Heat producers saved nearly EUR 4.5 million
The weighted average price for the supply of biomass during the heating season 2015 amounted to 147.78 EUR/toe (tons of oil equivalent) and was 11.5 percent less than in the heating season 2014, when the average price of biomass amounted to 166.99 EUR/toe. If the heat producers would have purchased biomass at the previous prices, they would have spent EUR 4.47 million more.
During the heating season 2015, the amount of biomass purchased through the exchange increased by 2.6 times.
During the heating season 2015 (from 12/10/2015 to 10/04/2016), the value of biomass purchased through Baltpool biomass exchange amounted to EUR 34.4 million. This is 2.6 times more than the amount purchased during the heating season 2014 (from 13/10/2014 to 12/04/2015), when the value of contracts concluded during the mentioned period amounted to EUR 13 million. Compared to the same period of 2014, the number of concluded contracts increased by more than three times, from 730 to 2261.
Purchasing of biomass via long-term contracts has become cheaper.
The difference in price is even more pronounced, when the prices of long-term contracts are compared. Those heat producers who bought biomass through long term contracts, purchased biomass about 16 percent cheaper in winter season 2015 than in heating season 2014. Along with increasing competition of biomass suppliers, and with biomass supply exceeding the demand, the sellers have become increasingly interested in long-term contracts, which secure stable predictable long term income. This determined low prices of long-term contracts.
Biomass prices continued to drop in the most of the counties
When the heating seasons 2014 and 2015 are compared, the price drop by even 20 percent can be noticed in some municipalities. The price decrease was influenced not only by the growth of biomass supply in the internal market, but also by the emergence of new vendors who delivered biomass from Latvia.
The competition was increased by the growing number of sellers
For the heating season 2015, the sellers concluded twice more contracts than for the heating season 2014. The growing number of sellers improved the liquidity of the exchange and increase the competition on the exchange, which did not allow any market participant to dominate.
Started purchasing fuel for winter season already in spring
For winter season 2015, 248 thousand TOE of biomass was purchased by longer than one-week contracts. The first one-quarter and half-year contracts for the winter season 2015 were accomplished already in April. The largest quantities of biomass by long-term contracts were purchased in summer and winter months. September was exceptionally active in the exchange, when even 41 thousand TOE of biomass was purchased for the winter season by long-term contracts.
The most part of supplied biomass met the requirements.
The applicable quality standards were completely met by 91 percent of biomass supplied during the winter season. 7.3 of supplied biomass exceeded the permitted ash content up to 2 percent, and 1.7 percent of biomass exceeded the permitted parameters by more than 2 percent. These high quality indicators were achieved due to the discount system applied in the exchange, where 5 percent discount is applied to the supplied biomass for each exceeded percent of ash content, and it becomes not economically beneficial to the supplier to supply raw materials, which do not meet quality standards.