Currently, with the increase in requirements for cost reduction and environmental protection, the demand for alternative energy sources is growing. In this situation, wood chip pellets are one of the most popular fuels. Compared with oil, natural gas or coal, wood chip pellets are indeed relatively cheaper and environmentally friendly. Therefore, some investors have started their own pellet business. However, most of them are facing expenditure issues. The main problem is how much investment is needed to build a wood chip pellet plant?
The impact of factory equipment on costs
Firstly, investors should calculate the cost of raw materials. The pellet production line consists of several units, each of which is of a different type. The key point is that each type of pellet production equipment is used to process different raw materials. More importantly, different raw materials require different processing conditions. For example, the compression ratio of softwood or hardwood varies. Therefore, choosing the appropriate equipment should take this into account.
Another important factor to consider is the size of the raw materials. Materials that are too large cannot be processed by the pellet machine. Therefore, if the wood is too large, a hammer mill will also be needed. In this case, the cost of the pellet line unit should also be included in the calculation.
The output of the pellets should be considered. If the expected output of the pellets is higher, more expensive equipment needs to be installed. More importantly, larger wood chip pellet machine with higher production capacity require a large factory, which obviously increases the construction cost of the factory.
In addition, the raw materials for pellet production should consider using recycled wood or virgin fibers. Using recycled wood is cheaper: the average price of recycled wood is maintained at $55 - $65 per ton, while the price of virgin fibers is approximately $70 - $80 per ton.
Furthermore, the price of raw materials depends on the moisture content. The average moisture content is 40% - 60%. Therefore, the higher this number is, the more expensive the pellet production is. The reason is that a high moisture content brings costs for the drying process. So, recycled wood has a much lower moisture content than virgin fibers, and is obviously cheaper.
Therefore, considering the future production capacity of the factory, investors can calculate the cost of raw materials involved.
Other factors
The cost of building a wood chip pellet plant is also affected by other factors. Firstly, energy consumption should be calculated. The average cost per ton is $10. Maintenance and life cycle maintenance costs are approximately $5 per ton. The cost of bulk transportation is $2.5 per ton.
Additional capital costs include pellet storage and loading facilities, labor costs related to the factory's production capacity, and the cost of basic investment. If the annual production capacity is 150,000 tons, the labor cost will be equivalent to approximately $10 per ton. If the capacity is 100,000 tons, the annual basic capital cost will reach $125 per ton.
The total construction cost of the pellet plant also depends on the location.
In conclusion, the construction cost of a pellet plant includes several factors. These include different types of raw materials (their size, moisture content, etc.). It has an impact on the price of raw materials and the type of equipment required. In addition, other factors must also be taken into account, such as the expected production capacity of the factory, basic capital costs, labor, maintenance, storage and transportation.