News - March 23, 2011

Wood chip power too pricey without subsidy

Harvesting wood for generating electricity is only economically viable at current market prices with government subsidies. This has emerged from research conducted by the Science Shop for three agricultural nature associations in the Achterhoek in the eastern Netherlands.

The three clubs have enough wood chips at their disposal for 20 medium-sized central heating systems with an output of 200 kilowatts each. The cost price of the wood, including harvesting, chipping and transport, is 4 to 5 cents per kWh. The market price for wood chips is around 1.2 to 1.8 cents per kWh. So the costs are not covered. With an SNL subsidy (a subsidy for nature and landscape management), harvesting does become viable, however. Potential users of wood-fired central heating systems include care institutions, swimming pools, recreational parks and poultry farmers.  

LEI researcher Elsje Oosterhof expects an increase in the demand for wood biomass. In Germany the price of wood chips is around 2.4 cents per kWh. She expects market prices to go up. Harvesting wood chips from wood pruned during landscape maintenance is becoming more and more profitable. The report can be downloaded from