period a 15.00
Service and maintenance costs % 2.00
Storage data
Kind of storage Silo storage
Utilisation period a 20.00
Service and maintenance costs % 1.50
Storage capacity (in % of the annual pellet production) % 7.61
Peripheral equipment data (conveying systems, intermediate storage, steel construction)
Required electric power kW 90.00
Utilisation period a 10.00
Service and maintenance costs % 2.00
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G. Thek, I. Obernberger / Biomass and Bioenergy 27 (2004) 671693 675

Table 1 (continued )

Parameters Unit Value

Pellets data
Pellet production rate t (w.b.)/h 3.00
Annual pellet production t (w.b.)/a 23,652.00
Water content pellets wt% (w.b.) 10.00
Bulk density pellets kg (w.b.)/m3 610.00
Diameter pellets mm 6.00
Retail price for pellets (exclusive of VAT) h/t (w.b.) 162.72
Kind of shift work
Shifts per day 3.00
Working days per week 7.00
Annual operating hours h p.a. 7884.00
Personnel data
Hourly rate h/h 21.80
Annual basis for personnel hours h p.a. 8760.00
Persons per shift 1.00
Persons for substitution per shift 0.25
Personnel for administration and marketing h/a 66,000.00

Explanations: wt%weight per cent; w.b.wet base; d.b.dry base; the retail price for pellets is an average price for the year 2002
based on information from pellet retailers; data source [13,5,9,10].

Table 2
Calculation of the pellet production costs for the base case scenario

Investment Capital Maintenance Consumption Operating Other Total Specic

costs costs costs costs costs costs costs costs
h h p.a. h p.a. h p.a. h p.a. h p.a. h p.a. h/tpellets

General investments 580,080 55,050 4,650 2,900 62,601 2.6

Drying 375,000 41,173 9,375 542,033 1,875 594,456 25.1
Grinding 84,000 11,960 15,120 37,499 420 64,999 2.7
Pelletisation 190,000 27,052 19,000 133,574 950 180,576 7.6
Cooling 13,000 1,427 260 4,091 65 5,843 0.2
Storage 291,000 27,468 4,365 10,251 1,455 43,540 1.8
Peripheral equipment 500,000 71,189 10,000 30,681 2,500 114,370 4.8
Personnel 304,710 304,710 12.9
Raw material 773,420 773,420 32.7

Total 2,033,080 235,319 62,770 1,531,550 304,710 10,165 2,144,514 90.7

Specic costs in h/tpellets 9.9 2.7 64.8 12.9 0.4 90.7

Explanations: data source [13,5,9,10].

scenarios compared. Another important difference case studies no drying unit is necessary. An
is the application of a belt dryer in scenario 3 and overview of the framework conditions for these
of a superheated steam dryer in scenario 4. The scenarios compared to the base case scenario (see
different drying technologies are discussed in Table 1) is shown in Table 4. The results indicate
Section 3.2 in more detail. that scenarios 10 and 11, which are characterised
In addition, ve scenarios, which are based on by comparatively low annual pellet production
dry raw material, have been calculated. For these rates show specic pellet production costs above
 ARTICLE IN PRESS

676 G. Thek, I. Obernberger / Biomass and Bioenergy 27 (2004) 671693

Fig. 1. Pellet production costs and their composition according to the guideline VDI 2067 for the base case scenario.
Explanations: specic pellet production costs loco factory 90.7 h/tpellets; the calculation is based on the framework conditions according
to Tables 1 and 2 (base case scenario); data source [1,3].

the limit for an economic operation (the upper tion costs, which represent on average about 75%
limit for pellet production costs in order to assure of the general investment costs.
an economically meaningful operation under The utilisation period and the maintenance costs
Austrian framework conditions can be assumed chosen for construction according to the guideline
to be about 110 h/tpellets at present (autumn 2002)). VDI 2067 are 50 years and 1% of the investment
These two scenarios point out the high risk of an costs per year, respectively. Investments in ofces
uneconomic pellet production for small-scale and data processing are calculated with a utilisa-
applications. If there are appropriate framework tion period of 5 years and maintenance costs of
conditions, however, even a small-scale pellet 1% of the investment costs per year. The utilisa-
production plant can be economic, which is shown tion period for market introduction has been
in scenario 7. Owing to the inefciency of calculated with 10 years (without maintenance
scenarios 10 and 11, they have not been taken costs).
into consideration for further comparisons shown Low general investment costs can be achieved
in this paper. by using existing infrastructure, whereas the
The results of all calculations (except scenarios erection of new infrastructure is linked with high
10 and 11) are summarised in Fig. 2. The different general investment costs. The inuence of the
units and cost factors of the pelletisation process general investments on the total pellet production
are discussed in the following chapters. costs is comparatively low.
The price for electricity in Austria depends on
3.1. General conditions the annual electricity consumption of a client and
amounts to about 95 h/MWh below 1.0 GWh/a, to
The general investments include investments for about 73 h/MWh between 1.0 and 1.5 GWh/a and
construction, ofces and data processing as well as to about 51 h/MWh above 1.5 GWh/a. Special
market introduction and planning. The general framework conditions can lead to electricity costs
investment costs considered in the calculations below these prices, e.g. if the operator of the pellet
range from about 3000 h for small-scale applica- production plant is also owner of a small hydro-
tions up to about 1.39 million h for large-scale power power plant. Such a case has been taken
applications and are mainly caused by construc- into consideration in scenario 7 (see Table 4).
Table 3

G. Thek, I. Obernberger / Biomass and Bioenergy 27 (2004) 671693

Main differences in the framework conditions of scenarios 16 compared to the base case scenario

Parameters Unit Scenario 1 Scenario 2 Scenario 3 Scenario 4 Scenario 5 Scenario 6

