Press Release: Warm friends in cold places - green heat from the experts

Forever Fuels Ltd and Skellefteå Kraft AB today announced that they have agreed to work together to bring Skellefteå's top-quality wood pellets to the British market.

The market for green heating in the UK is still in its infancy. But the need for alternatives to fossil fuels has been highlighted by the volatility of their prices, and Russia's attempts to hold her neighbours to ransom through control of the gas supplies.

Biomass is one of the few practical alternatives to fossil fuels for our heating supplies. A number of factors have inhibited its widespread adoption in the UK. One significant factor is customers' uncertainty about the ongoing availability of biomass fuel of sufficient quality and consistency. Backed by Summerleaze, one of the UK's longest-established renewable energy groups, Forever Fuels' mission is to provide a reliable, nationwide supply of quality wood pellets, allowing customers to invest in biomass boilers with confidence. Forever Fuels has quickly established a leading position as a supplier of wood pellets.

For customers to have confidence, they must be sure, for the lifetime of their boiler, not only that suppliers like Forever Fuels will continue to service the market, but also that these suppliers can obtain enough pellets of a suitable quality to satisfy demand. Faced with limited UK production, and in the wake of the recent closure of three British pellet plants and questions over the quality of the pellets from some of the other plants, Forever Fuels turned to Sweden.

With vast, sustainable forestry-resources and the best record in Europe for displacing fossil fuels with renewables, Sweden is arguably the home of biomass energy. And with one pellet factory producing almost twice as much fuel as the the combined output of all UK plants, and another entering production that will produce almost as much again, Skellefteå Kraft is one of the largest and longest-established producers in Sweden.

Initial loads from Skellefteå were trialled during December with some of Forever Fuels' closest customers (Nottinghamshire County Council and South Yorkshire Police). These trials proved highly successful. The pellets provided high calorific values and durability, improved flow characteristics, and low fines and ash content. Hard on the heals of this successful trial, the first bulk delivery of 3000 tonnes arrived in the UK in January, to be made available to Forever Fuels' customers around Britain.

Elisabeth Bjuhr, Head of Department for Heat/Marketing at Skellefteå Kraft said "We believe that the UK market has a lot of potential. We are pleased to join with the UK's leading supplier of pellets to develop that market. The UK has a lot of people and rapidly depleting energy resources. Sweden has not so many people and a very large, sustainable biomass resource. It makes sense to work together."

"We are delighted to be partnering a company with such a track-record and range of expertise as Skellefteå Kraft", said Bruno Prior, Managing Director of Forever Fuels. "As soon as we tried these pellets, we knew they were good. If you can keep a city in the north of Sweden warm and lit, helping us to stay warm in Britain should be a piece of cake."

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-- NOTES FOR EDITORS --

Skellefteå Kraft AB is Sweden's fourth-largest energy producer. Their biomass CHP and wood-pellet plant at Hedensbyn, commissioned in 1996, produces 130,000 tonnes per annum (tpa) of wood pellets. Their new pellet plant at Storuman, commissioned in 2008, will produce 105,000 tpa. Further information on Skellefteå Kraft and its installations can be found in their English-language information packs, which can be downloaded from FF's website: http://www.forever fuels.com/content/downloads .

Forever Fuels Ltd (FF) was formed as a joint-venture between Summerleaze Ltd and the Energy Crops Company Ltd (ECC) in early 2008, to take forward ECC's pioneering efforts in the wood-pellet market since 2004. FF supplies bulk or bagged pellets across England and Wales. It is now 100% owned by Summerleaze.

Summerleaze (a family company founded around 1930) has been investing in renewable energy since the early 1980s. Its landfill-gas business (sold to Infinis Ltd in 2007) grew from commissioning its first power station in 1987 to being one of the larger renewable energy producers in the UK. The company has been diversifying since the millennium into immature renewable sectors such as biomass heating fuels, anaerobic digestion and green hydrogen.

