Woodfuel Supply Chain Design Study

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  • 1. Wood Fuel Supply Chain Design Study for Reigate and Banstead Borough Council Prepared by Julian Morgan-Jones and Bruce Norgrove for Raymond Dill and David Sowe R&B BC February 2008 24/05/10 DRAFT V0.1 15.02.08 Page
  • 2. Contents
    • Executive Summary
    • Engagement Objectives and Methodology
    • Background and Opportunity for R&B BC
    • Assessment of Local Demand
    • Assessment of R&B BC’s current production and supply capability and capacity
    • R&B’s Own Supply Chain Options and Costs
    • (Detailed design for selected option - TBD)
    • Recommendations and next steps
    24/05/10 DRAFT V0.1 15.02.08 Page
  • 3. Executive Summary
    • To be completed after draft discussions
    24/05/10 DRAFT V0.1 15.02.08 Page
  • 4. SEWF Engagement Objectives and Methodology
    • Objectives
    • To identify R&B BC’s own wood fuel volumes, capability, capacity with the aim of developing a design for R&B BC’s own wood fuel supply chain and detailing the costs and benefits for doing this.
    • Methodology
    • An assessment of background, known demand, R&B objectives for wood fuel was conducted in meetings with Raymond Dill and David Sowe and the SETG
    • Assessments of R&B own production capability and capacity was conducted in interviews with representatives from R&B BC’s Parks and Countryside department and with contractors used by them for managing parks and heath lands. Information on woodland management and potential wood volumes came from a separate study for R&B BC by Bioregional.
    • Assessment of recovered wood capacity and capability was conducted through interviews with BritaniaCrest Waste recycling
    • Analysis of findings was conducted with reference to forestry commission and other industry standards for each production and capability element
    • Options were presented and discussed with the study sponsors before finalisation of this document
    24/05/10 DRAFT V0.1 15.02.08 Page
  • 5. Background, Objectives and Opportunity
    • There are a number of drivers supporting the increased use of renewable energy within the South East. Critical amongst these are rising fossil fuel prices, increasing awareness of energy security as a long term issue and climate change in the form of governments carbon reduction targets. These targets are increasingly being reflected in regional plans for housing and construction such as the South East Plan and specifically for the purposes of this study for the area know as the “Gatwick Diamond” as well as in local planning requirements and building codes. This applies equally to R&B’s own progressive planning policies for 10% of energy requirements of all new construction to be derived from renewable sources from March 2008. As early as October 2005, as part of R&B BC’s own sustainability objectives, Biomass was being seen as a key contributor to the increase of renewable energy within the region [1] . A critical enabler for biomass is the development of a supply chain to deliver this. The development of R&B BC’s own supply chain would from part of a wider supply capability for region. Over and above this it would help R&B BC to meet a number of its own aspirations and objectives while providing a additoinal benefits.
    • Meeting R&B’s local objectives
    • R&B’s vision for wood fuel is still in its formative stages. Work such as this report and others are contributing to the development of ideas and to a growing understanding of the possibilities and potential. In the mean time R&B are keen to see biomass and wood fuel contribute to current council objectives. Key amongst these are:
      • To provide a significant contribution to meeting council’s carbon the reduction targets: Biomass is a carbon neutral fuel that if used widely could contribute significantly achieving this whilst at the same time reducing the Borough’s reliance on fossil fuels and hence improving energy security by the use of a locally produced fuels. Biomass is increasingly being seen as the best land based investment for carbon reduction for large scale heating requirements. Council support for renewable energy through planning policy is already
      • To support local regeneration: Biomass supply is a local issue. If the large new housing and commercial developments within the Borough can be encouraged to utilize biomass as a heating fuel this will support regeneration of local woodlands and the diversification of local farmers to produce wood (in the form of short rotation coppice) as an energy crop.
