Wednesday 22 November 2006

Cold comfort for heating eco-warriors

Cold comfort for heating eco-warriors

BAH humbug! Ireland's only wood-pellet manufacturer has cancelled Christmas deliveries, telling hundreds of its customers it can't provide the eco-friendly fuel until the middle of January.

Balcas, a Fermanagh-based company that produces pellets for use in stoves and boilers, says it has been caught off guard by a surge in demand for the fuel after a grant scheme was launched last March. Householders were paid 4,200 to switch from gas and oil-powered central heating systems to the renewable fuel.

“We have 250 people on a waiting list for loose bulk pellets that we can't accommodate, and so have put a freeze on new customers until at least the middle of January, said Peter Kernohan of Balcas. We just can't keep up with demand.

While some householders who switched to wood-pellet heating systems retained their oil- or gas-fired boilers, those in new houses or who dispensed with their old system are facing a cold Christmas. New customers switching to wood pellets between now and January will also be affected.

More than 4,000 people in Ireland have applied for the grant. The pellets are made from compressed sawdust from timber grown in sustainable forests. They must be kept in a weatherproof boiler or hopper and are delivered by lorry. Pellets are blown into the boiler system through a tube. A tonne lasts about as long as 500 litres of heating oil but, at a cost of 160, it is only half the price if bought in bulk.

Balcas claims Sustainable Energy Ireland (SEI), a state agency that oversees the Greener Homes Scheme, should have alerted it to the uptake. Balcas produces 50,000 tonnes of pellets a year but has only two trucks capable of delivering the fuel.

Each truck can only make three or four deliveries a day, so there's a huge shortfall, said Kernohan. The pellets have to be delivered under specific conditions, so we can't just convert an animal feed truck.

He says if Balcas had been forewarned it could have invested in extra trucks. These are imported from Germany at a cost of 200,000 each.

David Taylor, chief executive of SEI, said there had been no direct contact with manufacturers and that the success of the scheme was consumer-led and could not have been anticipated. “The response has been so strong that we expect traditional-fuel suppliers to enter the market. The supply will soon gear up, he said.

Briain Smyth of Irish Pellets in Co Meath has tried in vain to import pellets from abroad to meet the deficit.

“The situation in Ireland is not helped by the fact that there's a global shortage and most countries are consuming their own capacity. A similar situation arose in north America last year just before Christmas, he said.

Manufacturers of wood-pellet boilers report that they are selling up to 50 systems a week. Gerkros, a company in Co Tipperary, switched its factory to 24-hour shifts recently to meet demand. We've sold over 1,000 units since March and we've just acquired an extra 30,000 sq ft of factory space to expand our operation, said Ger Crosse, its managing director.

Sean Moncrieff, a presenter on NewsTalk 106 radio station, is one of the new wood-pellet boiler-owners who has witnessed the technology's teething problems.

They say that wood-pellet boilers have been around 30 years but they haven't been around in Ireland and the only pellet manufacturer is swamped. The delays have been a headache,” he said.

Suppliers claim the 4,200 grant is responsible for the buying frenzy. initially, the grant was supposed to be for about 2,500. The boilers cost from about 5,500, so that would have been a reasonable figure, covering about half the costs for a basic model, one supplier said. But a grant of 4,200 is overly generous and has led to inflated demand in the short term.

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