Most organisations and households in the UK are accustomed to buying electricity, gas or oil to supply their heating needs, and may find the idea of using wood-fuel daunting.
Midlands Wood Fuel supplies wood chips and pellets in the West Midlands, Northwest England and Wales, and has set up procedures to make the supply of wood-fuel as simple and reliable as the supply gas or oil. It has implemented stringent quality control procedures, allows customers to buy units of heat rather than tonnes of fuel, and ensures that it knows its customers’ needs well enough that fuel deliveries are always on time and they are never without heating.
We have 15 boilers at various sites and use Midlands Wood Fuel to supply all of them. We’ve looked at other suppliers but no-one else can offer the same security of supply.
Philip Winborne, Energy Conservation Officer, Telford and Wrekin Council
The West Midlands and Wales have had a long history of forestry and related industries, with one of the highest densities of sawmills found anywhere in the UK. The history of wood use in the area goes back many years, to when it was used to produce charcoal for the smelting of iron. This started to decline with the invention of a blast furnace that burned coke instead of charcoal, at Ironbridge in 1709.
The demand for space and water heating in the UK is about 640,000 GWh, representing about 33% of CO2 emissions. Making better use of the UK’s national wood resource could reduce imports of fossil fuels for heating, and reduce CO2 emissions as well. An estimated additional 4.2 million dry tonnes of wood for fuel use could be extracted from UK forests, which would produce 17,500 GWh, or 2.7% of UK demand for space and water heating, on top of the 2% already supplied by wood and energy crops.
Just a few miles from Ironbridge is Midlands Wood Fuel, a thriving small business that is turning back the tide and increasing the use of wood again, this time to supply heating for homes, businesses and public buildings.
Midlands Wood Fuel (MWF) was founded in 2004 by Ewan Bent, who had for a time been promoting wood-fuel while working for Marches Energy Agency. Ewan set up the business in order to promote the use of wood-fuel in the region and make sure people installing boilers could be sure of a reliable fuel supply.
Most of MWF’s customers are in the West Midlands, and the business is also expanding into neighbouring Gloucestershire and Northwest England. In 2010/11 MWF had an income of over £700,000, mostly from the sale of wood chips, with the rest coming from the sale of wood pellets and consultancy.
Update: Having joined forces with Forest Fuels in July 2016, Midlands Wood Fuels now operates under the name of Forest Fuels.
MWF is built around core values of customer service and the supply of high quality fuel, combined with thorough financial control to improve sustainability. The business buys in seasoned logs to be chipped, and delivers the fuel produced to customers local to each depot. Wood pellets are also delivered, but are bought in from two UK pellet mills that meet MWF’s quality standards. MWF is currently independent from any particular biomass boiler installer, allowing it to work with all local installers to gain access to new customers. In the past, however, MWF worked closely with an installer, and it is through this that the staff have the expertise to be able to deliver good customer service. MWF has in-depth knowledge of the biomass boilers used by its customers, and tracks their fuel usage relative to their expected demand for heat, so it can warn them if their boiler needs maintenance. This also means it is able to predict when a customer is likely to be running low on fuel, and can check if they would like a delivery.
Fuel quality is another area where past experience with biomass boiler installations means MWF understands exactly what customers require in terms of moisture content and physical characteristics of the wood chips. MWF has its own Musmax drum chipper, and carries out all its own chipping operations to ensure the size range of the chips produced is consistent. MWF has a target moisture content of 26-30% for delivered fuel, and this is achieved by ensuring wood is stored off the ground and in exposed locations while seasoning, and then storing the chips produced in barns until they are delivered. MWF takes quality control very seriously, and has documented procedures for all aspects of production and delivery of fuel. A sample of fuel is kept from every delivery, and sealed in a plastic bag with the delivery details attached. The bags are then kept for as long as it will take for the customer to burn the fuel, allowing MWF to go back and check the quality of the sample if a problem should arise. About 15% of the fuel samples are tested regularly in any case, using an oven and scales to determine the exact moisture content.
If someone wants to get a wood-fuel boiler, they should find a good local fuel supplier first.
Simon Scot, Midlands Wood Fuel’s landlord and customer
To keep delivery costs and CO2 emissions to a minimum, MWF operates nine depots throughout the region, and is setting up new ones. Each depot is located near a supply of wood and as close as possible to a cluster of customers, so the delivery vehicles usually travel no more than 20 miles to reach them. Wood typically travels up to 25 miles from forests to a depot. The distance covered and fuel used by all MWF vehicles is recorded, allowing tight control over costs, and also enabling competitive pricing based on the distance of a customer from the nearest depot.
How much does it cost and how do users pay?
MWF typically charges about 3.2 p/kWh for wood chips, and 4.5 p/kWh for wood pellets. These prices compare to an average of 3.5 p/kWh for domestic gas supply, or 6.3 p/kWh for domestic heating oil supply. Domestic customers can therefore save money on fuel bills by switching from heating oil to wood pellets, although the capital cost for the boiler and fuel store would need to be factored in. Many organisations also want to make a contribution to reducing global CO2 emissions, and wood-fuel is often a good option to fulfil this goal.