      • To improve the Council’s image as an environmentally concerned, innovative, progressive organization: Wood fuel has traditionally lagged behind more “sexy” environmental technologies such as wind and solar thermal and photovoltaic. It is clearly a key environmental technology and this image is rapidly changing as more and more organizations realize the opportunity and value of wood heating particularly for local heating and power requirements.
      • To provide an income stream for management of Council owned woodland resources: Currently the council spends in the order of £xxxx to manage and maintain its parklands essential H&S for trees. To date this is a net cost to the Council and rate payers. If the wood created as a by product of this had a market, this could be used to offset costs or expand council services. Moreover if the council were to install its own biomass heating systems it could use wood direct from council resources could to replace fossil fuels.
    • [1] Sustainability Appraisal and Strategic Environmental Assessment of the Local Development Scoping Report Oct 2005
    24/05/10 DRAFT V0.1 15.02.08 Page
  • 6. Background, Objectives and Opportunity
    • Opportunities from using wood as a fuel
    • As well as meeting local objectives the use of wood as a fuel provides other opportunities for the council. The development of the councils own capability to supply provides for
    • The Ecological opportunity
    • Household energy consumption is responsible for 17%of the total Borough’s Ecological Footprint [2] . While the technological potential for almost zero energy buildings exists, achieving it depends on lifestyles and institutions (for instance, the problem of split responsibilities between landlord, utilities and tenants). Use of biomass for heating and power together with other renewal technologies such as solar thermal provides a cost and environmentally effective compromise for new developments. [3]
    • [2] SEI: The Ecological Footprint of Reigate and Banstead. Jan 2006
    • [3] Preston Regeneration: Sustainable Energy Feasibility Study. March 2007
    24/05/10 DRAFT V0.1 15.02.08 Page
  • 7. Demand Assessment 24/05/10 DRAFT V0.1 15.02.08 Page The table below shows the estimated known and potential demand within the R&B area by probability. This clearly shows a strong potential demand and hence provides confidence for establishing a local supply capability. Site Tonnes @ 30% MC Probability Comments Park 25 (actual demand) 700 100% Currently the only installed significant demand for a local supply chain is the 750kw boiler installed at Park 25 providing heat as part of a district heating system for a 70+ houses as part of the new housing and commercial development. Wood fuel required from April 2008. Royal Alexandra and Albert School 350 Phase 1 (1700 Other phases) 75% A boarding school owned by the Gatton Park Trust Off-gas. Currently uses £241k of oil per annum to heat school buildings, swimming pool, tennis courts etc Sited next to 2000 acres of National Trust wood land Phase 1 – 1 school building and swimming pool Phase 2 – rest of school (only recently has had new oil boilers put in) Horley Housing development 2000 50%?? 2600 new homes 1100 in the north west 1500 in north east will be using ground source heat pumps 500 of total could potentially be heated using biomass Preston Housing development 3000 50%?? Preston 300-400 new homes Raven Housing Trust is the developer Will be sold with conditions by the council and BREAM level 4 Have funding of £5m for biomass CHP under New Growth Points Redhill Town Centre Development 4247 ?? ??? East Surrey Hospital 2500 ?? ??? Total 12,797