General conditions
Total electricity consumption GWh/a 3.59 2.27 4.05 3.75 9.08 3.63
Specic electricity consumption kWh/tpellets 151.87 134.58 171.42 158.67 128.02 153.57

ARTICLE IN PRESS
Total investment costs h 2,230,452.00 1,810,480.00 2,165,580.00 3,501,180.00 5,019,100.00 2,133,780.00
Drying data
Dryer type Tube bundle Tube bundle Belt dryer Superheated 3 tube bundle Tube bundle
dryer (A) dryer (C) steam dryer dryers (B) dryer (B)
Required electric power kW 94.00 75.00 160.00 115.00 232.50 97.00
Heat demand for drying kWh/tev.w. 1000.00 1000.00 1100.00 865.00 1000.00 1000.00
Pellet mill data
Pellet mill type Flat die Ring die Ring die Ring die 3 ring dies Ring die
Required electric power kW 250.00 233.00 233.00 233.00 699.00 233.00
Pellets data
Annual pellet production t (w.b.)/a 23,652.00 16,894.29 23,652.00 23,652.00 70,956.00 23,652.00
Specific pellet production costs h/tpellets 94.60 92.00 90.20 84.00 79.60 91.50

Explanations: w.b.wet base; A, B, Cdifferent dryer manufacturers; data source [1,59].

677
 678
Table 4
Main differences in the framework conditions of scenarios 711 compared to the base case scenario

Parameters Unit Scenario 7 Scenario 8 Scenario 9 Scenario 10 Scenario 11

General conditions
Price for electricity h/MWh 36.34 72.70 50.87 94.50 94.50
Total electricity consumption GWh/a 0.03 1.42 2.98 0.08 0.29
Specic electricity consumption kWh/tpellets 75.29 84.29 126.08 88.40 128.56
Total investment costs h 41,000.00 1,167,060.00 1,635,580.00 138,860.00 633,880.00

G. Thek, I. Obernberger / Biomass and Bioenergy 27 (2004) 671693

Raw material data
Raw material price h/m3 1.09 4.00 4.00 4.00 4.00
Grinding/sieving data
Grinding unit type No grinding unit Sieve Hammer mill No grinding unit Sieve
Required electric power kW 2.50 110.00 2.50
Utilisation period Years 15.00 10.00 15.00

ARTICLE IN PRESS
Service and maintenance costs % 10.00 18.00 10.00
Investment costs h 18,000.00 84,000.00 18,000.00
Pellet mill data
Pellet mill type Flat die Ring die Ring die Ring die Ring die
Required electric power kW 50.00 233.00 233.00 40.00 154.00
Cooling data
Cooler type No cooler Counterow cooler Counterow cooler No cooler No cooler
Storage data
Kind of storage Warehouse Silo/warehouse Silo Silo Silo/warehouse
Pellets data
Pellet production rate t (w.b.)/h 0.70 3.00 3.00 0.50 1.20
Annual pellet production t (w.b.)/a 430.70 16,894.29 23,652.00 938.57 2252.57
Kind of shift work
Shifts per day 1.00 3.00 3.00 1.00 1.00
Working days per week 1.48 5.00 7.00 5.00 5.00
Annual operating hours h p.a. 615.29 5631.43 7884.00 1877.14 1877.14
Personnel data
Hourly rate h/h 7.27 21.80 21.80 21.80 21.80
Persons per shift 1.00 1.00 1.00 1.00 1.00
Persons for substitution per shift 0.25 0.25 0.25 0.25
Personnel for administration and marketing h/a 3000.00 66,000.00 66,000.00 2600.00 7700.00
Specific pellet production costs h/tpellets 51.80 83.10 83.70 149.50 138.30

Explanations: w.b.wet base; data source [1,3,9].

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G. Thek, I. Obernberger / Biomass and Bioenergy 27 (2004) 671693 679

60
51.4
Share of the specific pellet
production costs [ /t pellets]
50

40
34.6

30
26.2
24.3

20 17.4
14.4
16.8
12.8 14.0
10 8.4 5.7
4.3 4.9
2.7
6.1 4.4
2.6 2.3 0.4 5.2
2.1
0.3
0 0.6 0.3 0.2 1.4 0.5
drying

cooling

storage
grinding

raw material
personnel
investments

equipment
pelletisation

peripheral
general

range average value

Fig. 2. Production costs caused by each step or cost factor of the pelletisation process.
Explanations: specic pellet production costs loco factory; the calculation is based on a total number of 10 pellet plants investigated;
variation of the production capacity between 430 and 79,000 t/a; variation of the annual full load operating hours between 615 and
8,000 h p.a.; data source [1,3].

Insurance rates, overall dues, taxes and admin- results show that the specic drying costs can vary
istration costs are summarised under other costs. between 16.85 and 26.16 h/tpellets. The specic
These costs are taken into consideration with an drying costs of tube bundle dryers and belt dryers
amount of 0.5% of the overall investment costs per are dominated by the consumption costs, because
year, which is a guiding value according to VDI of the high heat demand for drying the raw
2067 [2]. material. The consumption costs can be reduced
The equipment availability has been assumed to signicantly if a superheated steam dryer is applied
be 90% and the simultaneity factor for electricity (due to its heat recovering potential, see later in
demand (=electric power needed on average/ this section). Due to the high investment costs for
nominal electric power of all units  100) to be such dryers, the costs based on capital are higher
85%. Both gures remained unchanged for all than the consumption costs.
scenarios calculated and are based on experiences The possibility of using hot water instead of
of plant operators [1,9]. steam as heating medium in belt dryers leads to
slightly lower drying costs compared to tube
3.2. Drying bundle dryers in spite of higher investment costs
due to the cheaper heat price. Depending on the
For the calculation of the drying costs the most heating medium used, the specic heat costs
common technologies in Austria, tube bundle considered vary between 18.0 (hot water, 90 1C)
dryer and belt dryer, have been considered. and 21.8 h/MWh (saturated steam, 16 bar, 201 1C;
Furthermore, the possibility of the use of a superheated steam, 0.52 bar, 170200 1C).
uidised bed dryer operated with superheated Depending on the drying system used and the
steam (superheated steam dryer) has been investi- size of the plant, the investment costs considered
gated. A comparison of different types of tube for the dryers vary between 360,000 (tube bundle
bundle dryers as well as a belt and a superheated dryer) and almost 1.5 million h (superheated steam
steam dryer is shown in Table 5 and Fig. 3. The dryer). The utilisation period for all drying systems
 680
Table 5
Calculation of the drying costs for different drying systems

