D17 REPORT on training week in Finland · 2014-08-11 · Training week report Finland 3 Preface This publication is a part of the AFO-project (Activating Private forest Owners to

Activating Private Forest Ownersto Increase Forest Fuel Supply

IEE/08/435/SI2.529239

D17

REPORT on training week in Finland

Jyrki Raitila, VTT; Matti Virkkunen, VTT; Martti Kuusinen, TAPIO

Date: November 2011

Training week report Finland 1

Content

PREFACE ......................................................................................... 3

1 SELECTION OF TRAINEES ............................................................... 4

1.1 Selection process ........................................................................ 4

2 TRAINING TOPICS AND RESULTS – FINLAND .................................... 5

2.1 Session 1: Introduction ............................................................ 52.1.1 Bioenergy development in Finland ........................................... 5

2.2 Session 2: The biomass production chain ................................... 52.2.1 Overview on harvesting and conversion technologies and relatedcosts, .......................................................................................... 52.2.2 Study tour 1 ......................................................................... 6

2.3 Session 3: Business models in Finland ....................................... 72.3.1 Case studies of wood fuel supply businesses in Finland .............. 72.3.3 Study tour 2 ......................................................................... 9

2.4 Session 4: Working groups: Developing business ideas/cases ..... 12

2.5 Session 5: Working groups with face to face meetings: Workinggroups share their business ideas. .................................................... 122.5.1 Study tour 3 (TAPIO) .............................................................. 12

2.6 Session 6: Woodfuel projects in target regions .......................... 132.6.1 Working groups continue (VTT) ............................................. 13

3 FEEDBACK .................................................................................... 14

4 LETTERS OF COMMITMENT ............................................................. 14

APPENDIX ....................................................................................... 15


The sole responsibility for the content of this report lies with the authors.It does not necessarily reflect the opinion of the European Communities.

The European Commission is not responsible for any use that maybemade of the information contained therein.


PrefaceThis publication is a part of the AFO-project (Activating Private forest Owners to Increaseforest Fuel Supply - IEE/08/435/SI2.529239, www.afo.eu.com) funded by the EuropeanUnion’s Intelligent Energy Programme. The AFO-project is coordinated by VTT, TechnicalResearch Centre of Finland. The other partners are Forestry Development Centre Tapio(Finland), Technical Center of Forest, Wood Products and Furniture (France), Institute forForestry Development IDF-CNPPF (France), Forestry Commission (UK), South YorkshireForest Partnership (UK), Energy Restructuring Agency (Slovenia), BIOENERGY 2020+ GmbH(Austria) and Environmental Projects State Ltd (Latvia).

AFO's main objective is to increase wood fuel supply from privately owned Europeanforests. In terms of EU-level bioenergy promotion, private forest owners (PFO's) form aconclusive forest owner group, as they possess most of the European wood energypotential. AFO carries out various activation procedures to initiate wood fuel supply clustersamong PFO's. These clusters are brought together with the potential energy wood users,focusing on local small- and medium scale heat plants.

The project operates during 2009-12 in six countries and five specific target areas. Finlandand Austria are countries of high wood fuel utilization level and strong experience ofbioenergy harvesting and procurement systems. Best practices are transferred from thesecountries to less experienced partner countries with vast private forests ownership (France,Slovenia, Latvia and UK). Results and best practices acquired in the project will bedisseminated throughout all EU member states.

This report documents the training week on establishing local woodfuel supply chains inFinland held in frame of the AFO project on 3rd – 7th October 2011 in Jyväskylä (Finland).From each of the target regions, 3 up to 13 delegates have been selected, who should gainpractical guidance for organising the whole supply chain from forest management andharvesting to the operation of small- and medium-scale heating plants.

VTT and Tapio, November 2011

http://www.afo.eu.com)


1 Selection of trainees

1.1 Selection process

The target group of the training week was defined as persons who should play a leading rolein a cluster for the running of a woodfuel supply business in detail the target group includes:woodfuel suppliers, users, cluster facilitators, key actors from woodfuel service companies,supporting local authorities etc.

