Wood-based energy contracting: How does it work?
In this type of contracting project, a group of farmers invest in the biomass installation and the required construction work and rent space in the customer's cellar. The operators are responsible for the functioning, maintenance and any repairs of the heating system. As in the case of district heating networks, the customer pays a connection charge and the price for the actual heat intake, which is determined by means of a metre.
The customer is not involved in the organisational side of running the heating system. If the coefficient of performance is favourable, surrounding buildings can also be supplied (directly, or indirectly via heat exchanger). The intention behind wood-based energy contracting schemes is to facilitate the use of biomass heating systems for multi-storey residential buildings, municipal buildings and trade and business establishments without requiring potential users to bear the investment costs. In effect a kind of micro-district heating plant is set up: customers are supplied with heat without having to deal with the installation, operation or financing of the system.
The success of wood-based energy contracting projects
The dynamic development of this type of contracting project and the great number of projects realised demonstrate the success of this model. The first installation of this kind came on stream in 1995; by early 1998, 34 of them (representing a total capacity of about 3,000 kw) were operating smoothly and successfully. By October of that year, definite plans had been made for 10 more projects with an overall capacity of just over 1,000 kw.
Whereas the customers in such projects have tended to be public-sector institutions (town halls, kindergartens, schools) or privately owned houses, there is now a marked trend towards supplying multi-storey residential buildings. The initially sceptical housing associations have come to see the advantages, too.
Costs of a wood-based energy contracting project
The current price situation for such schemes is as follows:
The operators (farmers) must come up with approximately 10 to 15% of the capital requirement; the rest can be financed from connection charges and subsidies available under investment promotion schemes (currently about 30 to 50%). The operators can expect to achieve a price of ATS 250 (excluding VAT) per cubic metre (bulk volume) of soft woodchips; maintenance and service work can be charged at the hourly rates set by ÖKL /1/ (approximately ATS 100 per hour).
For the customers, this works out to standard biomass district heating rates:
| rates for current heat intake: |
ATS 0.75 to 0.85 (excluding VAT) per kWh
about 10% higher for low energy houses
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| connection charge (non-recurring): |
ATS 2,000 to 3,500 per kW in old buildings
ATS 2,500 to 4,000 per kW in new buildings |
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/1/ Österreichisches Kuratorium für Landtechnik und Landentwicklung (Austrian Council for Agricultural Engineering and Rural Development)

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