Related scenario in Table 3 1 2 Base case scenario 6 5 3 4

Dryer type Tube bundle Tube bundle Tube bundle Tube bundle 3 tube bundle Belt dryer Superheated
dryer (A) dryer (C) dryer (B) dryer (B) dryers (B) steam dryer
Heating medium Saturated Saturated Saturated High Saturated Hot water, Superheated

G. Thek, I. Obernberger / Biomass and Bioenergy 27 (2004) 671693

steam, steam, steam, temperature steam, 901C steam, 0.52 bar
app. 15 bar app. 15 bar app. 15 bar water, 1851C app. 15 bar

Water evaporation rate t/h 3.00 3.00 3.00 3.00 9.00 3.00 3.00
Specic heat costs h/MWh 21.80 21.80 21.80 21.80 21.80 21.80 21.80
Prot heat-selling h/MWh 20.00

ARTICLE IN PRESS
Required electric power (including feeding) kW 94.00 75.00 77.50 97.00 232.50 160.00 115.00
Heat demand for drying kWh/tev.w 1000.00 1000.00 1000.00 1000.00 1000.00 1000.00 1000.00
Recoverable heat % 80.00
Utilisation period years 15.00 15.00 15.00 15.00 15.00 15.00 15.00
Service and maintenance costs % 2.50 2.50 2.50 2.50 2.50 2.50 2.50
Investment costs h 509,000.00 360,000.00 375,000.00 470,000.00 1,125,000.00 500,000.00 1,460,000.00
Capital costs h p.a. 55,885.46 39,526.06 41,172.98 51,603.47 123,518.95 54,897.31 160,300.15
Maintenance costs h p.a. 12,725.00 9000.00 9375.00 11,750.00 28,125.00 12,500.00 73,000.00
Costs based on capital h p.a. 68,610.46 48,526.06 50,547.98 63,353.47 151,643.95 67,397.31 233,300.15
Specic costs based on capital h/tpellets 2.90 2.87 2.14 2.68 2.14 2.85 9.86
Electricity costs h p.a. 32,044.62 18,262.51 26,419.77 33,067.32 79,259.30 54,544.03 39,203.53
Heat costs h p.a. 515,613.60 368,295.43 515,613.60 515,613.60 1,546,840.80 468,309.60 118,662.08
Consumption costs h p.a. 547,658.22 386,557.94 542.033.37 548,680.92 1,626,100.10 522,853.63 157,865.61
Specic consumption costs h/tpellets 23.15 22.88 22.92 23.20 22.92 22.11 6.67
Other costs h p.a. 2545.00 1800.00 1875.00 2350.00 5625.00 2500.00 7300.00
Specic other costs h/tpellets 0.11 0.11 0.08 0.10 0.08 0.11 0.31
Total drying costs h p.a. 618,813.68 436,884.01 594,456.35 614,384.39 1,783,369.05 592,750.95 398,465.76
Total specic drying costs h/tpellets 26.16 25.86 25.13 25.98 25.13 25.06 16.85

Explanations: ev.w.yevaporated water; A, B, Cydifferent dryer manufacturers; data source [1,59].

 ARTICLE IN PRESS

G. Thek, I. Obernberger / Biomass and Bioenergy 27 (2004) 671693 681

30

25
Specific drying costs [ /tpellets]

20

15

10

0
tube bundle tube bundle tube bundle tube bundle 3 tube bundle belt dryer superheated
dryer (A) dryer (C) dryer (B) dryer (B) dryers (B) steam dryer

consumption costs costs based on capital other costs

Fig. 3. Drying costs of different drying systems and their composition according to the guideline VDI 2067.
Explanations: calculation of the specic drying costs according to Table 5; data source [1,59].

has been chosen with 15 years. The maintenance utilised. The advantage of superheated steam
costs considered are between 2.5 (tube bundle dryers is even more signicant for large-scale
dryer and belt dryer) and 5.0% (superheated steam applications with annual pellet production rates
dryer) of the investment costs per year (both of about 70,000 t/a and more, which are common
gures based on experiences of pellet production in Sweden.
plant operators [1,12,9]). The heat demand for The share of the drying costs on the total pellet
drying varies between 865 (superheated steam production costs is substantial. The lowest drying
dryer) and 1100 kWh (belt dryer) per tonne costs can be achieved if the heat needed for drying
evaporated water, depending on the system used is produced internally by using residues available
and based on information from several dryer in the company (e.g. by bark combustion in a
manufacturers [58]. biomass heating plant or a biomass CHP plant).
The investment costs for a superheated steam
dryer are signicantly higher compared than those 3.3. Grinding
for tube bundle or belt dryers (based on a similar
capacity). The main advantage of such a dryer is The grinding units used are usually hammer
the high potential of heat recovery given. Surplus mills. If a very homogeneous raw material is
steam from the evaporation of water is extracted available, a sieving machine could be used instead
from the system and can be used for another of a grinding unit. The ne fraction could directly
process as a heating source (e.g. for hot water be used in the pellet mill. The coarse fraction could
production in district or process heating net- be fed into a smaller dimensioned grinding unit or
works). By this means energy recovery in the used as fuel, if a biomass combustion plant is
order of 8090% of the heat input into the dryer is available. Many pellet producers, however, have a
possible [6]. In spite of the signicantly higher hammer mill in operation for homogenisation
investment costs of a superheated steam dryer, this purposes, even if they use only sawdust as raw
results in specic drying costs below the ones of material.
tube bundle dryers and belt dryers of the same The investment costs considered for grinding
capacity (annual pellet production of about units range between 62,000 h (hammer mill with a
24,000 t), provided that the recovered heat can be capacity of about 2.53 t (d.b.)/h) and 168,000 h
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682 G. Thek, I. Obernberger / Biomass and Bioenergy 27 (2004) 671693