Among the project partners it was agreed that French stakeholders will go to Austria(instead of Finland) and Latvian stakeholders to Finland (instead of Austria) for the trainingweek because the situation in France is more comparable to that of Austria and thesituation in Latvia much more similar to that of Finland. It was agreed that it will benecessary to translate the training week sessions for the bigger group of 9 Latvianstakeholders. Therefore Maira Jegere from the Latvian project partner organization tookpart in the training week and translated the presentations to Latvian. Costs foraccommodation, meals, training materials and transport during the training week wascovered by VTT’s budget. Travel for 8 Latvians was included in the budget of VP. In addition,4 delegates from the UK, one from Finland and one from Latvia also took part at their ownexpense. However, VTT’s budget allowed more people to participate in the training weekand therefore accommodation and meals of the British participants was paid by VTT.

In order to guarantee a fair and transparent selection process, it was agreed that eachcandidate has to fill out and sign a Letter of Commitment and the form „Participant´sprofile“.

Based on this, VP and SYFP have evaluated the candidates´ suitability to attend the trainingweek. Candidates were contacted and selected during the 4.2 sub-regional workshops,regional woodfuel events, through advertisements and announcements of the training weekand especially through personal contacts.

Finally, the following number of participants was chosen and participated at the trainingevents:

9 Latvian delegates and 1 project partner delegate from Latvian partner Vides Projekti

2 delegates from South Yorkshire, UK, 2 delegates from Wales, UK

1 delegate from the University of Jyväskylä


2 Training topics and results - FinlandThe programme and topics of the training weeks is described in the following. Respectivepresentations and other materials are provided directly on the AFO webpage. Below, eachsession topic and description of contents the main results and discussion points aredocumented in boxes or tables.

2.1 Session 1: Introduction

2.1.1 Bioenergy development in FinlandMonday 3rd October evening at Hotel Alba, Jyväskylä

The aim of the aim of session 1 was to present the bioenergy situation and development inFinland. TAPIO was responsible organization of Session 1. Two presentations were givenunder following topics:

Development and present use of bioenergy in Finland, TAPIODrivers and formation of the bioenergy sector, TAPIO

Results and discussion in session 1:Main discussion points:

Why energy use of wood has increasedSources of energy woodHarvesting intensityHarvesting equipment, storage examples, best practises from Austria

Country relevant issues:Different initial situation in case of availability of wood and wood fuel products especiallyfrom the UK with low wood area (6% natural forest, 11.8 % total with short rotation forestsExamples of sustainable and ecological forestry showed them the Finnish way of forestry.Conclusion:Main reason for the training week is the existing information gap in the involved counties.Although all information and solutions cannot be directly adapted to the target areasFinland will show best practice examples.

2.2 Session 2: The biomass production chain

2.2.1 Overview on harvesting and conversion technologies and related costs,Tuesday 4th October morning at VTT, Jyväskylä

The aim of the session 2 was to present different supply chains and stages of woodfuel supply chains. Also techniques for measurement, treatment, quality control andstorage were given. TAPIO had the main responsibility of the organization of Session 2.Eight presentations were given under following topics:

Forestry in Finland, Forestry Centre Central Finland


Harvesting technologies, VTT

Wood treatment (chipping, drying etc.), TAPIO

Wood fuel measuring ,TAPIO

Wood fuel transportation, TAPIO

Environmental and silvicultural impacts, TAPIO

Quality control, TAPIO

Biomass storage, TAPIO

Results and discussion in session 2:The presentations given by Forestry Centre Central Finland, VTT and TAPIO showed thetechnologies and machines that are used in Finland. Information on wood fuel measuringand environmental impacts of wood fuel harvesting was also presented.Main discussion points:

Management of Finnish forestsHarvesting technologies for different sources of wood fuelWood fuel transporting, processing, storage and quality controlDifferent payment possibilities (€/bulk m3 and moisture content; €/MWh; €/ton(absolutely dry); €/solid m3; €/wet ton;

