Woodfuel Supply Chain Design Study

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Wood Fuel Supply Chain Design Study for Reigate and Banstead Borough Council

Prepared by Julian Morgan-Jones and Bruce Norgrove

for Raymond Dill and David Sowe R&B BC

February 2008

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Contents

• Executive Summary

• Engagement Objectives and Methodology

• Background and Opportunity for R&B BC

• Assessment of Local Demand

• Assessment of R&B BC’s current production and supply capability and capacity

• R&B’s Own Supply Chain Options and Costs

• (Detailed design for selected option - TBD)

• Recommendations and next steps

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Executive Summary

• To be completed after draft discussions

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SEWF Engagement Objectives and Methodology

Objectives• To identify R&B BC’s own wood fuel volumes, capability, capacity with the aim of developing a design for R&B BC’s own wood fuel supply chain and

detailing the costs and benefits for doing this.

Methodology• An assessment of background, known demand, R&B objectives for wood fuel was conducted in meetings with Raymond Dill and David Sowe and the

SETG• Assessments of R&B own production capability and capacity was conducted in interviews with representatives from R&B BC’s Parks and Countryside

department and with contractors used by them for managing parks and heath lands. Information on woodland management and potential wood volumes came from a separate study for R&B BC by Bioregional.

• Assessment of recovered wood capacity and capability was conducted through interviews with BritaniaCrest Waste recycling• Analysis of findings was conducted with reference to forestry commission and other industry standards for each production and capability element• Options were presented and discussed with the study sponsors before finalisation of this document

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Background, Objectives and Opportunity

There are a number of drivers supporting the increased use of renewable energy within the South East. Critical amongst these are rising fossil fuel prices, increasing awareness of energy security as a long term issue and climate change in the form of governments carbon reduction targets. These targets are increasingly being reflected in regional plans for housing and construction such as the South East Plan and specifically for the purposes of this study for the area know as the “Gatwick Diamond” as well as in local planning requirements and building codes. This applies equally to R&B’s own progressive planning policies for 10% of energy requirements of all new construction to be derived from renewable sources from March 2008. As early as October 2005, as part of R&B BC’s own sustainability objectives, Biomass was being seen as a key contributor to the increase of renewable energy within the region [1]. A critical enabler for biomass is the development of a supply chain to deliver this. The development of R&B BC’s own supply chain would from part of a wider supply capability for region. Over and above this it would help R&B BC to meet a number of its own aspirations and objectives while providing a additoinal benefits.

Meeting R&B’s local objectivesR&B’s vision for wood fuel is still in its formative stages. Work such as this report and others are contributing to the development of ideas and to a growing understanding of the possibilities and potential. In the mean time R&B are keen to see biomass and wood fuel contribute to current council objectives. Key amongst these are:

– To provide a significant contribution to meeting council’s carbon the reduction targets: Biomass is a carbon neutral fuel that if used widely could contribute significantly achieving this whilst at the same time reducing the Borough’s reliance on fossil fuels and hence improving energy security by the use of a locally produced fuels. Biomass is increasingly being seen as the best land based investment for carbon reduction for large scale heating requirements. Council support for renewable energy through planning policy is already

– To support local regeneration: Biomass supply is a local issue. If the large new housing and commercial developments within the Borough can be encouraged to utilize biomass as a heating fuel this will support regeneration of local woodlands and the diversification of local farmers to produce wood (in the form of short rotation coppice) as an energy crop.

– To improve the Council’s image as an environmentally concerned, innovative, progressive organization: Wood fuel has traditionally lagged behind more “sexy” environmental technologies such as wind and solar thermal and photovoltaic. It is clearly a key environmental technology and this image is rapidly changing as more and more organizations realize the opportunity and value of wood heating particularly for local heating and power requirements.

– To provide an income stream for management of Council owned woodland resources: Currently the council spends in the order of £xxxx to manage and maintain its parklands essential H&S for trees. To date this is a net cost to the Council and rate payers. If the wood created as a by product of this had a market, this could be used to offset costs or expand council services. Moreover if the council were to install its own biomass heating systems it could use wood direct from council resources could to replace fossil fuels.