MWF currently has just over 100 customers, about a quarter of whom are domestic and use wood pellets. The larger customers tend to use wood chip, and this represents the majority of MWF’s business. About half of MWF’s wood chip customers buy heat, rather than tonnes of fuel. This makes it simple for the customer to predict costs, without concern about fuel quality. It also gives MWF an incentive to supply high quality and thoroughly dried fuel, to maximise the heat produced and minimise delivery costs. However, it also allows for flexibility in times of high demand.
How is wood-fuel produced and supplied?
MWF has recently transferred its wood purchasing and seasoning operations to Nationwide Wood Fuel Ltd, a company set up by some of the MWF directors and investors. This has allowed MWF to avoid tying up capital in wood stocks, and let it focus on growing the business of delivering wood-fuel to customers. Although Nationwide Wood Fuel is financially responsible for the wood while it is seasoning, MWF continues to supervise the day-to-day operations of purchasing and storing the wood. This structure makes it easier to find finance for timber stocks, as it separates the commercial risks of timber purchase and supply operations.
Wood is bought in from landowners, forestry contractors and the Forestry Commission. All trees felled will have been covered by felling licences, which require replanting or management for natural regeneration. Much of the wood felled is from thinning operations, so is only suitable for fuel, pulp or fibreboard manufacture. Slab-wood, which is a byproduct of sawmills, is also bought in when available. After purchase, the wood is stored for a year to ‘season’, during which time the moisture content falls from over 50% to around 30%. Rapid seasoning is encouraged by storing logs off the ground on dry, windy sites and by encouraging forestry contractors to damage the bark on the trees while handling them, as this promotes the loss of moisture.
Wood-fuel? Fantastic, bring it on!
Jeff Jones, Assistant Manager, Oakengates Leisure Centre
After the wood has been seasoned, it is chipped using MWF’s Musmax drum chipper, which has a throughput of 15 tonnes/hour, and stored in barns on a concrete floor to prevent contamination with soil, stones or other materials. The wood-chip is ready for delivery straight away. MWF has three delivery vehicles, one which can tip fuel into stores or deliver hook-lift bins for customers that use them, and two which are able to blow wood chips or pellets down a delivery hose into a fuel store. Blowing the fuel in is important for many customers, as it allows them to site their fuel store where it is most convenient for them, rather than where a delivery vehicle can get direct access to it. Each delivery vehicle can carry up to 30 cubic metres of wood-fuel, equivalent to around 7 tonnes of wood chip or 14 tonnes of wood pellets.
In the financial year 2010/11, MWF delivered 5,253 tonnes of wood-fuel to its customers. About 75% of this replaced gas use, and the rest replaced heating oil. Replacing fossil fuels with sustainable wood-fuel cuts greenhouse gas emissions, because the forests where the wood is sourced from are replanted or naturally regenerating, so that the CO2 emitted when the wood is burned is re-absorbed over time. The total reduction in greenhouse gas emissions is about 3,700 tonnes/year of CO2. Better management of forests can also be beneficial for biodiversity.
Domestic customers switching from heating oil to wood pellets make a saving on their fuel bill, which can make easier for them to heat their home fully. Public sector customers will also be making savings compared to using gas once Carbon Reduction Commitment payments are factored in, freeing up money to spend on delivering services. In addition to the wood-fuel supply business, MWF staff have also been involved with the nearby Harper Adams Agricultural College, delivering lectures to students to help them learn about the wood-fuel supply chain.
Economic and employment benefits
MWF provides employment for nine people, five full-time and four part-time or seasonal. In addition to this, the business also supports jobs at 17 forestry contractors and a vehicle maintenance contractor, as well as casual work at the depots to carry out wood chipping. MWF has also been helping other organisations improve their employees’ skills, for example delivering CPD lectures on the use of wood-fuel to some of its corporate customers. For landowners and the Forestry Commission, having an additional market for forestry thinnings and other low-grade timber provides an additional income stream, and makes management of forests more economically viable.
Potential for growth and replication
As a reliable supplier of high quality wood-fuel, MWF has been gaining customers, sometimes at the expense of less well performing competitors. MWF estimates that it is currently supplying 90% of biomass boilers in its core area of business, but there is still room for growth in some of the surrounding areas. Further growth within MWF’s region of operation is likely in future, as more biomass boilers are installed, and further wood supplies are available locally, particularly if prices rise. The steady upward trend in the price of fossil fuels, the introduction of the Carbon Reduction Commitment and government policies such as the Renewable Heat Incentive are collectively making the use of wood-fuel a more attractive proposition for many organisations.
Suppliers like MWF are essential if the UK is going to increase its use of wood for heating, as prospective customers will want to be sure there is a good local supplier before they install a biomass boiler. Because the supply of wood-fuel is an inherently local operation, there are numerous suppliers across the UK, and room for new ones to start as the market grows. Current and new suppliers could benefit from taking on MWF’s approach to customer service and fuel quality.