Biomass is profitable and cost-effective fuel

Estimate the cost of natural gas during the period when you use it the most. We offer analysis from UABIO expert Anatoliy Bashtovy.

According to the statement issued by Naftogaz of Ukraine, the wholesale price for natural gas in November for heat producers (DH), to which the company supplies it in accordance with special obligations (PSO), remains the same as it was in October this year, and exactly 5374.1 UAH / thousand cbm without VAT and the cost of transportation, which is 10% more than last year in November 2019 and 2.5 times higher than the price in June 2020.

Here is a graph of wholesale gas prices for DH within the PSO:

This trend is typical for the European market in general. For example, we present the dynamics of the gas exchange in the Netherlands, where the increase in winter prices, in compare with the summer ones, is even higher than in Ukraine – 5 times.

It can be argued that after a short period (spring-summer 2020), when the price of gas was at a record low, biomass is again much more profitable than natural gas.

What is the cost of the fuel component of biofuels to replace 1000 m3 of natural gas?

Analysis of prices for certain types of biofuels on the platform of the electronic public procurement system of Ukraine ProZorro for 3-4 quarters of 2020 showed that during the replacement of 1000 m3 of natural gas with a typical calorific value of 34.3 MJ / m3 at a price of 6449 UAH / 1000 m3 with VAT for DH and the notional cost of its transportation 1000 UAH / 1000 m3 (that amounts in total to 7449 UAH / 1000 m3) it is economically more expedient to replace it with almost all types of biofuels. Here is the table:

Thus, in the case of wood pellets, the situation is parity, but if these pellets will be used by the people, for which in November the cost of 1000 m3 of gas with VAT and the conditional price for transportation is already about 9900 UAH / 1000 m3, the use of such biofuels will be economically justified.

Let’s move on to heating with biofuels! This saves our money!

UABIO