letsrecycle.com: REA urges government to ‘back biomass’ 25/08/2011
The Renewable Energy Association has launched a campaign urging the government to ‘back biomass’ ahead of a crucial decision about the level of support which plants will receive under the Renewables Obligation (RO) from April 2013-17.
'Biomass' plants are those which produce energy from organic matter, such as forestry residues, virgin timber, energy crops and wood and food waste.
Under the RO, large scale renewable energy generation projects are offered financial support in the form of Renewables Obligation Certificates (ROCs) for every Megawatt hour (MWh) of electricity they produce.
The levels of support vary depending on technology, which is known as ‘banding’. At present, dedicated biomass plants currently qualify for 1 ½ ROCs per MWh, anaerobic digestion plants qualify for 2 ROCs and the co-firing of biomass with fossil fuels is eligible for ½ ROC. Plants producing both heat and power (CHP) can also qualify for an extra ½ ROC per MWh.
However, last year the government launched a review into this banding, meaning that from April 2013-17 the levels of support for different technologies will change. Initial proposals are expected to be announced imminently, with a decision due to be taken by the end of the year.
Now, the Renewable Energy Association is calling on government to ensure that decisions taken not only provide sufficient levels of support to leverage the huge sums of private investment required, but are taken on time. The REA claims that until industry and investors receive clarity, many biomass project ‘hang in the balance’.
Earlier this month, for instance, energy company Drax was granted planning permission for two biomass power plants in Yorkshire and North Lincolnshire but said that their development would be conditional on the banding review.
For this reason, Drax is one of five companies which are funding the REA campaign alongside energy giant E.ON, British Sugar, Renewable Energy Systems (RES) and Future Biogas.
Potential
In its Renewables Roadmap, published in July (see letsrecycle.com story) the government said it was keen for biomass plants to deliver around 6 Gigawatts (GW) of electricity by 2010.
Lending his support to the campaign, energy minister Charles Hendry said: “We want a balanced energy portfolio and we want biomass to play a central role in this. Biomass electricity is both predictable and controllable and I am very interested in the potential for co-firing and conversion.”
Gaynor Hartnell, chief executive of the REA, said: “It is highly significant that the government has just increased its ambition for power generation from biomass. There are a number of large projects in development that would produce very cost-effective renewable electricity and can deliver steady baseload power. Their contribution towards our legally-binding renewables target is essential. They had been delayed by a policy glitch, but the new government swiftly resolved this. Provided support levels are maintained in the forthcoming banding review, government can look forward to these plants making their contribution towards meeting the UK’s targets.”
Important
Paul Thompson, head of policy at the REA, told letsrecycle.com that the RO banding review as particularly important for the biomass sector in light of uncertainty over’ grandfathering’ last year. This centred around the fact that, before July 2010, biomass plant developers were not guaranteed the same level of ROCs support over the 20-year life-time of their projects and so faced financial uncertainty (see letsrecycle.com story).
He said: “There was a hiatus in investment last year as developers did not know what support they would be getting. By the time this was rectified in the summer it was too late for some plants to be developed in the current banding period. Everyone is waiting to see what the outcome of this latest review will be”.
Mr Thompson added that 2013-17 also provided a ‘window of opportunity’ because after this date the RO was set to be replaced by a ‘contract for difference’ feed-in tariff system, the details of which are still unclear (see letsrecycle.com story).
From April 0213, rigorous new government sustainability criteria for biomass feedstock will also require generators to demonstrate at least a 60% reduction in greenhouse gases in order to be eligible for financial support.
This is expected to benefit the waste sector in particular, because waste feedstocks will automatically pass some of the criteria and also reduce the administrative burden on operators.
The REA said: “Industry welcomes this measure, which will drive up standards in the sustainability and conservation of forestry, helping to ensure that biomass is cleaner and more sustainable than it has ever been.”