Zeal for the convert

The latest Roc bands strongly favour coal-to-biomass conversion over new dedicated biomass plant. Richard Bowen analyses the decision

Energy generated from biomass sources such as managed forestry, waste wood and energy crops is a fast-growing sector, stimulated in recent years by Renewables Obligation Certificate (Roc) payments. Biomass could provide the UK with as much as 11 per cent of its total energy supply by 2020, according to government forecasters.

Roc bands are reviewed every four years, and after a consultation that started in the summer of 2012, the Department of Energy and Climate Change (Decc) settled on the support levels that will be available for biomass generation for the period 2013-17. Decc says its strategy will help unlock new project investment of up to £600 million, as well as creating thousands of new jobs in biomass-fired power station construction, operation and supply chains.

The revised bandings focus on encouraging lower cost, transitional biomass technologies, where coal used in existing power plants is replaced by sustainable biomass through enhanced co-firing capability or full conversion to biomass.

Drax, owner of the UK’s largest coal-fired power station near Selby, North Yorkshire, intends to accelerate its transition to biomass. A company spokesman tells Utility Week: “After extensive research and development over the past year or so, Drax has full confidence in the technical ability to convert generating units to burn sustainable biomass in place of coal. The company is now in full execution mode to transform the business into a predominantly biomass-fuelled generator.”

Drax plans to convert three of its six generating units over the next few years, with the first one set to be converted this year. The company calculates that the programme will virtually halve its carbon footprint, reducing emissions by around ten million tonnes a year. Drax is investing up to £700 million in the scheme, with most of the capital expenditure being divided between on-site works at the power station and construction of new biomass pelleting plants in the US. Earlier this month, the Treasury offered to guarantee £75 million of debt for Drax Power’s conversion from coal to biomass, as part of a programme designed to boost growth.

Drax is not alone in converting from coal to biomass. International Power’s 1GW Rugeley power station in Staffordshire gained planning consent in January 2013 to make the switch and intends to burn an 85/15 per cent biomass-coal mix. The 1,960MW Eggborough power station, also in North Yorkshire, has multi-million pound plans for a full conversion to biomass.

The revised Decc strategy is less kind to generators planning to build new dedicated biomass plants. While the subsidy levels remain relatively generous at up to 1.5 Rocs/MWh, a cap of 400MW has been introduced on the total amount of new-build biomass that will be supported.

Unsurprisingly, developers planning new dedicated biomass plants object to the capacity cap. More than 2,200MW of dedicated biomass energy generation has been consented in England and Wales but remains unbuilt. Most comprise larger plants, rated at up to 300MW, and represent many millions of pounds of investment to date.

Developers and their investment partners say many of the consented proposals will not be built because, without continuing financial support from subsidies, the economic case for building and operating them does not stack up. Centrica has already announced that it is pulling proposals for an 80MW biomass plant at Roosecote in Cumbria and a 137MW proposal at Brigg in Lincolnshire.

By contrast, Decc believes that only 250-560MW of the consented but unbuilt capacity will be shovel-ready for construction in the next few years. By setting the bar at 400MW Roc subsidy capacity, it says the policy will encourage swift development of the most advanced proposals as well as weeding out less likely contenders. Decc says it will review the situation should the 400MW cap be reached.

The Renewable Energy Association, a trade organisation representing developers, strikes a conciliatory tone. Outgoing chief executive Gaynor Hartnell comments: “Instead of implementing legislation that would have stopped investment in its tracks, Decc is taking more of a ‘wait and see’ approach, with the option of consulting if deployment exceeds 400MW. The decision recognises the substantial contribution that these projects can make to delivering cost-effective carbon savings and steady baseload output.”

As a partial concession, Decc has also decreed that new biomass plants that provide renewable heat as well as power will be exempt from the 400MW cap. A separate consultation seeking industry views on reforming certification criteria for combined heat and power (CHP) plants has just closed.

The Combined Heat and Power Association’s head of policy, Tim Rotheray, says: “The government’s decision to exempt CHP from the proposed biomass cap will help ensure we are using our limited biomass resources as sustainably as possible. CHP represents the optimal use of any fuel and it is therefore right that Decc is encouraging it above power or heat only.”

In a further move, Liberal Democrat MP Nick Harvey has just tabled an amendment to the Energy Bill to disqualify biomass plant with capacity of 15MW or more from receiving subsidies unless they are combined heat and power (CHP) or are fitted with carbon capture and storage. However, the number of dedicated biomass plants that can deploy CHP is likely to be limited in practice, with many biomass proposals finding it difficult to find local recipients for waste heat.

A final change signals the end of financial support for the growing of crops such as short rotation willow coppice and miscanthus, grown specifically for biomass fuel use in power stations, with the exception of existing contracts that end by April 2019. Introduced in 2009, the Decc view is that the mechanism has served its intended purpose to help offset initial higher planting and processing costs of energy crops.

Decc’s latest proposals seek to encourage the growth of biomass generation for electricity and heat without prompting a hasty rush to develop biomass power plants. With energy requirements such an unpredictable business, the government is choosing to cover the bases as best it can without committing too much to one particular cause.

Richard Bowen is a freelance journalist

This article first appeared in Utility Week’s print edition of 22nd March 2013.

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