Christa Kristöfel’s scientific contributions

EU bioenergy policies and oil price hikes have resulted in a significant increase of installed pellet boilers for residential heating. Hence, European demand for wood pellets has been growing faster and more steadily than supply leading to rising market prices in recent years. This article presents an econometric analysis of demand and supply of wood pellets in the residential heating sector in Austria, one of the most dynamic markets for residential pellets. Annual and monthly time series data between 2000 and 2014 are used in a two-stage least-squares (2SLS) regression to estimate supply and demand elasticities of wood pellets. In all model specifications, pellets demand is found to be inelastic (from −0.66 to −0.76) and pellets supply unit-elastic (from 1.03 to 1.18). Thus, consumers are highly exposed to price changes resulting from supply shocks. Policies which support investments in pellet boilers will shift the demand of wood pellets and likely leading to higher prices for consumers.

This publication is part of the output of the PromoBio project(Promotion to Regional Bioenergy Initiatives – IEE/10/470/SI2.593725, www.promobio.eu) supported by the European Commission under the Intelligent Energy Europe Programme. The PromoBio project is coordinated by Metla, the Finnish Forest Research Institute. The other partners are the Technical Research Centre of Finland (VTT), BIOENERGY 2020+ GmbH (Austria), the Institute for Studies and Power Engineering (ISPE, Romania), the Centru Regional Development Agency (ADR Centru, Romania), the Polish National Energy Conservation Agency (KAPE) and the Slovak University of Agriculture in Nitra (UNIAG). In 2008, the European Commission launched an action plan for the promotion of the use of energy from renewable sources (RES directive). The objective is to reach 20% of the EU's energy consumption through renewable energy sources by 2020. Each member state has specific objectives. Poland, Romania, and Slovakia are the most recent new members of the EU. The objective of the three-year (2011– 2014) PromoBio project is to launch concrete project plans and to include entrepreneurs from the three target countries (Poland, Romania, and Slovakia) in the acquisition of woody biomass and investment in heating plants. The best bioenergy practices and successful business models from partner countries Finland and Austria will be tested and transferred to the target regions of the project in Poland, Romania and Slovakia. The aim is to provide the local stakeholders with the grounds to make informed decisions about developing the bioenergy markets of their region. This guidebook is a concrete tool to provide basic information for the whole wood-based bioenergy process as applied to the local conditions.