Farm Diversification

There are a range of diversification opportunities with woodfuel, including: the installation of a wood-fired boiler on the farm, sale of woodfuel off-farm and finally the sale of heat to third parties.

Woodfuel Installation

A woodfuel installation can bring a number of benefits to the farm business, both reducing fuel costs and generating an income from the Renewable Heat Incentive.

If the installation will be used to heat non-domestic buildings (or two or more domestic buildings) then the non-domestic RHI can provide a guaranteed income per kWh of heat produced for 20 years. The amount depends on the scale of the boiler and the hours of use. An RHI for single domestic premises is due to be introduced at the end of 2012.

Woodfuel compares very favourably with oil and LPG, even without the price spikes seen in recent winters. Additionally, woodfuel, in particular self-supplied woodfuel, helps reduce the vulnerability to rises in oil prices and problems with availability.

Woodfuel Supply

The market for woodfuel is growing rapidly and it is expected that it will become increasingly economic to thin and harvest undermanaged and small farm woodlands that may not have been touched for a long time. There are a variety of woodfuel supply chain models, and choosing the most appropriate model requires a degree of expert advice on the variety of costs involved and the nature of the market opportunities. Put very simply, they fall into the following categories:

• Self-supply: most likely to be logs unless the woodfuel installation will be larger than a single farm house, but could also be wood chips.
• Supply timber to an established woodfuel supplier: A straightforward, low cost route into woodfuel supply.
• Supply logs: The wood burning stove market is rapidly expanding, with c. 150,000 sold in the UK in 2009.
• Supply woodchip: Due to the cost of processing, machinery, in order to be a viable business, this needs to be undertaken on a reasonable scale or alternatively by working cooperatively with other woodland owners

Heat Supply

With a so called Energy Service Company, you own the boiler plant, take care of maintenance and fuel supply, and the customer simply pays for heat used. As the Renewable Heat Incentive is payable to the owner of the boiler equipment, this can prove an attractive business opportunity, although the upfront capital costs can be significant. One option could be to install a boiler to meet the needs of the farm, and if there are adjacent properties with a heat demand, to extend the heating system and increase the boiler size to include these properties and sell them heat.

In order to install a wood-fired boiler you will need sufficient space for the boiler house and fuel store. The space required will vary greatly depending on the size of the boiler, the fuel and the frequency of fuel deliveries.

The boiler will typically take more space than an equivalent oil boiler and often needs extra space around it for access and servicing. For a log boiler it is recommended to have space to stack the next load by the boiler to assist in drying the fuel.

The size of the fuel store will depend on the fuel, with pellets being considerably more energy dense than logs or woodchip, therefore needing a smaller fuel store. It will also be influenced by the likely frequency of fuel deliveries and haulage costs of small deliveries.

Another consideration is physical access to the fuel store. It is important that the fuel supply vehicle and method are appropriate to the access roads and the fuel store should be very carefully designed based on the fuel and delivery options available in your area or on your farm.

Compared to an equivalent fossil fuel system, a woodfuel system will be considerably more expensive.  However, the Renewable Heat Incentive has been designed to bridge the gap between renewable heating systems and conventional fossil fuel boilers.

Wood-fired boilers vary in price depending on the size of the system, fuel, level of sophistication, size of accumulator tank, whether it is a retro fit, containerised system or new build.

In general, woodfuel will be a technically and economically viable option on all farms and estates.

The Ignite Woodfuel Training is a three day Lantra Awards approved course – contact Rural Development Initiatives for dates and locations.

A number of organisations are running occasional courses, one day introductory seminars etc. For information try the following websites:

• SAC - Events and also Farming for a Better Climate Events
• Biomass Energy Centre – Events, Training and Courses