Socrates Erasmus Intensive Programme
INNO-FOREST
Bio-energy Project and Production of Wood-chips at the Regional State Forest Enterprise Levice
Lenka Hanusková
Zvolen, June 2005
1 Introduction
There were big changes in the Regional State Forest Enterprise Levice in the last year. The Biomass Centre came into being under the decision of Ing. Karol Vinša the Woods director general of Slovak Republic on 1st January 2005. The new Biomass Centre operates in all Woods companies in Slovak Republic.
The first aim is to take advantage of clear position in the energetic chips market. This aim is linked to unstable wood mass utilization. The next addition is supporting of wood protection activity.
The energetic production of chips was realized by workmen of the individual daughter branches in the previous years so it is very difficult to answer the question about the exact number of the production. For the comparison, in the new resent Centre 36 employees (technical and economic employees and workmen) deal with biomass work.
There was also a big confirmation in Slovak market by enlargement of costumer and supplier relation in the last year.
But the biggest problem of these days is that the state does not sponsor the energetic program from renewable sources.
2 Case enterprise
The forests managed by the Regional State Forest Enterprise Levice are situated in the southern part of Slovakia with low and fragmented forest cover. The area of managed forests is 30 000 hectares, with a significant proportion of inferior quality coppice of sessile oak, Turkey oak and black locust.
Forest stands managed by the enterprise are scattered on a territory of about 200 000 hectares. The enterprise consists of 6 forest districts, 1 logistic district, and 1 wood processing district. The enterprise manages also six hunting grounds and three pheasantries. The annual cut is about 100 000 m3, mostly of oak and black locust wood.
You know the wood chips represent an alternative ecological and renewable energy source. Their production at the Forest Enterprise Levice consists of the following elements:
O The high performance mobile chipping machine as a core technological element. The acquisition cost was 13 000 000 Sk (420 ths. EUR). Its annual processing capacity is 20 000 tons of wood with diameter up to 30 cm. Its 1 efficient use requires a minimum concentration of 700 – 800 m3 raw wood at one place. The machine is operated by two workers.
O The raw wood originates especially in the mean quality coppice stands of sessile and Turkey oak, and black locust.
O Produced wood chips are transported by truck in large-volume containers.
O Combustion of wood chips requires caldrons with gasifies installed by the customers.
Many orders were realized in 2004. The amount rose on the 21 000 tons of energetic chips. The Biomass Centre has realized the chips delivery with amount of 24 500 tons from January 2005 till the end of May 2005.
When we compare the amount of the chips delivery on the months, in 2004 there were realized 1 750 tons and in 2005 it is 4900 tons.
While in the last term the energetic chip delivery was only for one regional costumer (SEZ a. s Tlmače), these days they associate with costumers as Termonova, a. s. Nová Dubnica, Dalkia Vráble, Dalkia Poprad, Handlovská energetic, Martinská heating plant and with the cities as Kysucké Nové Mesto and Dolný Kubín. The commercial relations with Hungary are reinforced from 1 993, and there is also the association with Austria. The agenda is in progress with Poland and Czech partners.
3 Innovation case
Time Frame:
1993 – 1994 Production of wood chips for customers in Hungary,
1993 – 1994 Investment into a minor mobile chipping machines,
2000 - 2001 Investment into a bulk storage chipping machine,
2000 – 2001 Production of wood chips for the first major customer – Slovak Energetic
Engineering (SEZ) Tlmače, Inc.
2002 – 2003 Standardized production and sales of woodchips
2002 – 2003 Negotiations with new customers (schools, municipalities)
2003 Construction of heating stations combusting wood chips in the municipality of Levice
Organizational structure:
The innovation process has not had any fixed structure. The knowledge of available specialists was streamlined into a task-force. Flexible project organization structure was preferred.
Actors network analysis:
1) Company level:
- Management of the Forest Enterprise Levice – planning and implementing of project,
- General Directorate of the Forests of the Slovak Republic (and former Regional Directorate of the State Forests) – approval and co-financing of the project
2) Cooperation level:
- Slovak Energetic Engineering SEZ Tlmače Inc. specialized in the production of caldrons, gasifies and heating centers for biomass combustion. They operate a heating center using wood chips, being thus a major customer of the Levice Forest Enterprise.
3) Institutional level:
- State Forest Administration – approval of changes in the forest management plans
- State Environmental Authority – cooperation with the SEZ Tlmače Inc. in the improvement of emission originating in biomass combustion
- Forest Research Institute – expertise in project development, technological consultation, advisory.
4 Goals and future plans
Objective:
O To improve the efficiency of wood production at the Forest Enterprise.
O To enlargement of costumer and supplier relations.