  • 8. R&B Current Capacity and Capability Assessment 24/05/10 DRAFT V0.1 15.02.08 Page Wood Resource: Tonnes of wood @ 30% mc available from following Woodlands 558 ha woodland, up to 500 tonnes wood per annum Arboricultural Approx 50 tonnes per annum in house - Much larger potential volume from Surrey CC street trees in local area Land and scrub clearance Approx 130 tonnes per annum during habitat restoration schemes Fuel Wood from waste recycling Up to 10,000 tonnes per annum from BritaniaCrest + more from 3 other local waste recyclers Capability Storage and processing 1.5 ha, 2 sites, no suitable undercover storage Equipment 2 small tractors for gang mowing in summer, 1 x small yard tractor, 1 x 4.5 tn trailer, no forestry or processing equipment, small brush wood chipper Manpower and budget In house team at full capacity. Arb. Contracted out at £100k p.a. and Forestry sub-contracted. Habitat and other done by Volunteers Skills The department currently has none of the skills in house required to harvest, extract or process wood for wood chip Findings Summary The study has found that R&B can produce in the order of 693 tonnes of wood annually on a sustainable basis from its own resources. More could be produced in association with Surrey CC tree services but this needs further assessment. However the Countryside and Parks Team have neither the manpower, skills, equipment or additional budget to do this work internally. They currently rely on external contractors for managing woodland and the health and safety related tree work. Members of the department would like to bring contracted work in-house and expand the man power and capability of the team to perform these and other woodland/tree related functions and are keen to explore the opportunity wood fuel might bring to do this. The study also found a large potential supply of recovered wood from local waste recyclers. Note: Forestry Figures still need confirmation by Andrew Tolfts Arboricultural Habitat & other Forestry HW Roundwood 0 48 217 SW Roundwood 0 47 88 HW Waste 55 24 158 SW Waste 0 12 44 Totals 55 131 507 All sources 693
  • 9. 24/05/10 DRAFT V0.1 15.02.08 Page OPTION 1A – INVESTMENT IN AND UTILISATION OF IN- HOUSE R&B RESOURCES This assumes R&B invest in all the equipment and man time to support all process elements from harvesting of wood to delivery of chip. OPTION 1B – UTILISATION OF IN-HOUSE WOOD - FULL OUT-SOURCE OF PROCESS ELEMENTS Assumes the use of contractors under the management of R&B perform all processes harvesting of wood to delivery of chip. Cost / Benefit for R&B Supply Chain Options Notes: 1. Cost per tonne include annual costs: Man time, insurance, servicing, running costs
    • Conclusions
    • Most financial benefit will be retuned from using R&B wood replace its own fossil fuel use. The “virtuous circle”.
    • A contracted out solution is the most cost effective way to provide a supply chain solution for R&B as it returns a margin through either external sales or internal use from year 1.
    • The in-house approach breaks even, even against gas and may have other benefits for the Parks and Country side team.
    • The in-house solution may benefit from use of the current H&S tree surgery budget as part of a holistic in-house solution
    • The in-house solution could benefit from access to more wood to achieve better economies of scale say through a tie up with Surrey CC or through setting up a tree station type operation, though land / space would need to be found for this.
    Costs Process Cost £/tonne p.a. Initial Capital Investment Option 1A – In House Option 1B - Outsourced Option 1A only Harvesting 9.67 10.17 £5,000 Extraction 14.11 15.58 £25,000 Storage 14.43 14.43 £5,000 Processing 18.57 9.35 £25,000 Loading 0.00 1.81 £0.0 Delivery 6.87 8.97 £7,000 Equipment depn. over 5 years 19.34 Incl. 161 man days p.a. Total £83.08 £60.31 £67,000 Total cost £57,574 £41,794 n/a Benefits p.a. yr 1-5 External sales of chip @ £65 and £75/tn + margin £45,045 and £51,975 -£12,529 and -£5,599 - Management cost £45045 and £51975 £3,251 and £10,181 - Management cost n/a Energy value of 693 tns wood @ 30% mc (kWh) 2,425,500 Oil displacement Ltrs 224,583 Oil cost (@48p/ltr) £107,799 In House Saving against oil p.a. £50,225 £66,005 Saving post year 5 p.a. £63,628 Gas displacement (therms) 827 613 Gas cost (2.5p/kWh) £60,637 In House Saving against gas £1,041 £18,842 Gas Saving Post year 5 p.a. £16,466 Pays for wood land management; Energy security; 150 less tonne carbon produced per year Additional kit and possibly man time for other parks and country side uses
