In Slovakia gas accounts for approximately 95% of the heating demand although heating with pellets today is already cheaper than heating with natural gas. Therefore, the potential of pellets as a major energy carrier is huge.
However, less than 120,000 tons of pellets are produced in Slovakia per year and hardly 15 % of this is consumed in the domestic energy market while the raw material potential is estimated to allow for the production of 1,000,000 tons of wood pellets per year. The same amount of pellets can be expected for pellet production from agricultural residues.
In Slovakia pellets are used mainly in small and middle boiler-rooms in areas where no gas connection is available. Medium scale users are usually schools, municipal offices, companies, hotels and bigger residential units with demands of 10-1000 tons per year. This market share is growing most rapidly.
Expansion of the market started in 2006, when the sale price of pellets exported mainly to Italy and Austria was very high. In 2007 pellet prices fell significantly and as a consequence several pellet production plants were shut down temporarily or perpetually. The pellet production began to recover gradually in 2008.
All pellet production plants in Slovakia are small in comparison to the European average. Therefore production costs are relatively high. Pellets which are exported to the power plants are sold for € 100 per ton which means that the profit margins for pellet producers are very low. Nevertheless, it can be expected that 2 or 3 additional large wood pellet production plants and 4 or 5 large agropellet production plants will be established in the near future.
Please refer to the Publication section for a comprehensive report on the Slovakian pellet market