Country relevant issues:Costs of harvesting, felling, delivering and chippingFuel criteria (size; water content like fresh, seasoned or dry; ash content)

Conclusions:In case of LV: wood chips is largely exported due to low home market pricesIn case of UK: due to the low forest coverage of 6% natural forest the activities of usingbioenergy are low and take place only in some small regions. Very few forest owners withsubstantial forest areas

2.2.2 Study tour 1Tuesday 4th October afternoon in Petäjävesi, Central Finland

The aim of the study tour 1 was to give an example of mechanized harvesting on atechnically challenging young forest tending site and to show the operation of a large scaletruck based chipper in operation. TAPIO was responsible for organizing study tour 1.

Supply chains of wood fuel:

Wood felling in young forest tending with harvester

Large scale chipping of delimbed stems

Results and discussion in study tour Tuesday:


Harvester on a young forest tending

Truck based chipper in operation

The first location on the study tour 1 was a young forest improvement site whereagricultural land had been taken over by broadleaves and later followed by spruceundergrowth. During the felling broadleaved trees were removed creating more growingspace for spruce undergrowth. The harvesting machine was an old Valmet 911 operated bythe machine owner. The speciality on this site was that the driver was paid on hourly basis,whereas normally drivers are paid according to production, by hectares or by removedvolume. The hourly basis of payment was due to the extreme difficulty of creating a goodquality remaining forest.

The second location was a road side chipping area where a track based LHM-chipper waschipping delimbed trees from first thinning area. The LHM-Chipper has an impressivecapacity of producing 120-200 loose m3 of chips/hour.

2.3 Session 3: Business models in Finland

2.3.1 Case studies of wood fuel supply businesses in FinlandWednesday 5th October morning at VTT, Jyväskylä


The aim of session 3 was to clarify the role of forest management associations in Finnishforestry and to give two examples of different business setups for wood heat supply. Also acompany focused merely on fuel supply (Vapo) was introduced. VTT was responsible forsession 3.

Forestry associations as PFO umbrella organisations for wood fuel supplyMHY (Petri Takalo, Forest management association Päijänne)

Forestry service providersMetsäpirkka (and Vakkalämpö) (VTT)

Co-operative models, i.e. PFOs as shareholders of heat, CHP or district heating plantsEno energy co-operative (Urpo Hassinen, Forestry Centre NorthKarelia)

Contracting to create steady demand for woodVapo (VTT)

o Idea, drivers and formation of the supply clustero Development of cooperation agreements/ contracting

Initialising and driving forcesBusiness parties involvedNegotiations and integral parts of the contract, examples for supplycontracts

o Management and daily business of the organisationo Financing, supporters and (business) partnerso Strengths and weaknesses of the model

Economy of wood heat business (VTT)o Investment costso Pricing of wood fuelso Operating costs of bioenergy plantso Price of heat and revenues from heating businesso Funding investmentso Sample calculation

Contracts between PFOs and users of wood fuel (VTT)o Practical checklist

Results and discussion in session 3:Two external experts Mr. Petri Takalo from Forest management association Päijänne andMr. Urpo Hassinen from Eno Energy cooperative were invited for a presentation anddiscussion.Main topics:

Organisation structure and services of the Forest management association PäijänneServices which are provided by Eno energy cooperativeDetail information about biomass trading (logs and energy wood) and targetsQuality issues und supply chain (gap between production in summer and use in winter)


Reasons for establishing a district heating plantCosts and price structure (long term experiences with low price level of oil and energy inthe beginning)Operation and maintenance of boiler and grid (problems, experiences and advices)Subsidies and financial criteria and price index

Main discussion points:Prices, customer contracts,Management of old and new contracts, extension – replacement with all individualcustomersPrice indices (wood fuel, energy index, heat index, consumer index, fossil fuel index)Different organisation structure of cooperatives including background information

Conclusions:Importance of detail business concept beginning from raw material up to delivered heatto the end consumerEstablishing of organisation structures like forest management association, harvestingcooperation or service provider

2.3.3 Study tour 2Wednesday 5th October afternoon at Muurame, Joutsa and Toivakka, Central Finland

The study tour 2 focused on medium sized heating plants and heating entrepreneurship.Three different district heating plants were presented during the afternoon. VTT wasresponsible for organizing study tour 2.