(2 larger hammer mills with a total capacity of case scenario (see Tables 1 and 2) has been
about 9 t (d.b.)/h), depending on the plant size and calculated with maintenance costs of 10% of the
the equipment used. The maintenance costs of investment costs per year and a utilisation period
hammer mills are relatively high with 18% of the of 10 years. Biological additives are, if any, usually
investment costs per year. The utilisation period added in an amount of about 1 wt% of the pellet
chosen for all scenarios shown in the Tables 1, 3 mass and are therefore of minor importance for
and 4 for hammer mills according to information the total pellet production costs. Moreover, the
from manufacturers is 10 years. Two cases have costs for steam conditioning (if applied) are of
been calculated with a sieving machine with minor relevance concerning the total pellet pro-
investment costs of 18,000 h, an utilisation period duction costs.
of 15 years and maintenance costs of 10% of the The pelletisation itself is one of the main cost
investment costs per year (see Table 4). factors of the overall pelletisation process (besides
The grinding unit is the second largest electricity drying, personnel and raw material). The main
consumer in the pelletisation process (behind the cost factor of the pelletisation step itself is the
pellet mill). However, the inuence of the grinding electricity consumption, followed by the invest-
costs on the total pellet production costs is ment costs.
comparatively low.
3.5. Cooling
3.4. Pelletisation
The coolers commonly used are counterow
The costs for pelletisation itself also include coolers. For very small pellet mills with low
costs for steam conditioning and biological ad- throughputs a subsequent cooler is optional. The
ditives, if such media are used. Two main investment costs considered in the different cases
technologies are available for pelletisation, i.e. shown in the Tables 14 vary between zero (no
ring die and at die pellet mills. Most of the pellets cooler) and 26,000 h, depending on the plant size
produced in Austria are produced with ring die and the equipment used (13,000 h for a counter-
pellet mills. These pellet mills usually show slightly ow cooler with a capacity of about 5 t (w.b.)/h;
lower investment costs. Furthermore, based on twice as much for a capacity of about 10 t (w.b.)/
experiences of several Austrian pellet producers, h). The chosen utilisation period of 15 years and
ring die pellet mills show a higher equipment maintenance costs of about 2.0% of the invest-
availability. Comparatively high pellet production ment costs per year are based on information from
costs result from pellet mills with low throughputs. operators of pellet production plants.
The investment costs taken into consideration The costs for cooling are small and not relevant
for pellet mills range from about 18,000 h for a for the total pellet production costs.
micro-scale application (special framework condi-
tions of the producer; production capacity 700 kg 3.6. Storage
(w.b.)/h) to about 570,000 h for a large-scale
application using 3 pellet mills (total production Storage costs are greatly inuenced by the
capacity 9 t (w.b.)/h). Taking these pellet produc- storage capacity and the kind of storage chosen.
tion capacities and the different annual operating The storage capacity of most Austrian pellet
hours into consideration, annual pellet production producers is less than 10% of the annual pellet
rates between 430 and 71,000 t/a result, which are production capacity [1], the most widely used
considered in the economic calculations. storage systems are silos. Warehouses are used
Owing to the wear of rollers and dies, the only by a few smaller pellet producers.
maintenance costs are relatively high and amount The variation of investment costs for storage
to about 1016% of the investment costs per year. systems is between 20,000 h (warehouse for a
The utilisation period of pellet mills is usually small-scale producer with a storage capacity of
assumed to be between 10 and 15 years. The base about 120 t) and 742,000 h (silo storage for a
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G. Thek, I. Obernberger / Biomass and Bioenergy 27 (2004) 671693 683

