Bionenergy 3 Flashcards
What’s HDD
Heating Degree Days
What are HDD’s used for?
a proxy to estimate the heating energy needs - the higher the HDD for a season, the higher the need for heating. Therefore, we can see that the heating season of 2012-2013 was generally characterised by colder temperatures (i.e. higher HDD), creating some disruption on the pellet market that was not fully prepared, leading to market tensions and even small shortages
What were 2020-21 season like HDD wise?
The heating season of 2018-2019 was slightly milder than the previous ones but only marginally colder than the ones from 2013 to 2016, leading to a modest growth of the pellet consumption for heating. The 2019-2020 season followed the same pattern as the previous season and a reduction in consumption also appeared. The 2020-2021 season started very similarly to the previous but then lasted for much longer. Indeed, in many areas, the energy demand was still rather high in March and April, which unexpectedly supported the pellet demand, allowing most of the market players to empty their stock.
What is the HDD?
depict the severity of the cold in a specific time period taking into consideration outdoor temperature and average room temperature (in other words the need for heating). The calculation of HDD relies on the base temperature, defined as the lowest daily mean air temperature not leading to indoor heating. The value of the base temperature depends in principle on several factors associated with the building and the surrounding environment. By using a general climatological approach, the base temperature is set to a constant value of 15°C in the HDD calculation.
How are pellets delivered to users in the residential markets of each EU country?
Germany, Austria, and Switzerland each have heat markets where consumers operate boilers fed from a silo having a multi-tonne capacity. This explains why these markets are mainly consuming bulk pellets. Outside of these countries, consumers mainly buy bagged pellets, either because residential appliances are typically stoves with lower power output (e.g. Italy) or because the boiler operators are not fed from a dedicated high-capacity storage room. It can also be noted that big bags are rather commonly used in some countries.
EU Industrial pellet consumption - a story
Q1-Q2 2020 showed great tensions on the industrial pellet market. Indeed, the supply was very tight, leading to spot price records, increased use of coal (for the co-firing plants) but enhanced interest and use of agropellets. Following great supply tightness that occurred in Q1-Q2 2019, the rest of 2019 and 2020 completely reversed the trend. To avoid the 2019 hurdle, the utilities took strong positions and entered the 2019-2020 very well stocked while the demand actually slowed down. Indeed, the 2019-2020 heating season has been rather low, impacting the need of industrial pellets. In March 2020, the COVID-19 pandemic did reduce the electricity demand, which impacted the industrial pellet users having their costs exposed. On top of that, the supply is strong, and some utilities did plan outages or even faced technical problems, beside ENGIE Les Awirs closure. The 2020-2021 heating season has started slowly but in many areas the heating season did last longer than usual, leading all in all to a significant energy demand. Moreover, later on in 2021, the high electricity price and fossil fuel price led in some areas to an enhanced use of pellet for electricity production, tightening further the market situation.
Why did Industrial pellet consumption increase in 2020?
The industrial pellet consumption increased again in 2020 to reach its record. This is mainly due to 2020 having been the first full year of operation both for the 4 units of Drax (the 4th unit conversion was finalized in Q3 2019) and the fully biomass converted EP Lynemouth plant. More use is expected at the very end of 2021 as the MGT Teesside unit should be put online after having experienced some delay in the plant commissioning
Where are all eyes turning to for industrial consumption?
all the eyes are now turning to Germany and Poland. Indeed, both countries have committed to phase out coal usage for electricity production, but it is still very unclear at this stage whether pellet will indeed partly replace coal.
EU heating appliances market - the sitch
Generally, the European heating appliances market shows a great development year after year, even if the trends vary among the different countries. The recent initiatives in several countries to phase out the use of heating oil is giving great hope for even further market expansion, despite the fierce competition with heat pumps that is affecting this growth.
How did COVID affect EU heating appliances?
More recently, the COVID-19 lockdown had some impact on the heating appliances sales as many businesses had to pause their activities. But this impact finally appeared to be rather limited. Actually, the COVID-19 also had some positive impact as the homeworking enhanced people to invest in their home, among others, by buying a pellet stove.
