Biomass heating offers significant cost savings in parts of the UK that are not currently on the gas grid. For example, using wood or straw can provide cost savings of 2-4 p/kWh relative to use of heating oil.

A biomass system generating 1,600 MWh of heat could therefore save up to £50,000 per year on fuel costs relative to an existing oil-based heating system. The costs of biomass fuels also tend to be much less volatile than fossil fuels.

In its Renewable Energy Strategy consultation, the Government proposed that renewable sources may need to provide 14% of the UK’s heating requirements (up from its current level of less than 1%) to meet the 2020 renewable energy targets.  Biomass is expected to account for a significant proportion of this.

One example of businesses turning to biomass heating, is Cwm Taff NHS Trust, which decided to replace heating oil with a 1.2 MW biomass boiler burning woodchips. This could save an estimated £35,000 per year and pay back the initial investment within five years.

The Carbon Trust provides interest-free loans of up to £200,000 to help small businesses in the UK upgrade to more energy efficient equipment, including biomass boilers. Particularly when replacing electric, liquefied petroleum gas (LPG), or heating oil systems, the payback on the initial capital outlay can be less than three years.

To download a copy of the guide, please go to the Carbon Trust website.