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LVM to Start Deliveries of Energy Chips

Following the conclusion of JSC “Latvia's State Forests” (LVM) sale of additional volume of energy wood chips, LVM will conclude supply contracts for the 2022/2023 heating season with six buyers from a total of 16 participants. Almost 80 % of the purchased volume will go to heat supply companies.

“With the rapid increase in demand for energy products, which is caused by the reorientation of the market from natural gas to other forms of energy production, LVM immediately started work on increasing the volume of energy wood preparation. LVM Board made a decision to increase sales of energy wood chips by 150 thousand bulk cubic metres, which is equivalent to 130 thousand MWh. The additional volume represents up to a 30 % increase from the initially planned volume, and we plan to deliver it in the 2022/2023 heating season,” says LVM Board Member Jānis Lapiņš.

The sale of the additional volume of energy chips was concluded at the end of July. The interest from both the already known cooperation partners and from new buyers has been high and the sales process – dynamic. As part of the sales process, buyers had an opportunity to change the offered price an unlimited number of times by increasing it, as well as to adjust the desired purchase amount by decreasing or increasing it. This allowed each buyer to find the optimal balance between price and volume.

Together with the contracts to be concluded as a result of the sale of additional volume, LVM will continue to make deliveries to those companies with which contracts have been concluded in 2021 for a period of three years (from May 2021 to April 2024) and in the 2nd quarter of 2022 for a period of one year (from May 2022 to April 2023). In 2022/2023, LVM plans to achieve the historically highest production and sale volumes of energy chips, offering on the market around 800 thousand bulk cubic metres of a product suitable for energy production.

“The task is very ambitious – to increase the total volume of production by producing energy chips and, what is especially important, to ensure supplies to each company and boiler house in the amount and time required. However, we are sure that, by using our extensive experience and knowledge, we will handle it,” says Andris Meirāns, Deputy Director of Production and Supply of LVM Wood Products.

LVM produces energy wood chips from tree biomass – both from felling residues, such as branches, tops, trimmings, small trees, needles, and from the growth and small wood that remains in the forest after harvesting roadside and ditch growth and tending of young trees. Energy wood must dry naturally for 3 to 6 months after preparation to reach the optimum energy value at the time of burning and to be suitable for immediate use in the production of heat.

LVM thanks its cooperation partners for the growing interest in the use of wood chips produced by LVM and especially appreciates the ability of heat supply companies to technologically reorient their business to be able to use forest wood chips.