Energy, Vol.24, No.9, 811-821, 1999
Regional prices in the Swedish wood-fuel market
This paper analyses, through a statistical survey, the regional distribution of prices on the commercial wood-fuel market for district heating plants and the pellets market for single family houses. The existing market watch of the national Swedish wood-fuel market has been developed for both refined and unrefined wood-fuels. The last five years the trend for wood-fuel prices on the district heating market has been stable, with a slight increase in the price of refined wood-fuels. However, on the young and fast-growing household market for pellets, prices have increased 12% during the last three years. The distribution of prices for northern, middle and southern Sweden indicates differences within 5% between the regions. The limited price differences between Swedish regions are a product of a large domestic supply and an increasing trade among regions in Europe, putting pressure on prices. Regional differences, mirrored as transportation distances and local production costs are key factors that could explain this regional price variation. However, the development of a commercial market with less regulations tends to level out prices. Consumers on the household market purchase small quantities and do not have the same possibility as district heating companies to take advantage of the oversupply opportunity and thus face a faster price development. The weaker market position of the consumers also tends to give homogeneous prices between regions for the residential sector.