[1] Sustainability Appraisal and Strategic Environmental Assessment of the Local Development Scoping Report Oct 2005

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Background, Objectives and Opportunity

Opportunities from using wood as a fuelAs well as meeting local objectives the use of wood as a fuel provides other opportunities for the council. The development of the councils own capability to supply provides for

The Ecological opportunityHousehold energy consumption is responsible for 17%of the total Borough’s Ecological Footprint [2]. While the technological potential for almost zero energy buildings exists, achieving it depends on lifestyles and institutions (for instance, the problem of split responsibilities between landlord, utilities and tenants). Use of biomass for heating and power together with other renewal technologies such as solar thermal provides a cost and environmentally effective compromise for new developments.[3]

[2] SEI: The Ecological Footprint of Reigate and Banstead. Jan 2006

[3] Preston Regeneration: Sustainable Energy Feasibility Study. March 2007

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Demand Assessment

Site Tonnes @ 30% MC

Probability Comments

Park 25 (actual demand) 700 100% Currently the only installed significant demand for a local supply chain is the 750kw boiler installed at Park 25 providing heat as part of a district heating system for a 70+ houses as part of the new housing and commercial development. Wood fuel required from April 2008.

Royal Alexandra and Albert School

350 Phase 1

(1700 Other phases)

75% A boarding school owned by the Gatton Park Trust

Off-gas. Currently uses £241k of oil per annum to heat school buildings, swimming pool, tennis courts etc

Sited next to 2000 acres of National Trust wood land

Phase 1 – 1 school building and swimming pool

Phase 2 – rest of school (only recently has had new oil boilers put in)

Horley Housing development 2000 50%?? 2600 new homes 1100 in the north west

1500 in north east will be using ground source heat pumps

500 of total could potentially be heated using biomass

Preston Housing development 3000 50%?? Preston 300-400 new homes Raven Housing Trust is the developer

Will be sold with conditions by the council and BREAM level 4

Have funding of £5m for biomass CHP under New Growth Points

Redhill Town Centre Development 4247 ?? ???

East Surrey Hospital 2500 ?? ???

Total 12,797

The table below shows the estimated known and potential demand within the R&B area by probability. This clearly shows a strong potential demand and hence provides confidence for establishing a local supply capability.

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Wood Resource: Tonnes of wood @ 30% mc available from following

Arboricultural Habitat & other Forestry

HW Roundwood

0 48 217

SW Roundwood

0 47 88

HW Waste 55 24 158

SW Waste 0 12 44

Totals 55 131 507

All sources 693

Woodlands 558 ha woodland, up to 500 tonnes wood per annum

Arboricultural Approx 50 tonnes per annum in house - Much larger potential volume from Surrey CC street trees in local area

Land and scrub clearance Approx 130 tonnes per annum during habitat restoration schemes

Fuel Wood from waste recycling Up to 10,000 tonnes per annum from BritaniaCrest + more from 3 other local waste recyclers

Capability

Storage and processing 1.5 ha, 2 sites, no suitable undercover storage

Equipment 2 small tractors for gang mowing in summer, 1 x small yard tractor, 1 x 4.5 tn trailer, no forestry or processing equipment, small brush wood chipper

Manpower and budget In house team at full capacity. Arb. Contracted out at £100k p.a. and Forestry sub-contracted. Habitat and other done by Volunteers

Skills The department currently has none of the skills in house required to harvest, extract or process wood for wood chip

R&B Current Capacity and Capability Assessment

Findings SummaryThe study has found that R&B can produce in the order of 693 tonnes of wood annually on a sustainable basis from its own resources. More could be produced in association with Surrey CC tree services but this needs further assessment. However the Countryside and Parks Team have neither the manpower, skills, equipment or additional budget to do this work internally. They currently rely on external contractors for managing woodland and the health and safety related tree work.

Members of the department would like to bring contracted work in-house and expand the man power and capability of the team to perform these and other woodland/tree related functions and are keen to explore the opportunity wood fuel might bring to do this.

The study also found a large potential supply of recovered wood from local waste recyclers.

