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Is burning water profitable?

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In Finland we have seen decades of research regarding the benefits of drying woodchips for use as fuel in biomass heat generation. Drying seems reasonable, but has its use reached the end of the road? Is there a way to improve cost efficiencies even more?

In this article I will introduce a new approach to woodchip heat production by evaluating the financial implications of woodchip moisture levels on the biomass heating value chain. For the sake of a clear focus the impact of different wood types on cost structures has not been taken into consideration.

In biomass heat production there are three factors that have a particularly significant effect on cost efficiency; the moisture content of energy wood and woodchips, dry matter loss, and the energy efficiency of biomass heat production.

Moisture content in woodchip production

Water in wood is located in cell cavities (lumens) and cell cavity walls. The water in cell cavity walls is part of the chemical makeup of wood and its removal requires significantly more energy than water contained in cell cavities (see Diagram 1). When woodchip is dried to under 23 % moisture the drying energy required grows significantly, as free water in cell cavities has been removed and the energy is used to remove moisture from cell cavity walls.

The total cost of woodchip is a combination of the stumpage price, harvesting, chipping, storage and transport. These contributing cost factors vary according to the harvesting method, transport distances and storage arrangements.

Energy wood is stored as logs and woodchips to minimize chip moisture levels and maximize energy content (and sales price) upon delivery. Roadside timber stacks reduce the transport weight and related transport costs of wood.

The drying process in the procurement chain aims to reduce moisture levels from about 60 % (fresh chips) to about 25–30 % (dried chips). Drying is mainly achieved thermally, i.e. by taking advantage of the combined effects of the sun and wind. A minimum level of thermal drying in Finnish conditions could be held to be about 30 % water content.

The fresh woodchip production chain does not include storage and its energy wood is burnt in the boiler immediately after harvesting. The tree is felled, brought to a pick-up point, loaded and transported via woodchip chipping to the boiler without the need for roadside wood stacking and protecting the wood from external moisture.

The transport weight of fresh woodchips is naturally higher than that of dried woodchips, but the production process is much simpler; drying woodchips can take anything from several months to years, whereas it only takes days or at most weeks for fresh woodchip to arrive at the boiler after harvesting.

The amount of energy required to dry woodchips as a function of woodchip moisture content

Storage destroys wood

The storage of energy wood and woodchips at one or several stages in the dry woodchip production process is inevitable. A factor that is often overlooked is the dry matter loss of the fuel, i.e. the slow burning of woodchips during storage that occurs naturally as micro-organisms break down the wood fibres. As the wood is broken down the fresh woodchips give off heat.

Several field studies have been conducted regarding the amount of dry matter loss. The Technical Research Centre of Finland (VTT) conducted research in the early 2000s on the dry matter loss of woodchip stacks. It found the loss to be about 16 % over a six month storage period for initial moisture levels of 58 %. For moisture levels of 42 % the loss was about 7 %, which indicates that even for dryer woodchips the loss is still significant. It is worth noting that the greatest amount of dry matter loss is incurred in the first three months of storage.

Energy efficiency of biomass heat production

There are currently two schools of thought regarding the energy efficiency of biomass heat production. The first and traditional approach is to view heat production energy efficiency simply as a function of boiler performance where the focus is on the combustion process and its efficiency.

An alternative approach is to examine the entire heat production process from fuel production up to the recovery of residual heat. In this case the focus is on plant performance rather than boiler performance.

The fuel and its moisture content is of crucial importance in both approaches. When the goal is to optimize boiler performance dryer woodchips provide the best results. The combustion process energy is therefore not used to evaporate moisture contained in the fuel and thereby the real performance of the boiler is maximized. Boiler performance is measured as the ratio of heat generated in relation to the energy content (qSTD) of the wood upon delivery. Typically boiler performance is between 0.89–0.91 when burning thermally dried dried woodchips (moisture about 30 %).

In the alternative approach fresh woodchips (moisture about 60 %) are combusted. A large part of the heat energy produced by the fuel is used to evaporate water contained in the woodchips. A modern boiler’s performance typically decreases to 0.85–0.88 in this case. Burning fresh woodchips thus diminishes boiler performance.

