Pellets industry importance for UK
Most Northern European countries currently use automatic wood heating. As for UK, the tendency of such heating usage had been slow due to some factors such as existence of North Sea oil and gas stores prompting rather competitive fuel prices. Another factor lies in the fact the tradition of wood usage for heating had been lost with times. Plus one should take into account that high population density requires extensive gas grid, that is why the government had never been supported the usage of wood heating technology and the climatic situation in the country had been on the stable level.
Nowadays the situation had changed in some way: the prices for fossil fuel grew, which prompted the country government to pay attention to wood heating technology usage and grant financial support for it. But such situation arise another problem which lies in the fact that the aforementioned technology is not well learnt, few saw in practice how everything works. And another important factor is that pellet manufacturing is not developed on a local level, which means that there are a few trained technical specialists, having experience at dealing with pellet manufacturing equipment. The project about pellets technology promotion is designed to remove the aforementioned problems in the UK and will help UK government to fulfill its obligations on Kyoto agreement, which are related to CO2 emissions reducing, meaning 12.5% reduction by 2010 in accordance with Kyoto protocol and 20% reduction by 2010 and 60% by 2050 set as internal country goal. Furthermore, such project will provide the country with the constant pellets supply
The pellets market situation analysis in UK had been done in favorable time of this industry sector growth. Initial pellets equipment had been installed in the buildings which had heating systems installed within 2-3 years. Plus the region has two pellets plants which should be launched at the beginning of the year 2006. Pellets end -users will treat favorably the local pellets manufacturing presence as it will give them more confidence about delivery security and product price steadiness, plus such industry sector presence will prompt the achieving of political goals, such as economic benefits and employment creation.
Experts specify that the necessity of such industry sector in the country is induced by serious and constant fossil fuel prices increase. Despite the fact that the prices increase occurred on the European level, economists doubt that the price increase in UK will be more significant than in other regions. It can be explained by the closeness of North Sea oil and gas stores. Now the situation with fossil fuel prices is on the level when the prices reached the mark higher than the prices of wood pellet fuel. Furthermore industry experts forecast the UK to be oil and gas sole importer in the very near future. They explain such forecast by governmental financial grants availability since the year 2004 and by significant fossil fuel prices rise.
To sum up the analysts say that the country has the situation when everything required for pellet market growth is on the disposal. The only uncertainty is how to ease the industry growth and go away spillover effects, meaning the pellets low quality or non appropriate installation of the equipment which may occur due to the experience shortage.