Note: Forestry Figures still need confirmation by Andrew Tolfts

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OPTION 1A – INVESTMENT IN AND UTILISATION OF IN- HOUSE R&B RESOURCES This assumes R&B invest in all the equipment and man time to support all process elements from harvesting of wood to delivery of chip.

OPTION 1B – UTILISATION OF IN-HOUSE WOOD - FULL

OUT-SOURCE OF PROCESS ELEMENTSAssumes the use of contractors under the management of R&B perform all processes harvesting of wood to delivery of chip.

Costs Process

Cost £/tonne p.a.Initial Capital Investment

Option 1A – In House Option 1B - Outsourced Option 1A only

Harvesting 9.67 10.17 £5,000

Extraction 14.11 15.58 £25,000

Storage 14.43 14.43 £5,000

Processing 18.57 9.35 £25,000

Loading 0.00 1.81 £0.0

Delivery 6.87 8.97 £7,000

Equipment depn. over 5 years

19.34 Incl. 161 man days p.a.

Total £83.08 £60.31 £67,000

Total cost £57,574 £41,794 n/a

Benefits p.a. yr 1-5

External sales of chip

@ £65 and £75/tn + margin

£45,045 and £51,975

-£12,529 and -£5,599

- Management cost

£45045 and £51975

£3,251 and £10,181

- Management cost

n/a

Energy value of 693 tns wood @ 30% mc (kWh)

2,425,500

Oil displacement Ltrs 224,583

Oil cost (@48p/ltr) £107,799

In House Saving against oil p.a.

£50,225£66,005

Saving post year 5 p.a. £63,628

Gas displacement (therms) 827 613

Gas cost (2.5p/kWh) £60,637

In House Saving against gas

£1,041

£18,842

Gas Saving Post year 5 p.a. £16,466

Pays for wood land management; Energy security; 150 less tonne carbon produced per year

Additional kit and possibly man time for other parks and country side uses

Cost / Benefit for R&B Supply Chain Options

Notes:1. Cost per tonne include annual costs: Man time, insurance, servicing, running costs

Conclusions1. Most financial benefit will be retuned from using R&B

wood replace its own fossil fuel use. The “virtuous circle”.

2. A contracted out solution is the most cost effective way to provide a supply chain solution for R&B as it returns a margin through either external sales or internal use from year 1.

3. The in-house approach breaks even, even against gas and may have other benefits for the Parks and Country side team.

4. The in-house solution may benefit from use of the current H&S tree surgery budget as part of a holistic in-house solution

5. The in-house solution could benefit from access to more wood to achieve better economies of scale say through a tie up with Surrey CC or through setting up a tree station type operation, though land / space would need to be found for this.

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Assumptions for Options 1A and 1B

• Motor manual harvesting and stacking in woodland• Immediate removal of all usable timber from woodland direct to the yard

using tractor and forwarding trailer • Collection of stacked timber from Habitat management using tractor and

forwarding trailer • Collection of timber from arboricultural arisings using existing vehicles or

forwarding trailer • Stacking all timber at new pond farm (option 1A only)• Chipping seasoned timber directly into delivery trailer using hand fed drum

chipper and delivery to council or other users using tractor and high lift trailer

• Have not included cost/benefit of out/in sourcing Arboricultural contract • Have not included management:

– Could be done either by council, forestry management company or other

• Have assumed a loss in rent £10,000 per annum on 0.3 ha of storage space and 120m2 of barn space

• Does not include standing value of timber

• As for 1A with the following amendments … • Stacking all timber at yard with undercover fuel store• Chipping seasoned timber directly into undercover fuel store using

16” crane fed chipper • Loading into trailers using telehandler or front loader and delivery to

council or other users• No loss of rent from Pond Farm

Assumptions for 1B onlyAssumptions for 1A only• Man Days: c.160 @ 120 per day

[not management] • Equipment:Motor manual harvesting equipment

– Timber trailer with crane

– 80hp tractor

– 12” Handfed drum chipper

– 15 / 20 cu.m High lift trailer

• Storage Space: c.0.4ha [will work in new pond farm] No need for chip storage

Assumptions for 1A and 1B

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Appendices

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Option 1: Total In-House Resource