The main target of this study tour to show 2 heating plants with different biomassprocurement solutions.

Muurame district heating plant

The first location was a heating plant operated by Muuramen lämpö oy (ltd). The plantoutput is 4 MW and the used fuel is peat and wood chips. The plant supplies heat forMuurame municipality area through a 6 kilometer district heating grid. The total heatedvolume is 309, 000m3. The initial investment cost of the plant was 1.3 M€.

Chip storage at the Joutsan Ekowatti plant

Second we visited Joutsan Ekowatti Oy (Ltd.). The company was established in 2004 drivenby a need for a new heating system with a cheaper and predictable fuel price compared tolight heating oil.

The vast majority of wood fuels are procured by Metsäpirkka Ky, one of the owners of theheating company. Metsäpirkka is a forest service company offering services to forest ownersfrom afforestation to logging. Their main emphasis is on manual logging and tending ofyoung forests, so wood fuel from precommercial thinnings is easily at hand. Wood residuesfrom the door and window frame factory are also used in the heating plant. Metsäpirkkaemploys about 20 timberjacks involved in manual logging and other forest operations, e.g.


afforestation. Manualfelling methods are mostly used in seedling and young forest tending. A chainsaw withfelling frame is a suitable option for small wood felling and bunching. In order to reducecosts and increase the productivity of small wood harvesting, many different mechanisedfelling methods have been introduced. The general trend in small wood felling is thatseveral trees are processed simultaneously by using accumulative felling heads. It is possibleto use these felling headswith many different base machines, including farm tractors, excavators and harvesters.Whole trees are stored at a road side at least over one summer and then chipped there witha mobile chipper. A sample of each chip load is taken and moisture content of chipsmeasured at the delivery of wood chips. The provider is paid based on the energy content ofthe chips (e/MWh).

The boiler output is 1 MW. Used fuel is wood chips 95% (80% from forest, 15% from woodresidues), in addition 5% light heating oil is used. Heated building volume is 25,000 m3 andannual heat production 4,000 MWh. The initial investment cost was 500,000 €. Operationstarted 2004.

In addition to plant visit also a manual energy wood harvesting site was visited.

Chip storage in Toivakka at Vakkalampö district heating plant

The third location on study tour Wednesday was a local district wood heating system inToivakka, a small rural town with 2,400 inhabitants. The operating of the plant is outsourcedto a local co-operative that also provides wood chips. This co-operative consists of threefarmers and a forest society. The Toivakka heating plant uses wood chips made from smallwood from clearings and thinnings. Oil is used only during servicing of the main boiler andas a back-up fuel if problems occur with feeding or combustion of wood. The heating plantwas built in 2002 by an initiative of the municipality to decrease costs of heating ofmunicipal buildings. The boiler output is 0.7 MW. Local forest management associationsupplies 80 % of used wood fuel. The rest is supplied by cooperative member farmers.Annual heat production is 2,500 MWh. The initial investment costs were 250,000 €. Theoperation started in 2002.


2.4Session 4: Working groups: Developing business ideas/casesThursday 6th October morning at VTT, Jyväskylä

The aim of session 4 was to start work in groups for creating real or imaginary businesssetups based on the information distributed on the previous sessions. Three groups wereformed from the training week participants. VTT was responsible for sessions 4 and 5.

Working groups of regional stakeholders, project partners and Finnish experts are set up.Together they develop an outline of concrete business ideas consisting of the followinginformation:

Location, forest biomass potential and fuel demand, involved PFOs, existingorganisation structuresGeneral business/ supply idea, drivers and supportersApproach for business modelDriving forcesBusiness parties involvedLegal form and practical organisation of the business modelAreas of operationFinancing of the business

2.5 Session 5: Working groups with face to face meetings: Working groupsshare their business ideas.

Where are we now? What has been done so far?What are the scope of the project and the areas of business?What are the next steps?What issues have to be faced?What financial models suit best to the planned wood fuel business?