Energy efficiency improvements with modern flue gas scrubbers

What happens when an efficient flue gas scrubber is coupled to heat production? The flue gas scrubber condenses the vaporized water contained in the boiler’s flue gas. Vaporizing and condensing are thermodynamically opposite processes; vaporizing absorbs energy and condensation releases energy. When water contained in flue gases are condensed in the scrubber’s condenser to under the dew point, heat is released and transferred to the district heating network.

The effects of heat recovery are reflected throughout the entire heat production chain including wood procurement and harvesting. It should also be remembered that the heat recovery of a condensing scrubber is reduced dramatically if dried fuel is used.

The heat recovery efficiency of a flue gas scrubber is best described as a heat recovery percentage, which is the relation between heat produced by the scrubber and heat produced by the boiler. Graph 1 outlines the relative heat recovery percentages that can be achieved by modern flue gas scrubbers (Caligo scrubber) for woodchips with different moisture levels. Other heat recovery parameters are assumed to be stable.

Heat recovery of Caligo flue gas scrubber as a function of woodchip moisture levels

Stages in dry and fresh woodchip production


Sales margins in fresh and dry woodchip production

In order to concretize the financial implications of dry and fresh woodchip use a simulation model was created for analysing the woodchip delivery chain. The model includes the steps presented in Diagram 3 from wood harvesting to delivery at the boiler, as well as boiler and flue gas scrubber performance values for fuels with varying moisture levels. An initial value of 50 GWh was assigned to heat production for each simulation.

The simulation results are presented in Diagrams 2 and 4 (overleaf) according to woodchip supplier margins. The simulation includes the Kemera subsidy, which will be discontinued this year, as well as fixed costs associated with different production phases. Other woodchip supplier fixed costs are not included. It should also be noted that the simulation does not consider the net benefit of heat recovery for heating companies as the cost and income simulation was done from the perspective of woodchip suppliers.

Publically available reports and statistics were used to define the stumpage price, for which energy wood of 8 cm diameter was used that is harvested as part of forest maintenance activities. The harvesting unit costs do not include forest maintenance service compensation as this data is not available. Harvesting and forest transport costs are thus most likely overestimated in the computation. The discontinuation of the Kemera subsidy will reduce woodchip suppliers’ margins and therefore downward pressure on energy wood prices is expected this year.

The greatest advantage of fresh woodchip use is that smaller amounts are required to achieve the desired heat energy levels. This benefit is visible throughout the entire woodchip production chain and reduces costs at each stage of the delivery chain starting from energy wood procurement. The reduction in woodchip use is based on the use of an efficient flue gas scrubber in the final stage of heat production, where the recovered residual heat reduces the level of direct firing and fuel required. The significance is greater in fuels with high moisture levels, as the condensing scrubber performance is optimal under such conditions. Identical flue gas scrubbers were used for each heat production simulation.

In the fresh woodchip production simulation (Simulation 1) it is assumed that roadside storage and woodchip terminal storage can be entirely avoided. Logs are thus loaded directly onto trucks after harvesting and transported to the chipping area. By eliminating the stacking and covering of timber logistical costs are reduced. The afore-mentioned dry matter loss is also avoided as no storage of woodchip is needed.

An indirect benefit of removing the need for thermal drying is that woodchip suppliers carry less risk. Drying success is highly dependent on practical conditions and the fuel moisture level can even increase during rainy periods. The woodchip supplier carries significant risk during storage as sales income is tied to the woodchip energy content upon delivery and not its real mass.

Storage at woodchip terminals is viable only when several heating plants operate in a particular area, a scenario not included in the model. As such logs are processed into woodchips at the end use point in both models.

The amount of water increases the total mass of logs and woodchips to be transported. The impact is included in the simulation and in fresh woodchip production and therefore truckload volumes are underutilized. For the simulation of both production types 60 tonne trucks are used for transport distances of 50 km. By increasing the truck size to 76 tonnes the transport cost efficiency can naturally be improved, but this solution is unlikely in Finnish conditions.

