Zelya Energy

Fuelwood refers to wood used for the production of energy, electricity, or heat, by combustion. 

A recent field in France, fuelwood is characterized by a high diversity of channels, nature and species of wood, its transformation.

In this context, there is no established price or reference price index that can facilitate and standardize or objectify the contractualization of fuelwood supply between the upstream (production and conveyance of energy wood) and downstream (electricity production or cogeneration in a power plant or heat production in a boiler).

What are the prices of fuelwood?

Given the small number of wood-fired power plants and boilers installed in France, there is no continuous quotation of fuelwood, but only periodic surveys and polls providing price indices or prices in euros per tonnes or cubic meters.

The prices of fuelwood are likely to vary depending on many criteria:

  • the channel: timber or log, industrial or pulpwood, energy wood or forest wood ;
  • the nature: hardwood or softwood ;
  • the species: oak, beech, poplar, spruce-fir, douglas, maritime pine, Scots pine, etc. ;
  • the region of production ;
  • the form: waste, logs, chips, pellets, etc.

Naturally, the purchase price also depends on the quantity consumed, the length of the supply chain, as well as many other criteria: moisture content, particle size, log length, etc.

In addition, it is possible to have elements related to the cost of electricity or heat production (heating) from fuelwood, in euros per kilowatt-hour, which need to be converted with the lower calorific power, expressed in kilowatt-hours per cubic meter, to get back to a volumetric cost, in euros per cubic meters.

What are the challenges for the sector?

The price is a key variable of the negotiations between supplier and plant or boiler operator, and an essential variable for the development of the sector.

On one hand, the plant or boiler operator needs visibility both on the quantity and quality of the fuelwood that will be supplied to him over a period corresponding to the amortization period of his equipment, and on the price at which he will purchase the fuelwood.

On the other hand, the wood supplier often considers fuelwood as a residue or waste from his main activity, linked to traditional wood channels (furniture manufacturing, construction timber, etc.).

Under these conditions, current supply contracts lack reference not only for the price level, but also for its unit - volumetric (expressed in euros per cubic meters or tonnes) or energetic (expressed in euros per kilowatt-hours) - and its indexation over time.

Regarding indexing, the difficulty is to find a trajectory of evolution over a long period, which allows the supplier to make the sale of fuelwood interesting or even competitive, and the operator to be able to control the evolution of his procurement costs taking into account the evolution of purchase obligation tariffs, heat sale or electricity sale on the market.

Most often for the latter