Wood pellets production cost

Both the production and the demand for wood pellets in Austria as well as in several other European countries showcurrently a strong increase. Many companies, mainly from the wood industry, which have appropriate raw materials available for the production of wood pellets are already active in this field or are thinking of entering this market. Moreover, companies, which would have to buy raw materials for the wood pellet production and also companies with drying capacities are interested in the market for wood pellets. To start a pellet production plant it is essential to calculate the pellet production costs in advance in order to consider and investigate specific framework conditions of the producer for an economic operation.

The operating costs comprise costs originating from the operation of the plant, e.g. personnel costs. The other costs include costs such as insurance rates, overall dues, taxes and administration costs and are calculated as a percentage of the overall investment costs. These costs are calculated according to already gained experiences from pellet production plants in operation (data from engineering companies, a questionnaire survey and discussions with plant operators).

The following parameters must be considered in a detailed calculation of the pellet production costs: The investment costs of all units of the pellet production process as well as of construction, offices and data processing, market introduction and planning as well as the utilisation period and maintenance costs of all units and facilities.
- The raw material costs as well as the water content and the bulk density of the rawmate rial used.
- The price for electricity, the electrical power required for all electrical installations and a simultaneity factor, which considers the fact that not all electrical installations operate on full load at the same time.
- The interest rate.
- The equipment availability, which considers both scheduled and unscheduled shutdowns.
- In case a preceding dryer is installed at the start of the process line, the specific heat costs and the heat demand for drying, furthermore the recoverable heat and the profit from heat sales in case that heat recovery takes place.
- The costs and the demand on bio-additives that may be used and the corresponding dosing system.
- If a conditioning unit working with steam is used, the demand and the costs of the steam.
- The storage costs, depending on the storage capacity and the kind of storage system used (storehouse and/or silo storage).
- The kind of shift work operated (plant utilisation).
- The personnel costs both in production, marketing and administration.
- The annual pellet production rate as well as the water content and the bulk density of the pellets produced.
- Other costs.

From these data both the total pellet production costs as well as the costs caused by each unit or cost factor of the pelletisation process can be calculated.

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