Already, the waste wood sector is facing a shortage of supply in some areas (see letsrecycle.com story).
Demand for refuse derived fuel (RDF) is “firm” and there are now growing expectations that it will start to increase this autumn into winter, even if most orders have already been placed.
The growth in demand comes against a background of reports that some fuel bunkers for EfW plants are running with low stocks of waste in Germany. Consequently, RDF exports from Germany to countries such as southern Sweden and the Netherlands are under pressure.
In light of the demand for feedstock, gate fees for RDF on the continent are expected to reduce this autumn and into winter, especially if the weather turns particularly cold.
Already, some plants – especially in Sweden – have absorbed some of their internal costs, including the energy import tax, in a bid to keep gate fees competitive.
Now, with higher prices for heat and electricity alongside an urgent need to ensure plants have a sufficient RDF supply line, gate fees could edge down.
However, large reductions in the export market prices from the UK because of lower gate fees on the continent seem unlikely. Exporters point to the higher costs they face. These include for shipping and logistics generally, as well as the ending of red diesel and higher energy and labour costs. So, any softening in plant gate fees, sector experts say, may not be seen to the full extent in the UK market.
What is clear is that there will remain good demand for refuse derived fuel
- UK-based RDF exporter
“What is clear,” said one exporter, “is that there will remain good demand for refuse derived fuel. Prices will be below UK outlets, especially landfill, and spot prices for UK EfW.”
UK EfW plants are said to be busy, with one major plant operator said to be operating at 100% committed capacity rather than allowing for some spot tonnage.
UK plants are under pressure to maintain output in the coming months in the face of potential shortages of gas which could disrupt electricity generation.
The importance of the UK’s EfW sector and the domestic biomass sector using waste wood is evident in the number of homes served.
For example, in the EfW market, Viridor alone says that this year it will produce 2,315GWh of electricity, which is sufficient to power the equivalent of 634,248 homes.
The Wood Recyclers’ Association (WRA) yesterday (3 October) said that the waste wood biomass sector had capacity to serve 840,000 homes.
The WRA said that its ‘recovery’ members “play a critical role in the UK’s bid to achieve independent energy security. The waste wood biomass sector has the capacity to generate 470MW of low carbon baseload power for the UK, equivalent to 3.3TWh (3,300 GWh) per annum, supplying enough reliable power for 840,000 UK households and accounting for 1% of annual UK power consumption.”