Three group works were created by the participants. Two teams from Latvia created theirbusiness ideas and one group of UK participants created their own. At this point the workwas still in progress and the work on the business ideas was continued on Friday.

2.5.1 Study tour 3 (TAPIO)Thursday 6th October afternoon at Jämsänkoski and Jämsä, Central Finland

The study tour 3 presented logging residue harvesting and stump lifting. A large bioenergyplant and its logistics and processing facilities were also seen during the afternoon. A smallfarm scale wood heat application was seen on the last visit of the day. TAPIO wasresponsible for the organization of study tour 3.

Stump pulling applicationsLogging residuesLogistics and processing


Visit to UPM Jämsänkoski bioenergy plant 205 MW (woodfuel delivery andprocessing)Visit to Uusi-Yijälä farm (uses wood chips for heating)

Forwarder unloading logging residues to a roadside storage

First location was a logging residue harvesting site where a forwarder was transportinglogging residues to a roadside storage.

Second location was 205 MW UPM Jämsänkoski bioenergy plant. We were given apresentation about the power plant and its connection to the TMP pulpmill and papermill.We were able to see the whole boiler construction and fuel receiving facilities andintermediate storages and conveying systems.

Excavator lifting spruce stumps

Third location was a stump lifting site where excavator was lifting stumps from a sprucefelling site.

The fourth and last location was an old wood heated farmhouse that is used as a restaurantand as a hotel. The farm house is heated mostly with woodchips but at the time of our visitit was running on low quality grain.

2.6Session 6: Woodfuel projects in target regions Friday 7th October morning at hotel Alba, Jyväskylä

2.6.1 Working groups continue (VTT)


The aim of the session 6 was to finish the group works started on Thursday and to orally andvisually present the created business ideas to the group. During the last two hours of thesession 6, three presentations were given by the participants. VTT was responsible fororganizing session 6.

Presentations were created and discussed. Active discussion rose on suitability andpossibilities of adapting of the business ideas for wood fuel businesses in different targetregions.

The titles, group participants and basic drivers of the business ideas were:

1. Moss village JSC:Rolands Rud tis, Dainis L kins, J nis Gredzens, Zigm rsTrapencieris

2X4MW district heating plant owned and operated by Moss villageinhabitants

2. UK biomass supply takeover: S Purkiss, P&J Bottoms, K Warren, M TaylorWoodheat business with 200 – 500 kW boilers expanding to total output of 5MW over 5 years period

3. J muiža municipality: Madars Kalni š, Ernests Ikaunieks, Ingus Andersons,Lauris Zilveris, Zigm rs Neimanis

2 MW wood chip heating plant to a 600 resident village (ltd)

(See slide presentation on basic details of created group works on annex 3)

3 FeedbackFeedback forms were collected from participants during session 6.(See slide presentation on the summary of received feedback on annex 4)

4 Letters of Commitment(See annex 5)


AppendixAnnex I: Invitation letters/ announcements(copy/ screenshot from websites etc.)


Annex II: Participation List – Participating stakeholders in training week Finland (Latviandelegates, other countries) and Austria (French, UK, SL delegates)



Annex 3: Group worksBasic details of created group worksAnnex 4: Training week feedbackSummary of feedback from participantsAnnex 5: Letters of CommitmentSigned LoCs from training week participantsAnnex 6: Training week press releaseTraining week press release on Vides Projekti websitehttp://www.videsprojekti.lv/lv/jaunumi/4364/

http://www.videsprojekti.lv/lv/jaunumi/4364/

Supported by the European Commission under the Intelligent Energy - Europe Programme

Activating Private Forest Owners to Increase Forest Fuel Supply

Training week FinlandGroup works

Matti Virkkunen, VTTLjubljana, Slovenia 11.10.2011

Training week Finland

9 visitors + Maira from Latvia4 Visitors from UK1 Visitor from the University of Jyväskylä+ Jyrki, Martti & Matti

