Serbia: Pellets consumtion and demand increases

Published on 25. September 2013., News Serbia Energy

The pellet price increases, but in spite of this its demand grows. Consumers who heat larger areas and who used coal or firewood, increasingly decide for pellet. During one year five new factories for the fuel pellet production were opened in Serbia.

Until now, the heating on pellet was the cheapest. Although pellet ton is by 15 to 20 percent more expensive than last year, demand is larger. Consumers say that they could sale even ten times more. With demands growth also increases the number of the pellet factories. For just a year, five factories were opened.

Until last year, almost the entire production was placed in export, while this year almost half of the pellet production was already sold on the domestic market.

Pellet is, above all, a clean energy source. Practically burns all, because from one ton remains ten kilos of ash. Although increased in price, it is still a cost-effective for heating.

Professor of the Faculty of Forestry in Belgrade, Branko Glavonjic,  says that pellet is very competitive to the gas and fuel oil, which is much more expensive than pellet, but is not competitive to coal and firewood.

“Considering that the pellet is very comfortable fuel, and, compared with other fuels, has many advantages, which was one of the reasons why many households decided to traverse to pellet and replace their boilers”, says Glavonjic.

Sales of boilers and pellet furnaces is by ten percent higher than in the previous year, and at stocks say that the sale of this fuel goes great.

Sasa Petrovic from coal stock “Belgrade” says the interest in the pellet increased in the last two years.

“Pellet is bought by those who are heated from 120 to 200 square meters and more. Mostly they are larger consumers who used either coal or firewood”, said Petrovic.

Pellet need to buy at the end of the heating season for next winter, because then is the cheapest. In late April, the factory price of pellet was 135 to 140 euros per ton, and now cost up to 180. At stocks it costs about 210 euros.

This business is very profitable, so it is not surprising that there are more and more pellet manufacturers on the Serbian market. Last year there were 16 pellet plants, and this year 21has already been registered.

Production start is expensive, but it is quickly pay out. Although competition grows, pellet prices do not fall.

Professor Glavonjic explains that one of the reasons for the relatively high pellet price is increase in wood material price.

“In Serbia, significant competitors to the pellet manufacturers are plants for the wood panels and plywood production. They use the same starting raw material as well as pellet manufacturers, which of course greatly affect the price increase of raw material”, says Branko Glavonjic.

The best for the pellet production are remains of beech, poplar and conifer, and Serbia has great wood potential. That can largely replace imported fuels to our country, but it is also a chance for export.

Last year, the state earned 7.5 MEUR from pellet export, which is by13 percent more than 2011. European countries spend 80 percent of world pellet production.

Source; Serbia Energy