large-scale producer with a storage capacity of installed. In addition to the personnel needed per
about 5400 t), depending on the plant size, the shift, a quarter person has been calculated for
storage capacity and the storage system used. The substitution. Additional personnel would be
utilisation period has been chosen with 20 years needed, if a manually operated packing unit were
for silo storage systems and with 50 years for used. However, packed pellets are not very
warehouses with maintenance costs of 1.0% for common in Austria and are either packed with
warehouses and 1.5% of the investment costs for fully automatic packing units or cover only a small
silos. Owing to the fact that the most common part of the overall pellet production and are
pellet storage system applied in Austria is silo therefore manually packed. Packing can be con-
storage, it has been considered for almost all trolled by the person also responsible for the
scenarios calculated. For specic cases, usually pelletisation process. Due to the minor relevance
small-scale pellet production units, warehouses of packed pellets in Austria, packing has not been
have been taken into consideration instead of silo taken into consideration as an extra cost factor.
storage. The kind of shift work chosen for the base case
In spite of quite high investment costs for the scenario (see Table 1) and for several other
storage system in several cases, the inuence of the scenarios (see Tables 3 and 4) is 7 working days
storage costs on the total pellet production costs is per week with 3 shifts per day. Taking the
relatively low. equipment availability of 90% into consideration,
this results in almost 7900 operating hours per
3.7. Peripheral equipment year. Some Austrian pellet producers already
apply this operation mode; some intend to
Peripheral equipment includes the costs of introduce this operation mode in the near future.
investments and electrical power required for Another operation mode applied by Austrian
motors of feeding screws, the sieving machine, pellet producers is to work at 5 days per week
fans, cell air locks, etc. The utilisation period of with 3 shifts per day (about 5600 annual operating
these systems has been chosen with 10 years, the hours), which has been considered in scenarios 2
maintenance costs with 2.0% of the investment and 8 (see Tables 3 and 4). The small-scale
costs per year. The investment costs of peripheral application calculated in scenario 7 (see Table 4)
equipment can be about 15,000 h for small-scale is in operation for about 615 h per year (operation
applications (and even lower in specic cases) and according to the availability of the raw material
can reach 1.0 million h for large-scale applications. from the own wood working industry).
The inuence of the costs caused by peripheral The requirement for personnel in marketing and
equipment on the total pellet production costs is administration depends on the sales strategy of the
low. producer and can range from a person covering
this job part time (which is possible if the pellets
3.8. Personnel from small-scale producers are sold to wholesalers,
especially if long-term contracts for delivery exist)
Personnel costs include both costs for personnel up to 4 persons active in marketing and adminis-
in the production as well as in marketing and tration in case of large-scale producers with an
administration. In the production usually one own marketing and distribution system. All
person is needed for the whole pelletisation plant scenarios calculated are based on 2 persons active
per shift (both for small-scale and large-scale in this eld (except scenario 7 where a part time
applications). Small-scale applications usually are job has been considered).
not equipped with process control technologies, The costs for personnel in the production
which make a fully automatic operation possible. process have been calculated on the basis of a
Large-scale applications need one person to hourly rate of 21.8 h (including all costs like salary,
control the process, even if there is an appropriate taxes, etc.). For the base case scenario 10,950
control technology for a fully automatic operation annual working hours are needed (1 person per
 ARTICLE IN PRESS

684 G. Thek, I. Obernberger / Biomass and Bioenergy 27 (2004) 671693

shift, a quarter person for substitution per shift, 3 loco pellet producer including transportation
shifts per day, 7 working days per week). This costs). However, the raw material prices can vary
demand can be covered by 6.25 persons (1752 h in a broad range according to local and national
per year) and leads to annual personnel costs of side constraints and therefore the specic frame-
238.710 h in the production. Special framework work conditions must be taken into consideration
conditions can lead to personnel costs clearly carefully on a case-by-case basis. The price for wet
below this rate. One case (scenario 7) has been sawdust loco pellet producer can vary between
investigated, where personnel are available for an 4.30 and 8.10 h/m3 and for dry wood shavings
hourly rate of about 7.3 h. However, this specic between 2.84 and 4.65 h/m3 [3,9]. Special frame-
producer is a micro-scale pellet producer and work conditions can lead to prices even below
therefore such a low hourly rate cannot be these prices. Such a case has been taken into
generalised. The costs for personnel in marketing consideration in scenario 7, which is shown in
and administration is based on annual costs per Table 4. In this case, a small wood working
employee of 33,000 h (including all costs like industry has no possibility to use their own
salary, taxes, etc.). Taking Austrian framework residues (wood shavings). Due to the small
conditions into consideration, pellets are usually a amount of wood shavings available it is difcult
by-product (from sawmills, wood processing to sell them and therefore the price that can be
industry, etc.). Management costs have therefore achieved amounts to only about 1.09 h/m3. Due to
not been taken into consideration. the high quality of pellets and an already
Personnel costs are a cost factor of medium established market for pellets, the upgrade of the
importance in pellet production. wood shavings to wood pellets leads to a
considerable added value.
3.9. Raw material Transport costs are included in the prices stated
above and amount to about 1.49 h/km (based on
Finally, the raw material costs represent a an ordinary truck with a transport capacity of
substantial cost factor in the calculation of the 95 m3) [10]. Taking an average transport distance
total pellet production costs. The most important of about 50 km into consideration, the transport
inuencing variable in this context is, whether the costs amount to about 0.80 h/m3, both for wet
raw material used is dry or wet. Dry raw materials sawdust and for dry wood shavings. In general, the
are usually more expensive than wet raw materials. raw material prices show an increasing trend due
However, due to the fact that the pelletisation of to the general increase of thermal biomass utilisa-
dry raw materials does not require drying equip- tion in Austria.
ment, the total pellet production costs can be
reduced signicantly by using dry raw materials. 3.10. Evaluation and sensitivity analyses
Wet sawdust with a water content of 55.0 wt%
(w.b.) and a bulk density of 267 kg (w.b.)/m3 An overview of the average composition of the
formed the basis for the calculations of the base total pellet production costs both for dry and wet
case scenario and of the scenarios shown in Table raw material is shown in Fig. 4. The main shares of
3. Scenarios 711, which are shown in Table 4, are the pellet production costs are the costs for raw
based on dry wood shavings as raw material with a material and for drying, if wet raw material is
water content of 10 wt% (w.b.) and a bulk density used. These costs can cover up to two thirds of the
of 78 kg (w.b.)/m3. total pellet production costs. The pellet production
The raw material prices loco pellet producer costs from dry raw material are dominated by the
taken into consideration are 4.36 h/m3 (or 36 h/t costs for the raw material.
(d.b.)) for wet sawdust and 4.0 h/m3 (or 57 h/t Fig. 5 gives an overview of the inuence of
(d.b.)) for dry wood shavings. The prices indicate different parameters on the total pellet production
representative average prices for the year 2001 costs. The specic pellet production costs are
under Austrian side constraints (softwood, prices mainly inuenced by the pellet throughput, the
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G. Thek, I. Obernberger / Biomass and Bioenergy 27 (2004) 671693 685

Fig. 4. Share of the different cost factors of a pellet plant among the total production costs considering wet and dry raw material.
Explanations: the calculation is based on a total number of 10 pellet plants investigated (seven plants using wet raw material, three
plants using dry raw material); variation of the production capacity between 430 and 79,000 t/a; variation of the annual full load
operating hours between 615 and 8,000 h p.a.; plant availability 90%; production costs loco factory vary between 79.6 and 94.6 h/tpellets
on average for wet raw material and between 51.8 and 83.7 h/tpellets for dry raw material; data source [1,3].
Change of the specific pellet

5
production costs [%]

4
3
2
1
0
-1
-2
-3
-4
equipment availability

heat demand for drying

operating hours

raw material costs

pellet throughput

personnel for marketing and

service and maintenance costs

personnel requirement per shift

investment costs
utilisation period

steam consumption for

interest rate

price for electricity

simultaneity factor (electrical

specific heat costs

conditioning

administration

installations)

scenario - 10 % scenario + 10 %

Fig. 5. Inuence of different parameters on the total pellet production costs.