O To build more compact net of the regional costumers from whole part of our country.
The first aim is to take advantage of clear position in the energetic chips market. The second aim is to build more compact net of the regional costumers from whole part of our country and with this move cut down the number of foreign costumers.
For this we need changes in legislation and incentive bonuses into regional projects ( to build the buildings for firing the energetic chips). ). The biggest problem of these days is that the state does not sponsor the energetic program from renewable sources. The gas and coal main position repress the application of differentiated repurchase energy from renewable sources.
The preferred and privileged energy repurchase from renewable sources exists in all surrounding countries as in mature countries of EU, but in Slovak Republic it is still a problem. This effect the repurchase of all energetic chips sources in frontier areas by surrounding countries instead of appropriate capitalize in home product.
But if the state doesn't establish differentiated energy repurchase, there will not be any progress and the future of this program will be questionable. The new business relation with abroad have a big addition but this program is going to be dropped out. Home product is mainly going to be sponsored.
The most reliable are the presentations of this problematic to public. There are seminars in different regions in Slovakia to show this problematic situation to all people.
These seminars are increasing the numbers of small and big costumers. The Center react on every suggestion where the frequent requests are guarantee deliveries for 10 to 15 years.
5 Analysis and evaluation
The main objective:
To improve the efficiency of wood production at the Forest Enterprise.
Background of Innovation:
O Surplus of a low quality wood with difficult marketing,
O Low market price of wood from the coppice forests,
O Long transportation distance to customers in the case of traditional wood assortments.
Challenges for the Forest Enterprise:
O The new trends in using of technology biomass for energetic proposes in Europe
O Following of forecast advancement consumption and prices of gas and electric energy
O Following of forecast about new markets for bio-energy
O New markets for own wood production
O Taking down operating costs
Primary Idea:
O Interest in energetic wood chips from Hungary starting 1993,
O The management of the forest enterprise has launched a long-term project aimed at the development of market for wood chips around the forest enterprise, which required:
1) Acquisition of expensive chip machine,
2) Investment to the reconstruction of existing or acquisition of new heating centers
suitable wood-chips’ combustion.
Problems:
O Necessity to convince the directorate general about the efficiency of the investment
O Continuous talks with potential customers over their investment in heat generation from wood chips
O Absence of a state support program and minimum interest of state institutions.
O Necessity either to modify forest management plans or to obtain approval of the State Forest Authority with exceptions from valid management plans.
O Fire damage to the chipping machine in 2001.
Results and Benefits
Direct Economical Benefit:
O Improved profitability of forest management thanks to highly efficient investment into the chipping machine,
O Higher prices of wood chips as compared with the pulpwood,
O Shorter transportation distance and costs as compared to the pulpwood,
O Long-term stability of the sales at expanding market.
Indirect Benefits:
O Improved, more regular management of forest stands thanks to stabilized wood sales,
O Reduced emission of pollutants in SEZ Tlmače,
O Successful practical example of multisectoral development, including research
O Sound regionally-based demonstration about energy generation from wood for the State Forests as well as the forest sector of the Slovak Republic.
Fostering Factors:
O Ability of the management to accept certain economical risks related to innovation at the Forest Enterprise.
O Presence of the Slovak Economic Engineering SEZ Tlmače, a major producer of energetic installations including those for biomass combustion, operating its own heating center combusting wood chips.
Impeding Factors
O Absence of the state support policy and financial frame for bio-energy generation.
O High introductory costs.
6 Conclusions
This case study demonstrates the high market potential of energy generation from forest biomass. The market with energetic wood chips is under-developed in Slovakia, with some exceptions at the regional level. It has a potential to multiply in the future, however.
The innovation impulse and the process of innovation reflect relatively stable situation in the state forests, and it can therefore be taken as smoothly implemented. Throughout the study, the absence of state support policy for bio-energy and sound investment support for renewable energy has been stressed.
The involved employees of the forest enterprise disseminate their experience and knowledge about the production and use of energetic chip wood in the forestry sector as well as in their region. They established cooperation with institutional system including the Forest Research Institute, Local Government and State Forest Authority.
The whole target analysis has to be taken in global and it has to have all additions which this technology brings. It is also contribution to employ people from different regions.
You can feel my individual opinion in forestry innovation and in Slovak Republic in this study. The current Center achieved the monthly bookings increase up to 37 %. The seminars, communication skills, kindness and help of workers help to this increase as well. I can state that this innovation has a big addition on Slovak market and I believe that this corporation will be in as good activities as it is now.
Contact – Enterprise:
LESY SR, š. p.
Stredisko Biomasa
Koháryho č. 2
934 01 Levice
SLOVAKIA
tel: + 421 (36) 630 42 00
e-mail: