Prices of Various Energy Sources

This article is inaccurate as the price of pellets listed is at retail bagged prices not bulk and the BTU value is of low quality fuel. Softwood pellets from the Pacific Northwest have a BTU value of 8500. In additon, there is no mention on pricing carbon, it is the pricing of carbon and the strong cap and trade systems that promote pellet use in Europe. If you change the numbers to reflect these items a different picture is created. Also the numbers on coal prices are way out of wack. The picture of dirty coal or any fossil fuel use will only change if the real cost of carbon is inserted.

Paul, you are wrong about that. If you click on the link, you will see that those were bulk pellet prices - per ton. If I had used retail pricing, the situation would have been much worse. And you are correct that softwood has a higher BTU value, but it is also more expensive per the link I provided. Had I used softwood with the higher BTU value and higher price, it doesn't change the relative order in the list.

This is an article that simply reflects how much consumers pay for energy. It is not an article that addresses all of the "What ifs", such as "What if we had to pay a price for carbon?" It is an article about what is. As such, it is accurate.

RR

I have to disagree with you Robert, I manufacture and sell pellets. The prices provided are prices in Europe and are based on an index price in Rotterdam. I sell a bulk tonne (MT) of softwood premium pellets for $140 in the domestic market and many manufacturers of low grade pellets will sell them for as low as $110. Carbon credits are real and not in the future, more so in europe and hence the export volume. For example here in British Columbia, Canada, a Carbon Credit is currently selling between $10 to $20 and you can factor 2.5 to 3.7 credits per ton of coal not burnt. So for a poor grade coal you can provide a credit of $37 to $74 per ton of reduced coal use on an annual basis, for high grade coal you can provide a credit of $25 to$50 per ton of reduced coal use on an annual basis. Hence if a ton of coal with a BTU value of 8,800 with a tonne of softwood premium pellets I would be selling that tonne of pellets for somewhere between $66 to $103 per tonne at the same BTU equivalent.

I would agree that this doesn't reflect what is needed to truly reflect the cost of carbon but it does make a dramatic difference to the numbers presented.

Paul, there is a lot of variation on all of these options. There are places where gasoline sells for very cheaply due to government subsidies - which can shift the picture above by a lot.

What I tried to do was select a specific area in the U.S. and stick with that from a bulk supplier of chips. The reason is to more or less show why we use some of the energy sources we use. In the case of most of the fossil fuels, I had East Coast pricing so I used East Coast pellet pricing. That is NOT the price in Amsterdam; per the link I used the price that reflected that of most New England producers.

Regardless, in the case of the U.S., we presently don't have a value for carbon credits, although that may change. We also have very cheap natural gas (as you do in much of Canada), and that may also change. But given the situation as is, wood pellets can't compete with natural gas in places that have ready access to natural gas. There may be some exceptions, but not a lot.

And I speak as someone who favors wood as an energy source. The purpose of the post was not to paint wood pellets in a bad light. I didn't know where they were going to fall until I started putting the table together. And I know that there are areas of the U.S. in which wood is going to probably come out on top; particularly where there is a lot of forest waste and poor access to natural gas.

RR

I know that most of the people in my area are currently using wood pellets for their biomass systems. Recently i've been looking into the governments new scheme, the feed in tariff. Devon where i live gets quiet a lot of sun, not as much as the south east, but still quite alot. Have worked out that i would pay for the system within 8 years if i put in a 3.24kwp system.