Life after the energy crops scheme

Life after the Energy Crops

Scheme

David Turley, NNFCC Lead Consultant

Biomass Feedstocks

Energy Now, Feb 2014, Telford

Copyright © NNFCC 2012.

What have we achieved in the UK

0

2000

4000

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16000

2010 2011 2012

Renewable Power (GWhe)

otherbiomass

AD

co firing

plantbiomass 0

200

400

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1000

1200

1400

2010 2011 2012

Renewable Heat (1,000 toe)

otherbiomass

wood

plantbiomass


Energy crop areas supported by planting grants

Natural England data on area supported (ha) to November 2011

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1000

2000

3000

4000

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6000

7000

8000

SRC Miscanthus

9496 ha in total

ECS2 2007-2013

ECS1 2000-2006


Energy crop planting

ETI and E4Tech, based on Natural England data

ECS1 Closure

Energy Crop Planting Locations - England

ETI and E4Tech, based on Natural England data


Factors affecting uptake

• Technical/infrastructure

• Economic

– High establishment cost

– Impacts on cash-flow

– Competition with

arable returns


Factors affecting uptake – Policy Uncertainty

Renewables Obligation (RO) (renewable power support)

• Capping of grandfathered (protected) support for new

dedicated biomass capacity at 400MW

• Loss of energy crop uplift (worth 0.5 RO Certificates /MWh)

from 2013 for new plants

New Contract For Difference support mechanism

• No strike price for dedicated biomass

Rural Development Policy

• No replacement for Energy Crop Scheme


UK Biomass feedstock requirement for existing and power plants in

planning or development by developer/generator (NNFCC Data)

1.74

6.96

1.74

0.00

4.52

6.78

0.51

0.51

0.51

0.51

1.57

1.57

-

2

4

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16

18

Feedstock

demand - 2015

Feedstock

demand - 2020

Mill

ion

to

nn

es

of p

elle

ts p

er

an

nu

m

RWE Lynemouth

Helius Energy

RES

Drax

Eon

Eggborough Power


Renewable Heat Incentive

• Non Domestic Scheme was launched Nov 2011 by DECC,

supporting biomass as an eligible technology (excludes direct air

heating)

• Domestic RHI Scheme to launch in Spring 2014 , which will also

cover biomass-only boilers and biomass pellet stoves with

back-boilers

– Targeted at off-gas grid applications

RHI Tariffs

Non domestic RHI Plants Commissioned from April 2014 (p/kWh)

Tier 1 (up to first 15% of annual rated

output)

Tier 2 (annual

output above Tier 1)

Small biomass <199kWth

8.6 2.2 7.2 (typical average)

Medium biomass 200kWth to 1MWth

5.0 2.1 4.4 (typical average)

Large biomass >1MWth

2

Biomass CHP 4.1

Domestic RHI - biomass boilers

12.2


RHI – Non Domestic Scheme

Applications for

Non-domestic RHI

(DECC Data)

574MW of installed

capacity by Oct 2013


Development Potential

64% 12%

4%

16%

4%

Space heating

Water heating

Cooking/catering

Process use

Drying/separation

Total UK heat

use by

application

(70 mtoe)


UK heating installations by fuel feedstock

0

5,000

10,000

15,000

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25,000

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1,000

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2,500

1968 1973 1979 1984 1990 1995 2001 2006 2012

Co

un

t 0

00

's (

gas

on

ly)

Co

un

t, 0

00

's (

no

t in

cl.

gas)

Solid fuel Electric storage Other electric Oil Gas

DECC Data


Boiler replacement opportunities

NNFCC data, based on conservative replacement rates for

conversion to biomass

Domestic

• 1700-1900 oil fired boilers per year

• 500-1000 solid fuelled boilers per

year

Wessex Biomass

Pelletstar


Supporting policies – direct rural support

• The Rural Community Energy Fund (RCEF) (details from WRAP)

– launched June 2013, £15 million to support rural

communities in England to develop renewable energy

projects providing economic and social benefits to the

rural community

• Stage 1 - provides a grant (up to £20,000 ) to assess feasibility

of renewable heat or power projects

• Stage 2 - provides an unsecured loan of up to £130K to support planning applications and develop a business case

for investment


Supporting Policies – other rural support

• CAP Reform Framework (2014-2020)– Rural development

proposals

– encourage supply of non-food/feed resources to support

the developing bioeconomy

– encourage renewable energy investment

– support for cooperative developments and

demonstrations

– BUT - Defra needs to give energy crops the appropriate

priority, which is not guaranteed, we await more detail!


Concluding Comments

• There is no specific policy measure that currently recognises

the value of domestic biomass

• Stop/start nature of direct support has not been helpful

• A supportive industry has developed and is poised to exploit

the opportunities available

• RHI appears to offer a significant opportunity for local energy

crop development less reliant on direct support

– Own heat supply

– Involvement in local heat supply chains

IEE – Forest Partnerships for Success

Celebrating 10 years of Bioeconomy

development

NNFCC is a UK based consultancy with

expertise on the conversion of biomass

to bioenergy, biofuels and biobased

products.

We help industry solve complex

business challenges and provide vital

evidence for policy makers.

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Life after the energy crops scheme

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