Explanations: the calculation is based on the framework conditions according to Tables 1 and 2 (base case scenario); sensitivity
analysis performed by varying each parameter one by one by plus or minus 10%; data source [1,3].

equipment availability, the annual operating other hand, a low throughput (e.g. caused by a raw
hours, the specic heat costs, the heat demand material which is too dry) leads to increased pellet
for drying and the raw material costs. production costs.
The pellet throughput can e.g. be increased by Plant availability (as a percentage of the
using appropriate bio-additives (e.g. maize or rye theoretically possible annual full load operating
our), which act as a lubricant in the pellet mill. As hours) and plant utilisation (number of shifts per
it is shown in Fig. 6 this is a good possibility to week, see Fig. 7) are further important inuencing
decrease the total pellet production costs. On the factors on the total pellet production costs. Based
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686 G. Thek, I. Obernberger / Biomass and Bioenergy 27 (2004) 671693

110

Specific pellet production costs

105

100
[ /t pellets]

95

90.7
90

85

80
2 2.2 2.4 2.6 2.8 3 3.2 3.4 3.6 3.8

Pellet production rate [tpellets/h]

base case scenario

Fig. 6. Dependency of the total pellet production costs on the production rate.
Explanations: the calculation is based on the framework conditions according to Tables 1 and 2 (base case scenario); variation of the
pellet production rate starting from 2.1 to 3.6 t/pellets/h; specic pellet production costs loco factory; data source [1,3].

150
143
Specific pellet production costs

140

130
[/tpellets]

120

110 109

97
100

91
90

80
1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000

Full load operating hours [h p.a.]

3 shifts per day, 7 days per week 3 shifts per day, 5 days per week
2 shifts per day, 5 days per week 1 shift per day, 5 days per week

Fig. 7. Dependency of the total pellet production costs on the annual full load operating hours.
Explanations: the calculation is based on the framework conditions according to Tables 1 and 2 (base case scenario); variation of the
annual full load operation hours between 7,884 and 1,877 h p.a.; specic pellet production costs loco factory; data source [1,3].

on the results shown in Fig. 7, the pellet material, it is not meaningful to operate the plant
production will become uneconomic (total pellet only one or two shifts per day, because a daily
production costs of more than 110 h/tpellets) below start-up and shut-down of the dryer cannot be
about 3500 annual full load operating hours, recommended. Therefore, at least three shifts per
depending on the specic framework conditions day at 5 days per week are recommended for an
of the producer, however. Due to the fact that the economic production of wood pellets. The opti-
scenario shown in Fig. 7 is based on wet raw mum would be a 7-day per week operation.
 ARTICLE IN PRESS

G. Thek, I. Obernberger / Biomass and Bioenergy 27 (2004) 671693 687

A low plant availability leads to a similar effect. vary in a broad range, depending on the specic
Based on the base case scenario a plant availability framework conditions given at a site.
of at least 52% should be achieved for an A strong inuence on the total pellet production
economic operation of the plant. However, a plant costs is also given by the heat demand for drying.
availability of 8590% can usually be achieved by However, the possibilities to inuence the heat
pellet producers and should therefore be the aim demand for drying are conned to the choice of
for an economic pellet production. the drying technology, because if once a dryer has
An important question in this context is the been chosen there is no more possibility to
needed production rate for an economic use of inuence the heat demand.
dryers in a pellet production process. The specic The dependency of the total pellet production
investment costs for dryers and therefore the total costs on the raw material price (wet sawdust) is
pellet production costs show a strong increase with shown in Fig. 10. Considering the possible
decreasing water evaporation capacity (see Fig. 8). variation of the raw material price from
Based on several calculations made for different 4.308.10 h/m3, the resulting pellet production
drying technologies and plant capacities, the lower costs vary between 90.2 and 118.7 h/tpellets. Thus,
limit for an economic use of a dryer in a pellet it becomes obvious that the economy of a pellet
production process (total pellet production costs production plant is strongly dependent on the raw
of 110 h/tpellets or more) lies between 12,000 and material price. In the scenario shown in Fig. 10,
15,000 t of pellet production per year (depending the upper limit for an economic pellet production
on the technology used and the kind of shift will be exceeded if the raw material price is 6.94 h/
work). The use of dryers in small-scale pellet m3 or more.
production plants can therefore not be recom-
mended.
The inuence of the specic heat costs on the 4. Comparison of the pellet production costs under
total pellet production costs is shown in Fig. 9. typical Austrian and Swedish framework conditions
They have been assumed to be 21.80 h/MWh for
the base case scenario (related to the energy A comparison of the pellet production costs in
content of the steam). This price can be achieved Austria and Sweden has also been carried out
under Austrian framework conditions but it may within this project. The method used for the

900
Specific investment costs [/kgWE]

800

700

600

500

400

300

200

100
0 500 1,000 1,500 2,000 2,500 3,000 3,500

Water evaporation capacity [kg/h]

Fig. 8. Dependency of the specic investment costs of belt dryers on the water evaporation capacity.
Explanations: WEywater evaporated; data source [7].
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688 G. Thek, I. Obernberger / Biomass and Bioenergy 27 (2004) 671693

105

Specific pellet production costs 100

95
[ /t pellets]

90

85

80

75
10 15 20 25 30 35

Specific heat costs [ /kWh]

base case scenario

Fig. 9. Dependency of the total pellet production costs on the specic heat costs.
Explanations: the calculation is based on the framework conditions according to Tables 1 and 2 (base case scenario); variation of the
specic heat costs between 10 and 35 h/kWh; specic pellet production costs loco factory; data source [1,3].

