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BDaily Business Network: Biomass for SMEs


It’s environment focus week on Bdaily, and we are looking at what the low-carbon economy really means for UK SMEs, as well as picking apart the nuts and bolts of adapting business to “go-green.” Here Andrew Nixon, managing director of P&H Energy Limited, a specialist in biomass fuelled boilers, shares his expertise in biomass and why SMEs might consider it as an energy source.

Biomass is a very attractive heating option for SME’s, especially those not on mains gas. The fuel savings combined with the Renewable Heating Incentive (RHI) make significant returns possible whilst also reducing carbon output. Burning wood is close to carbon neutral – the carbon released in combustion is the same as that absorbed by the tree in its lifetime. This can make a huge difference in the carbon footprint of a company.

The supply chain of both woodchip and wood pellets has improved dramatically over the last three years; as a nation we currently export more than half of our wood pellets to Europe. Woodchip can be produced and delivered by small, local businesses, enhancing rural economies.

Although a greater initial outlay than gas or oil systems, the RHI can allow fast payback within four to five years, and with 20 years RPI linked guaranteed returns it provides a very strong long term investment. There are many funding options available to help with the initial cost.

Fuel stores, buffer tanks and the physical size of the boiler itself make biomass a bulkier product - double the space is often needed. However, P&H produce stand alone ‘Biomass Cabins’ that contain all the components required into a single container, commissioned and craned into place. Straight forward, simple and cost effective.

It is essential that the installer taking on the project has a good understanding of biomass, especially with regards to how to size the boiler. We have a strong network of trusted, highly trained installers to ensure that the whole process is smooth and seamless, giving the owner many years of inexpensive, reliable heating.

Example investment and returns

Capital expenditure for similar output installations can vary greatly depending on the plumbing requirements - below are samples prices and returns (a full survey would be required for each installation).

97kW Wood Pellet System

Capital Expenditure: £55,000

Energy UseYearly: 180000kWh

RHI Income: £11692

Woodfuel Cost: £8831

Equivalent oil cost: £12000

Yearly saving: £14851

20 Yr return: £297,020*

194kW Wood Chip System

Capital Expenditure: £100,000

Energy UseYearly: 380000kWh

RHI Income: £23785

Woodfuel Cost: £13879

Equivalent oil cost: £25233

Yearly saving: £39213

20 Yr return: £784260*

*Subject to RPI adjustment

Here are some other environment focus articles that may be of interest to you: carbon reporting in logistics firms; what are the benefits of electric vehicles?; we talk to a print business about why SMEs need to go green; and find out how one innovative business is using ozone as a cleaning tool.