Harvesting Extraction Processing Delivery Man days Man Days Man days Man days

SW Waste 75 44 3.13 5.00 125 3.13 169 2.11SW round wood 150 89 12.50 7.50 115 3.75 338 4.22

HW Waste 200 158 8.33 13.33 333 8.33 450 5.63HW roundwood 275 217 22.92 13.75 275 6.88 619 7.73

Total 700 508 47 39.58 849 22.08 1575 19.69

Harvesting Extraction Processing DeliveryMan days Man Days Man days Man days

SW Waste 0 0 0 0 0 0 0 0SW roundwood 0 0 0 0 0 0 0 0

HW Waste 70 55 0 3.69 117 4.86 263 3.28HW roundwood 0 0 0 0 0 0 0 0

Total 70 55 3.69 117 4.86 263 3.28

Man days Man Days Man days Man daysSW Waste 20 12 0 1.3 33 0.83 45 0.56SW roundwood 80 47 0 4.0 62 2.00 180 2.25

HW Waste 30 24 0 2.0 50 1.25 68 0.84HW roundwood 60 47 0 3.0 67 1.50 135 1.69

Total 150 130 0 10.3 212 5.58 428 5.34

Gand total 920 693 47 54 1177 33 2265 28

Total man days 161

Forestry

Arboricultural

Access and Habitat Volume of timber m3

Volume of timber m3

Storage for seasoning m2

Annual chip production m3

Volume of timber m3

Tonnes at 30% mc

Tonnes at 30% mc

Tonnes at 30% mc





In-House Processing Data

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EQUIPMENT CATEGORY

PURCHASE PRICE [NEW]

INSURANCE MAN DAYS PER DAY OPERATION

DAILY LABOUR COST

FUEL MAINTENANCE DEPRECIATION FIXED RUNNING COSTS

DAILY RUNNING COSTS

£/YEAR £/DAY £/DAY £/YEAR £/YEAR £/YEAR £/DAY

Power units 15000 500 1 120 50 2000 2500 5000 17020000 550 1 120 50 2500 3333 6383 17025000 650 1 120 90 3500 4167 8317 21045000 700 1 120 110 5000 7500 13200 230

Harvesting 10000 100 1 120 15 300 1667 2067 1351 120 0 0 120

Extraction 10000 100 1 120 500 1667 2267 1201000 20 1 120 200 167 387 120

10000 350 1 120 1000 1667 3017 120

Processing 15000 250 1 120 500 2500 3250 12025000 350 0 0 800 4167 5317 025000 450 1 120 1200 4167 5817 12049000 550 0 0 1800 8167 10517 062000 1000 1 120 3000 10333 14333 120110000 1500 1 120 5000 18333 24833 120

Loaders 8000 150 1 120 500 1333 1983 12025000 400 1 120 50 1500 4167 6067 170

20000 800 1 120 40 2000 3333 6133 1607000 150 0 0 250 1167 1567 0

10000 200 0 0 250 1667 2117 045000 1500 1 120 120 3000 7500 12000 24040000 1500 1 120 120 3000 6667 11167 24060000 2500 1 120 150 5000 10000 17500 27080000 5000 1 120 200 8000 13333 26333 320

not including power unit

not including power unit for grain trailers

not including power unit

Delivery Vehciels

30cu.m gain trailer 30cu.m tipper

30cu.m hook lift60cu.m tipper

100cu.m walking floor

12cu.m tipper20cu.m grain trailer

loader for tractor telescopic handler

16" Drum Chipper [With crane] 20" Drum Chipper [With crane] 32" Drum Chipper [With crane]

Timber Trailer [With crane]

12" / 16" Drum Chipper

Skid [stand alone]

10" Disc Chipper 10" Disc Chipper [With crane]

Mechanical Harvesting

UNIT

Skid [tractor mounted]

Tractor [170HP]Fastrac

Motor Manual Harvesting

Tractor [100HP]Tractor [80HP]

In-House Annual Costs and Investment Data

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Sub-contracting costs for options analysis