130
Specific pellet production costs

118.7
120

110
[ /t pellets]

100

90.7
90
90.2

80

70

60
1 2 3 4 5 6 7 8 9
3
Raw material price [ /m ]
lower price limit realistic raw material price upper price limit

Fig. 10. Dependency of the total pellet production costs on the raw material price.
Explanations: the calculation is based on the framework conditions according to Tables 1 and 2 (base case scenario); variation of the
raw material price between 1.0 and 9.0 h/m3; sawdust; water content 55 wt% (w.b.); bulk density 267 kg (w.b.)/m3; specic pellet
production costs loco factory; data source [1,3].

calculation of the pellet production costs in calculations are shown in Table 6, all other
Sweden was the same as that used for Austria. parameters are similar (see Table 1). The
The differences regarding general framework calculation of the specic pellet production costs
conditions between the Austrian and Swedish under Swedish framework conditions is shown in
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G. Thek, I. Obernberger / Biomass and Bioenergy 27 (2004) 671693 689

Table 6
Main differences of the general framework conditions between Austria and Sweden for the calculation of pellet production costs

Parameters Unit Austria Sweden

General conditions
Price for electricity h/MWh 50.87 27.10
Total electricity Consumption GWh/a 3.50 10.98
Specic electricity consumption kWh/tpellets 148.04 137.70
Equipment availability % 90.00 91.00
Investment costs construction h 436,000.00 870,000.00
Investment costs data processing h 29,000.00 100,000.00
Service and maintenance costs market introduction % 3.00
Total investment costs h 2,033,080.00 5,933,750.00
Raw material data
Raw material Sawdust Sawdust
Water content wt% (w.b.) 55.00 57.00
Bulk density (d.b.) kg (d.b.)/m3 120.00 150.00
Raw material price h/m3 4.36 5.10
Drying data
Dryer type Tube bundle dryer Drum dryer
Specic heat costs h/MWh 21.80 17.95
Prot from heat sale h/MWh 21.70
Required electric Power (including feeding) KW 77.50 350.00
Heat demand for drying kWh/tev.w. 1000.00 861.00
Recoverable heat % 50.00
Specic heat consumption kWh/tpellets 1021.52 504.02
Utilisation period A 15.00 10.00
Investment costs h 375,000.00 2,400,000.00
Grinding/sieving data
Grinding unit type Hammer mill Hammer mill
Required electric power kW 110.00 350.00
Investment costs h 84,000.00 360,000.00
Pellet mill data
Pellet mill type Ring die Ring die
Required electric power kW 233.00 750.00
Steam consumption for conditioning per ton pellets produced wt% 4.00 2.50
Specic heat costs (steam) h/t 11.73 9.66
Bio-additive demand % 1.00
Costs for bio-additives h/tpellets 1.82
Service and Maintenance costs % 10.00 13.00
Investment costs h 190,000.00 600,000.00
Cooling data
Cooler type Counterow cooler Counterow cooler
Required electric power kW 12.00 50.00
Investment costs h 13,000.00 240,000.00
Storage data
Kind of storage Silo Warehouse
Utilisation period a 20.00 50.00
Service and maintenance costs % 1.50 2.50
Investment costs h 291,000.00 870,000.00
Storage capacity (in % of the annual pellet production) % 7.61 36.00
Retail price for pellets (exclusive of VAT) h/t (w.b.) 162.72 143.50
Peripheral equipment data (conveying systems, intermediate storage, steel construction)
Required electric power kW 90.00 120.00
Investment costs h 500,000.00 435,000.00
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690 G. Thek, I. Obernberger / Biomass and Bioenergy 27 (2004) 671693

Table 6 (continued )

Parameters Unit Austria Sweden

Pellets data
Pellet production rate t (w.b.)/h 3.00 10.00
Annual pellet production t (w.b.)/a 23,652.00 79,716.00
Water content pellets wt% (w.b.) 10.00 8.00
Bulk density pellets kg (w.b.)/m3 610.00 585.00
Diameter pellets mm 6.00 8.00
King of shift work
Annual operating hours h p.a. 7884.00 7971.60
Personnel data
Hourly rate h/h 21.80 15.70
Persons per shift 1.00 2.30
Persons for substitution per shift 0.25 0.10
Personnel for administration and marketing h/a 66,000.00 110,000.00

Explanations: wt%weight per cent; w.b.wet base; d.b.dry base; ev.w.evaporated water; data source [1,35,9].

Table 7
Calculation of the pellet production costs under Swedish framework conditions

Costs based Consumption Operating Other Total costs Specic

on capital costs costs costs h p.a. costs
h p.a. h p.a. h p.a. h p.a. h/tpellets

General investments 107,256 5,144 112,400 1.4

Drying 401,706 619,578 12,000 1,033,284 13.0
Grinding 116,056 64,269 1,800 182,125 2.3
Pelletisation 163,427 156,971 3,000 323,397 4.1
Cooling 31,151 9,181 1,200 41,532 0.5
Storage 84,790 144,134 4,350 233,275 2.9
Peripheral equipment 70,634 22,035 2,175 94,844 1.2
Personnel 457,956 457,956 5.7
Raw material 2,493,516 2,493,516 31.3
Total 975,020 3,509,685 457,956 29,669 4,972,330 62.4
Specic costs in h/tpellets 12.2 44.0 5.7 0.4 62.4

