Industrial and commercial natural gas users are weathering huge shocks in energy prices at the moment. The new contracts that are coming through now are looking closer to 25-30p/kWh, that is around £7.33 £/Therm. This is up from 3.5p/kWh and around 40p/therm two years ago. You have it that gas has increased so much that we have had to change measuring therms in p measuring them in £.
So how is this going to affect our existing customers with industrial wood waste boilers? For customers generating their own industrial wood waste burning it cleanly on their Ranheat Industrial Wood Waste Boilers will be unaffected by gas price increases. The price of their kilning, drying, and finishing will be completely unaffected. This is fantastic for all our customers that invested in green energy generation and are now reaping the rewards.
For customers generating wood waste on site without one of our systems, please get in touch. We are planning our manufacturing schedule for the rest of spring and summer, and there is still time for your Industrial Wood Waste Boiler to get to your site before next heating season.
We are now talking to more and more customers who do not generate their own wood waste but are looking locally to bring in locally generated wood waste to burn. We are finding that locally available wood chip and recycled wood waste has been almost unaffected by the increase in energy costs. This is because locally available wood chip and recycled wood has a far smaller exposure to increases in transport costs as the supply chains are shorter. This is the key advantage of our Industrial Wood Waste systems over pellet or virgin wood chip boiler, we can take advantage of what fuel is already around you.
We are seeing similar pricing, around 3.4p/kWh and sometimes less for the cost of energy from wood chip and sometimes less for recycled wood waste. With this price differential between Natural Gas and recycled wood waste, we are projecting close to one year returns on investment for projects even considering finance costs. We are also projecting positive cash flow from after the first month for all projects, the savings each month are that large.
A lot of people from covered farming and greenhouses have been calling us. The energy demands of growing cucumbers, peppers and tomatoes in this country are huge. We have been planning projects for these customers. They often have gas boilers that are extremely large, and it is typical for a system with a continuous base load of 2MW to have 8MW of capacity. By just targeting to replace the base load with biomass. We can have a far smaller biomass system, for example 2.2MW, that will be able to replace up to 90% of the gas usage. With this level of utilisation on our systems, the return on investment is extremely quick, under a year in most cases.
This points to the future of where we see biomass boilers. Biomass boilers are far larger and higher capital cost compared to Gas or Electricity. However, just aiming at the base heat load requirement is giving us projects that have the shortest return on investment. This is important for customers that need cheaper energy costs now.
Food manufacturers have been getting in contact with us. Large amounts of energy are required for ovens. Brewers are also facing the same issue. We are also getting enquiries from the cloth processing industries, there are industrial processes used in dyeing cloth that use huge amounts of energy. The list goes on, and we encourage all large-scale industrial users of energy to get in contact with us to see how we can help.
The conclusion that we have made from this tectonic shift in energy pricing is energy costs are going to change how we make, grow, and process all types of products. The assumptions that people made a year ago about energy must be thrown out of the window. Ranheat is here to help people unlock the energy from locally generated industrial wood waste that is all around them. This will lead to huge cost savings for these companies and lead to a greener more sustainable world.
Give us a call. We can help.