1m3 stacked softwood timber = 0.65 m3 solid timber

1m3 stacked hardwood timber = 0.50 m3 solid timber

1m3 stacked waste timber = 0.3 m3 solid timber

Timber stacked at 2m

Motor manual harvesting = Average 12cu.m per day per person

Average of 5cu.m of wood on 8cu.m tractor towed forwader

EQUIPMENT CATEGORY

DAY RENTAL WITH

OPERATOR

THROUGHPUT M3 / DAY ROUNDWOOD

£/CU.M HARDWOOD £/TONNE

SOFTWOOD £/TONNE

OUTPUT M3 /DAY WOODCHIP

THROUGHPUT M3 / DAY WASTE WOOD

£/CU.M HARDWOOD £/TONNE

SOFTWOOD £/TONNE

OUTPUT M3 /DAY WOODCHIP

Power units 150170189220

Harvesting 150 12.00 12.50 15.82 21.19 24.00 2.50 3.16 4.24

400 100.00 4.00 5.06 6.78 100.00 0.40 0.51 0.68

Extraction 200 20.00 10.00 12.66 16.95 15.00 13.33 16.88 22.60150 #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

#DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!

Processing 350 35.00 10.00 12.66 16.95 78.75 21.00 16.67 21.10 28.25 47.25550 57.00 9.65 12.21 16.35 128.25 34.20 16.08 20.36 27.26 76.95450 40.00 11.25 14.24 19.07 90.00 24.00 18.75 23.73 31.78 54.00450 89.00 5.06 6.40 8.57 200.25 53.40 8.43 10.67 14.28 120.15850 133.00 6.39 8.09 10.83 299.25 79.80 10.65 13.48 18.05 179.55

1200 200.00 6.00 7.59 10.17 450.00 120.00 10.00 12.66 16.95 270.00

150 1.22 1.64 350 1.22 1.64 350200 1.27 1.70 450 1.27 1.70 450

capacity [m3] Delivery 7.5t tipper 12 190 11.28 15.11 48.00 11.28 15.11 48.00

Grain / HL trailer 20 190 6.77 9.06 80.00 6.77 9.06 80.00Grain trailer 30 200 6.33 8.48 90.00 6.33 8.48 90.00Bulk tipper 30 350 11.08 14.84 90.00 11.08 14.84 90.00Hook lift 30 390 12.35 16.54 90.00 12.35 16.54 90.00Articulated tipper 60 450 8.55 11.45 150.00 8.55 11.45 150.00Articulated walking floor 100 500 7.12 9.54 200.00 7.12 9.54 200.00

[Rental figures include

appropriate pwer unit]

Handlingtelescopic handler

UNIT

20" Drum Chipper [With crane] 32" Drum Chipper [With crane]

Timber Trailer [With crane] Skid [tractor mounted]

loader for tractor

12" / 16" Drum Chipper 16" Drum Chipper [With crane]

WASTE WOODROUND WOOD

Skid [stand alone]

Motor Manual Harvesting Mechanical Harvesting

10" Disc Chipper

10" Disc Chipper [With crane]

Tractor [80HP]Tractor [100HP]Tractor [170HP]Fastrac

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Summary

Demand(14,000t)

Preston3000t

Redhill TC4247t

Horley2000+tonnes

RAAS350-2000t

Park 25800t

ESH2500t

R&B’s c.a. 2000t

LocalResources(17-50,000t)

Supply Chain

Mike Connick c.a. 5000t

Brit. Crest10,000t

Other SEWF Membs

6000t

Other recyclers

30000t

Simon Cox

Gatwick Diamond

Farmers ESCO

The Opportunity Landscape

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Potential Sites: New Pond Farm

Glass Houses

Access to Woodhatch Road

Existing Buildings

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The Horley Wood Fuel Hub and ESCO Opportunity

• All within 2-3miles of Horley• Wood fuel Hub

– Simon Cox• Silage clamps• Land

– Britania Crest• 10,000t reclaimed wood• Delivery vehicles

• Farmers ESCO (SEEDA funding)– Harvesting, supply chain, boiler infrastructure

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Britaniacrest Moat Farm

Potential sites: BC & MF

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Moat Farm

Storage Bays Unused LandGood Access

to A217

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Britaniacrest

Moat Farm

Horley

Development area?

Development Area, BC & MF

Woodfuel Supply Chain Design Study

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