Table 7. The most important differences in the generally low level of electricity prices in
framework conditions are discussed below. Sweden and on the other hand from the
The production rates for Austria and Sweden considerably larger total electricity consumption
have been chosen on the basis of the typical and of about 11.0 GWh/a due to the higher plant
most important situations pertaining to pellet capacity.
production in these countries. These production The investment costs for the drying systems are
rates result in an annual pellet production of about totally different for the Austrian and the Swedish
24,000 t of pellets in Austria and about 80,000 t of case. In the calculation of pellet production costs
pellets in Sweden. in Austria a dryer (in this specic case a tube
The price of electricity in Sweden amounts to bundle dryer) has been considered. In Sweden, the
only about 50% of the Austrian price. This big erection of a new pellet production plant is usually
difference results on the one hand from the combined with the erection of a new biomass CHP
 ARTICLE IN PRESS

G. Thek, I. Obernberger / Biomass and Bioenergy 27 (2004) 671693 691

plant or a biomass district heating plant. The heat of the CHP or the biomass district heating plant
produced from the plant is used for the dryer, are included in the heat price.
usually a directly heated drum dryer (direct The total investment costs are higher in the
utilisation of the hot ue gas from the combustion Swedish case, resulting not only from the drying
chamber in the dryer). The wet and cooled ue gas system but also from the larger equipment needed
leaving the drum dryer passes through a gas due to the higher capacity of the plant.
cleaning and heat recovering system (e.g. cyclones, The specic electricity consumption in the
ue gas condensation units). By this means about Swedish case is considered to be about 7% lower
50% of the heat needed for drying the raw due to the higher plant capacity. Furthermore, the
material can be recovered and utilised as district specic heat demand for drying is about half of
heat. An example for such a drying system is that required in Austria due to the fact that about
described by Mared [11]. 50% of the heat needed for drying can be
Owing to this combination of a pellet produc- recovered (as described above).
tion plant with a biomass CHP plant or a biomass The direct comparison of typical pellet produc-
district heating plant, the investment costs for the tion costs in Austria and Sweden (see Figs. 11 and
drying system in the Swedish case cover both the 12) shows the Swedish pellet production costs to
investment of the dryer as well as the propor- be considerably lower. As shown in Fig. 11, this is
tionate investment of the biomass CHP plant or mainly due to the fact that heat from the dryer can
the biomass district heating plant (the part of the be recovered and used in a district heating
biomass CHP plant or biomass district heating network. Therefore, the Swedish drying costs
plant utilised for the drying process). This means, amount to only about half the Austrian drying
that the capital costs and the other costs related to costs. Furthermore, the larger plant capacity
the heat production are directly considered (in the inuences all cost factors shown in Fig. 11 (except
total capital costs of the pellet production plant). the specic raw material costs) and there-
Therefore, the specic heat costs are lower, fore contributes substantially to the decreased
because only the operating and consumption costs pellet production costs. Moreover, a difference

Fig. 11. Comparison of average pellet production costs in Austria and Sweden as well as their composition according to the steps and
cost factors of the pellet production process.
Explanations: the Austrian calculation is based on the framework conditions according to Tables 1 and 2 (base case scenario);
differences of the general framework conditions between Austria and Sweden for the calculation of pellet production costs are shown
in Table 6; calculation of the pellet production costs under Swedish framework conditions according to Table 7; data source [1,3,4].
 ARTICLE IN PRESS

692 G. Thek, I. Obernberger / Biomass and Bioenergy 27 (2004) 671693

Fig. 12. Comparison of average pellet production costs in Austria and Sweden as well as their composition according to the guideline
VDI 2067.
Explanations: the Austrian calculation is based on the framework conditions according to Tables 1 and 2 (base case scenario);
differences of the general framework conditions between Austria and Sweden for the calculation of pellet production costs are shown
in Table 6; calculation of the pellet production costs under Swedish framework conditions according to Table 7; data source [1,3,4].

between Austria and Sweden is the price of effects regarding personnel in larger plants) and
electricity, which is much lower in Sweden. The the lower price for electricity in the Swedish case.
specic electricity costs in Sweden amount to only Thus, pellet production costs in Austria could
about 3.7 h/tpellets compared to 7.5 h/tpellets in be optimised by increasing the plant capacities.
Austria. Moreover, a sensible way to reduce the pellet
Fig. 12 shows the composition of the specic production costs would be the combination of
pellet production costs for Austrian and Swedish pellet production plants with decentralised bio-
framework conditions calculated according to the mass CHP plants.
guideline VDI 2067. It can be seen that the costs
based on capital and the other costs are about the
same in both cases. The consumption costs and the
operating costs are signicantly lower in the 5. Conclusions
Swedish case (the consumption costs mainly due
to the reduced heat demand for drying and the The calculations for Austrian framework con-
operating costs due to the lower specic require- ditions show that economic wood pellet produc-
ment for personnel). tion is possible both in small-scale (production
The Swedish pellet production costs are about rates of some hundred tonnes per year) as well as
one third lower than the Austrian ones. Without in large-scale plants (production rates of some
taking the cost difference caused by different 10,000 t per year). However, for small-scale units
drying systems into consideration, the Swedish in particular it is very important to take care of the
pellet production costs would increase to 73.6 h/ specic framework conditions of the producer,
tpellets and the difference between the Austrian and because the risk of a non-economic pellet produc-
Swedish pellet production costs would therefore be tion is substantially higher than for large-scale
reduced to about 19%. This difference is, as systems. For economic reasons, the use of dryers
already explained, mainly caused by the larger in small-scale pellet production plants cannot be
plant capacity (economy-of-scale effect; synergy recommended.
 ARTICLE IN PRESS

G. Thek, I. Obernberger / Biomass and Bioenergy 27 (2004) 671693 693

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