One can only imagine how much transport logistics would be simplified if fresh woodchip production were the norm. Added benefits that are difficult to quantify will most likely be achieved. It cannot be assumed that transport distances would increase in fresh woodchip production as routing directly to the end user may also shorten the distances. As such the increase in transport costs is dependent only on the higher moisture levels of logs. Load weight increases vary between 5–40 % depending how much drying has occurred during roadside stacking. The drying process is completed during woodchip storage.

A challenge in fresh woodchip production is operating a so-called hot chain. Achieving a hot chain requires precise and smooth running process arrangements and therefore there is a realistic risk of an increase in equipment stand-by periods.

Sales margins (%)


With the help of simulation the effect of moisture content on the cost of fresh and dried woodchip production can be ascertained with sufficient accuracy. The most significant difference is in the amount of logs required to produce the desired heat energy, the effect of which is felt in almost all the stages of woodchip production. The amount of energy wood required in fresh woodchip production is much less than for dry woodchip production. This is due to the markedly higher energy efficiency of heat generation, which in the simulation is based on a condensing flue gas scrubber with a heat pump (Caligo scrubber performance data).

Other notable differences become visible when roadside stacking and woodchip terminal storage is eliminated from the fresh woodchip production chain. Whether the production chain can in practice be simplified quite this much depends largely on how successfully the hot chain can be achieved. The transport of dry woodchip is more efficient as a result of the reduced woodchip and log weights. However, dry matter losses incurred during woodchip storage cannot be ignored. The loss is significant and therefore the cost difference in the simulation leans heavily in fresh woodchip production’s favour.

Could a realistic alternative in future be a so-called hybrid production system that produces both fresh and dry woodchips in the same production chain? It is a proven fact that this production model can be applied to cases where there are several heat production plants in the same area of which some are equipped with efficient flue gas scrubbers. Dry fuel is transported to those plants that don’t have flue gas scrubbers and fresh fuel to those that have.

The simulation is naturally theoretical and a relatively imprecise method of gaining knowledge of the absolute costs of different woodchip production methods. The inaccuracy is partly a result of uncertainty regarding the initial data used in the simulation as well as assumptions and simplifications. Unit costs of the different production stages were gathered from different research papers and statistical data that contained significant differences due to disparities in the real content of the various stages. In particular, unit cost data gathered from reports about the front end of woodchip production show large differences mainly due to different felling and harvesting methods and energy wood sizes. Some unit costs were averaged for use in the simulation.

Despite inaccuracies in unit cost initial data it can be inferred with relative confidence from the simulation that fresh woodchip production is more profitable for woodchip suppliers than dry woodchip production. This holds even if the current cost structure between woodchip suppliers and heating companies is maintained and the Kemera subsidy in Finland is removed. The result of the comparison is quite surprising even, as traditionally the transport of fresh energy wood and woodchips has not been considered economically viable due to the higher transport weights. Heat producers also benefit if the plant’s combustion technology can handle fresh fuel without reducing performance significantly and if flue gas heat recovery works efficiently throughout the load period.

It is, therefore, profitable to burn water after all and benefits can be accrued by woodchip suppliers and heat producers alike.

It can be inferred with relative confidence that fresh woodchip production is more profitable also for suppliers.



Kuoppamäki, Raija, et al: Puupolttoaineiden muutokset varastoinnissa ja kuivauksessa. VTT projektiraportti 31.3.2003.

Kärkkäinen, Mikko: Metsähakkeen markkinahinnan kehitys ja hintaan vaikuttavat tekijät. Kandidaatintyö ja seminaari, Lappeenranta Technical University 2013.

Laitila, Juha, Väätäinen, Kari: Kokopuun ja rangan autokuljetus ja haketustuottavuus. Metsätieteen aikakauskirja 2/2011.

Muje, Risto: Rangan ja murskeen terminaalikuivaus. Opinnäytetyö, Kymenlaakson ammattikorkeakoulu 2012.

The original text has published in our 1/2015 Top Engineer magazine


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