Demand & Prices for Pellets & Heat Pumps Surges

By , 01 Aug 2022, 13:49 PM Business
Demand & Prices for Pellets & Heat Pumps Surges Photo: CC-by-0

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STA, 1 August 2022 - Amid the energy crisis, the prices of wood pellets and heat pumps in Slovenia have surged. As demand for pellets rose by about 35%, the price almost doubled and the supply has become a problem.

The Škofja Loka-based wood pellets producer Energija Narave told the STA the price of pellets went up by as much as 95% due to the rise in the price of raw material and costlier production. Currently, a pallet of mixed pellets produced by the company costs EUR 530 and a pallet of spruce pellets EUR 544.

The company said that just like last year, all the pellets produced this year would be sold.

What is more, the demand exceeds supply in Slovenia at the moment. According to Energija Narave, all Slovenian companies would cover about a third of domestic demand if they did not export. But all of them export.

"There is very little import this year," the company said, pointing to Serbia and Bosnia-Herzegovina, which banned exports due to lower purchasing power of their population. Meanwhile, countries north and west of Slovenia can sell pellets at a better price at home.

"We believe the Russian-Ukrainian war does not directly affect the Slovenian market, but it has a massive impact on the European market as Ukraine alone produces more than a third of this source of energy for the European market."

Energija Narave was forced to stop accepting orders at the end of June because its production capacities could not cope.

Energy company Elektro Maribor Energija Plus told the STA the demand for heat pumps had also been on the rise due to fear of price hikes and disruptions in the supply of heating oil and gas. This along with general price hikes has pushed the prices slightly up, the company said.

But it noted that the state was still offering subsidies for the purchase of heat pumps.

Elektro Maribor Energija Plus has been seeing a rise in demand for heat pumps since last October, but currently the situation is "crazy". The company decided that as it starts accepting orders again it will give priority to its regular customers.

The Statistics Office told the STA that the prices of heat pumps had indeed been quite stable, while the prices of pellets reflected the prices of hard fuels, which have gone up by 49.2% in the past year.

The government reduced value added tax (VAT) on energy products for all users last week to mitigate the effects of price hikes, but it has limited options for wood biomass, where it cannot regulate prices.

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