  • 10. Assumptions for Options 1A and 1B 24/05/10 DRAFT V0.1 15.02.08 Page
    • Motor manual harvesting and stacking in woodland
    • Immediate removal of all usable timber from woodland direct to the yard using tractor and forwarding trailer
    • Collection of stacked timber from Habitat management using tractor and forwarding trailer
    • Collection of timber from arboricultural arisings using existing vehicles or forwarding trailer
    • Stacking all timber at new pond farm (option 1A only)
    • Chipping seasoned timber directly into delivery trailer using hand fed drum chipper and delivery to council or other users using tractor and high lift trailer
    • Have not included cost/benefit of out/in sourcing Arboricultural contract
    • Have not included management:
      • Could be done either by council, forestry management company or other
    • Have assumed a loss in rent £10,000 per annum on 0.3 ha of storage space and 120m2 of barn space
    • Does not include standing value of timber
    • As for 1A with the following amendments …
    • Stacking all timber at yard with undercover fuel store
    • Chipping seasoned timber directly into undercover fuel store using 16” crane fed chipper
    • Loading into trailers using telehandler or front loader and delivery to council or other users
    • No loss of rent from Pond Farm
    Assumptions for 1B only Assumptions for 1A only
    • Man Days: c.160 @ 120 per day
    • [not management]
    • Equipment:Motor manual harvesting equipment
      • Timber trailer with crane
      • 80hp tractor
      • 12” Handfed drum chipper
      • 15 / 20 cu.m High lift trailer
    • Storage Space: c.0.4ha [will work in new pond farm] No need for chip storage
    Assumptions for 1A and 1B
  • 11. Appendices 24/05/10 DRAFT V0.1 15.02.08 Page
  • 12. 24/05/10 DRAFT V0.1 15.02.08 Page In-House Processing Data
  • 13. 24/05/10 DRAFT V0.1 15.02.08 Page In-House Annual Costs and Investment Data
  • 14. 24/05/10 DRAFT V0.1 15.02.08 Page Sub-contracting costs for options analysis 1m3 stacked softwood timber = 0.65 m3 solid timber 1m3 stacked hardwood timber = 0.50 m3 solid timber 1m3 stacked waste timber = 0.3 m3 solid timber Timber stacked at 2m Motor manual harvesting = Average 12cu.m per day per person Average of 5cu.m of wood on 8cu.m tractor towed forwader
  • 15. Summary 24/05/10 DRAFT V0.1 15.02.08 Page Demand (14,000t) Preston 3000t Redhill TC 4247t Horley 2000+tonnes RAAS 350-2000t Park 25 800t ESH 2500t R&B’s c.a. 2000t Local Resources (17-50,000t) Supply Chain Mike Connick c.a. 5000t Brit. Crest 10,000t Other SEWF Membs 6000t Other recyclers 30000t Simon Cox Gatwick Diamond Farmers ESCO The Opportunity Landscape
  • 16. Potential Sites: New Pond Farm 24/05/10 DRAFT V0.1 15.02.08 Page Glass Houses Access to Woodhatch Road Existing Buildings
  • 17. The Horley Wood Fuel Hub and ESCO Opportunity
    • All within 2-3miles of Horley
    • Wood fuel Hub
      • Simon Cox
        • Silage clamps
        • Land
      • Britania Crest
        • 10,000t reclaimed wood
        • Delivery vehicles
    • Farmers ESCO (SEEDA funding)
      • Harvesting, supply chain, boiler infrastructure
    24/05/10 DRAFT V0.1 15.02.08 Page
  • 18. 24/05/10 DRAFT V0.1 15.02.08 Page Britaniacrest Moat Farm Potential sites: BC & MF
  • 19. Moat Farm 24/05/10 DRAFT V0.1 15.02.08 Page Storage Bays Unused Land Good Access to A217
  • 20. Development Area, BC & MF 24/05/10 DRAFT V0.1 15.02.08 Page Britaniacrest Moat Farm Horley Development area?