Presentations group works and lectures in mornings (3),study tours (3) in the afternoons

On last morning group work presentations and feedbackcollection from participants

IEE/08/435/SI2/529239 AFO2

Training week outcome: group worksThree group works:

1. Moss village JSC:Rolands Rud tis, Dainis L kins, J nisGredzens, Zigm rs Trapencieris

2. UK biomass supply takeover: S Purkiss, P&J Bottoms, KWarren, M Taylor

3. J muiža municipality: Madars Kalni š, Ernests Ikaunieks,Ingus Andersons, Lauris Zilveris, Zigm rs Neimanis

IEE/08/435/SI2/529239 AFO3

1. Moss village JSC

2 x 4 MW plant owned and operated by Moss villageinhabitants (1550)

Customers: Inhabitants from blocks of flats, private homes,school, kindergarden, municipality house

Fuel supply: 32 000 solid m3 of fuel used annually, suppliedby inhabitants, from 50 km radiusInvestment 3,6 MeurEstimated fuel cost 11,74 €/MWhOperational costs: 215 000Price of sold heat: 56,84 €/MWh

IEE/08/435/SI2/529239 AFO4

UK biomass supply takeoverWoodheat business with 200 – 500 kW boilers expanding to totaloutput of 5 MW over 5 years periodExample of 5 x 200 kW boilers

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number cost/unit TotalInvestmentFuel stock 1000 25 25000Truck 1 20000 20000Blower 1 15000 15000

6000000

Operating 0boiler lease 5 12000 60000rent 1 15000 15000fuel 1 24000 24000driver 1 25000 25000Chip 1100 7 7700Timber 1100 30 33000

164700income 0

0kWh produced 1 2640000 2640000Feed in tariff 1 184800 184800Income from heat supply 1 158400 158400Service Charge 5 7500 37500

380700

Profit 216000

UK biomass supply takeover

Woodfuel demand 3300 m3 loose/a delimbed roundwood/ 1MW

Investment costs [€]:60,000

Costs of fuel supply [€/t]:144

Operating costs [€/a]: 164700

Feed-in tarifs? 184800 €/a (7 pence /kWh produced)

Revenues from end-user energy use? 158400 €/a

Service revenues: 5*7500 = 37500

Profit (€/a): 216 000€/a

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muiža municipality2 MW wood chip plant to a 600 resident village (ltd)Heat demand 5000 MWh, customers 6 residential houses,preschool, primary/secondary school

Fuel demand [t/a]: 6750 loose m3 or 2700 solid m3 per year

90 % of woodfuel supplied by the co-operative running theplant 10 % external supplyWood fuel price 12€/ m3 looseEnergy supply costs: 162300 €/aIncome from heat sales (5000MWhx50): 250 000 €/aRevenue: 87 700 €/a

IEE/08/435/SI2/529239 AFO7

Supported by the European Commission under the Intelligent Energy - Europe Programme

Activating Private Forest Owners to Increase Forest Fuel Supply

Training week FinlandFeedback

Matti Virkkunen, VTTLjubljana, Slovenia 11.10.2011

Training week Finland

9 visitors + Maira from Latvia4 Visitors from UK1 Visitor from the University of Jyväskylä+ Jyrki, Martti & Matti

Presentations group works and lectures in mornings (3),study tours (3) in the afternoons

On last morning group work presentations and feedbackcollection from participants

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3

Feedback

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Feedback

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5

Feedback

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6

Feedback

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Feedback

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Feedback

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Feedback

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Other Feedback

In general study tours were found useful, especiallycomments from harvesting company employees were liked

Covered chip storages were not seen in Finland (in UK this isa big question), whereas in Finland chips are usually notstoredMore technical info on boilers and harvesting machinerysolutions needed

Log boilers and manual harvesting were not seen

IEE/08/435/SI2/529239 AFO10

Documents

D17 REPORT on training week in Finland · 2014-08-11 · Training week report Finland 3 Preface This publication is a part of the AFO-project (Activating Private forest Owners to