There are no definitive statistics for UK production of pellets, but it is unlikely to have been above 80,000 tpa during 2008. Only one large plant was in substantial operation: Balcas's at Enniskillen (nominal capacity of 60,000 tpa but operating at less than full capacity because of the weakness of the timber trade). Clifford Jones's new pellet plant at Rhyddin was not in full operation and did not produce substantial quantities of pellets. The remaining handful of UK pellet plants produce only a few thousand (or less) tpa each.

Most of this production services the Irish market (both north and south of the border). Figures for demand for wood pellets in mainland Britain are also elusive, but a reasonable estimate of the size of the retail market (i.e. commercial, municipal and domestic customers, but excluding large industrial consumers and electricity generators) is 10-20,000 tpa (probably the lower end of the range). Forever Fuels supplied around 3,500 tonnes of wood pellets in 2008.

The three British plants to have closed recently are Welsh Biofuels in Bridgend (went into administration in late autumn 2008), Fast Forward Energy in Llandrindod Wells (commercial decision to cease production, also in late autumn 2008), and the Renewable Fuel Co. in Tilbury (commercial decision to cease production, in summer 2008). Summerleaze (Forever Fuels' parent) had provided funds for the latter in 2007 to help keep it in operation, but it had never produced significant quantities of pellets.

Wood pellets provide a compact means of moving biomass fuels (energy-density 50% greater than chips). Because of this and the energy-efficiency of sea transport, only around 3% of the energy-value of the pellets is consumed in transport from factory in Sweden to customer. Most pellets produced in the UK have a similar energy- and carbon-footprint of distribution. Most small British plants use fossil fuels to power the process, whereas larger, remoter plants (such as Skellefteå's) use biomass CHP for a very low-carbon production process.

Around 60% of Sweden's land area of 411,000 km² is forested. Around 6.5% of the UK's land area of 242,000 km² is forested.

Renewables made up 43% of Sweden's final energy consumption in 2006. Wood fuels provided 23% of their primary energy supply (http://tinyurl.com/7x3psh ). Renewables made up 1.5% of the UK's final energy consumption in 2006 (see RES Consultation Document). Wood fuels were a negligible proportion of primary energy supply.

The UK's primary demand for energy was 236 million tonnes of oil equivalent (mtoe) in 2007. Of that, transport took 84 mtoe, electricity generation took 80 mtoe, and 10 mtoe went to non-energy use (e.g. production of plastics and fertilizers). The remainder (around 61 mtoe) went to the direct production of heat, and a significant proportion of the electricity also was used for heating. In very round terms, you can say that transport, electricity and heat each account for around one-third of our primary energy demand. [BERR's Energy flowchart 2007, http://www.berr.gov.uk/whatwedo/energy/statistics/publications/flowchart/page37716.html ]

Heat "currently accounts for 49% of the UK's final energy demand and 47% of our carbon emissions." [BERR's Renewable Energy Strategy Consultation Document 2008, http://renewableconsultation.berr.gov.uk/consultation/consultation_summary ]

30 mtoe of our primary demand for natural gas goes to electricity-generation. 59 mtoe of gas goes direct to final consumption - primarily the production of heat. In broad terms, one-third of our gas goes to electricity and two-thirds goes to heat.

Gas fuels under 40% of our electricity-generation, but over 80% of our heating. If the Russians turn off the taps, we have to worry about people freezing to death more than we have to worry about the lights going out.

Word-format version of Press Release is available for download.

-- CONTACT --

Bruno Prior or Simon Worth
Forever Fuels Ltd
225 Blackamoor Lane
Maidenhead
Berks. SL6 8RT
UK
Tel: +44 (0)1628 509690
Fax: +44 (0)1628 509698
Web: www.forever-fuels.com

Elisabeth Bjuhr or Rolf Lindgren
Skellefteå Kraft AB
931 80 Skellefteå
Sweden
Tel: +46 (0)910-77 29 51
Fax: +46 (0)910-77 28 78
Web: www.skekraft.se