By Calor Gas Ltd

THE UKRENEWABLE ENERGY

STRATEGY

BIOMESS

THE UK RENEWABLE ENERGY STRATEGY – BIOMESSBy Calor Gas Ltd

EXECUTIVE SUMMARY

1. We do not believe that the massive shift to biomass and wind implied by the consultation is attainable.The carbon emissions in sourcing the wood are dramatically underestimated.The offshore wind targetis “heroic.”

2. Insofar as biomass is predicated on mass imports it will increase dependency on foreign sources ofsupply.The Strategy aims at becoming “less dependent on imports of fuel from abroad” and is thus atodds with itself.

3. Despite assertions that the policy framework must be cost-effective, this will clearly not be the case.According to the Government’s own figures, the cost to the UK will be net £61bn by 2030 after takinginto account carbon benefits.The framework will drive up energy prices, food prices and the generalrate of inflation.The Strategy itself predicts Government induced increases in gas bills of 18% to 37%for domestic and 24% to 49% for industrial customers. Unquantified numbers, maybe millions morehouseholds, will be thrown into fuel poverty.

4. Wind is so unreliable it will have to be virtually all backed up by extra expensive conventional power.The extent to which this means new coal power stations with their attendant pollution is not calculated.

5. The assumption that all biomass is zero-carbon is absurd and breaches our Kyoto obligations. It is anassumption that has polluted policies shaping the future of the housing market.There is a long way togo before biomass can be assured of not making the same mistakes as biofuel.

6. The biomass policy conflicts directly with the Air Quality Strategy. It will worsen air quality, andGovernment has decided the extra pollution will be concentrated in rural areas. Burning wood emitsa range of deadly pollutants not covered by either the Air Quality Strategy or the Clean Air Act 1993.The UK is already missing its EU targets on particulates and ozone: a shift to biomass will make thistask more difficult.

7. The Government has cherry-picked the wrong fuel winner: biomass looks like following biofuels’ walkof shame. LPG which has a cleaner emissions profile than coal, electricity, oil or biomass will be forcedto pay dearly to subsidise heavily an otherwise non-competitive fuel in order to displace itself from itsmarket in rural areas. Forcing successful industries in the UK to pay for their own demise will send outa signal to international investors about the nature of capitalism in Britain today.

IS IT PRACTICAL?

1.1. In 2006, 1.5% of our energy came from renewable sources.The Government desires “a very largeincrease in renewable heat” in order to achieve its target of 15% of renewable energy generation inthe energy generation mix by 2020.This target is acknowledged to be “extremely challenging” (“heroic,Minister”). Fells Associates Report (17th September 2008 – hereafter “Fells”) – “A Pragmatic EnergyPolicy for the UK” says that it will, “Require a monumental shift in investment and build rate forrenewables across all energy sectors.” All this is driven by the Government’s commitment to our EUpartners in 2007 to deliver a 15% renewable energy contribution from the UK by 2020. In our view,it is unattainable.

1.2. Figure 2 of the Consultation Paper shows a 15% contribution to the renewable mix from biomassheat (39 TWh out of 260TWh). Para 62 goes further, “Biomass-fuelled technologies, including biogas,may need to provide around 30% of the UK’s renewable electricity and heat generation.” Let us remainwith the 15% contribution from biomass at 39TWh.That is 39000000 MWh.To convert that figure intoMW you have to divide by the number of hours in a year (8760). This equates to a 4,452 MWrequirement. But, power stations are not switched on/operative 100% of the time.The average baseload is about 66%. so to deliver 39TWh you would need a 6745MW capacity of biomass

1.3. Land requirements for biomass power plants are significant. A 20 MW plant with 10t (oven dry)/hayields would require 7,000 ha which for 10% land use will require land within a 14 km radius of apower plant (R. Booth, Shell Intl. Petroleum Co, 1993). Thus, taking πr2 as the area of a circle, thebiomass source around the station will cover 616 sq km. If the land requirements for sourcing allbiomass (other than biogas) are comparable the land demand to fulfil the HMG targets is staggering.

1.4. If instead of 20MW you aim at 6745MW this will require a feeder area 337 times greater – 207,746sq km.The area of Wales is 20,764 sq. km; the area of England is 130,410 sq. km.; and the area ofScotland is 78,722 sq. km So, if the biomass were to be sourced in the UK then an area of feeder stock10 times the size of Wales, or more than that of England and Wales combined would be required.

1.5. Wherever the feeder area is located, this is going to imply a vast number of lorry movements into thebiomass plants.The assumption in Government thinking is that biomass is carbon neutral.The necessityfor a vast system of lorry movements clearly makes that an untenable position, not to speak of the airquality pollutant effects from the lorries.

1.6. The underlying assumptions made for the CO2 emission figures can be found in a paper by ChristinePout of the Building Research Establishment CO2 Emission Figures for Policy Analysis. Here, woodlogs/chips/pellets are classified as renewables and are attributed (relatively low) fuel emission factorsof 0.025kgCO2/kWh.This is to take account of planting, harvesting, sawing up and delivery of thesebulky and heavy materials to the point of use. What is the basis for wood’s low score? The paperexplains: “These estimates are notional and are not based on detailed assessments.” In other words,it’s a guess to encourage a supposedly “renewable” energy source.The Government’s Biomass Strategygoes one step further :“For all biomass resources no net emissions during production assumed.”That’sconvenient, but patently absurd.

1.7. Para 4 of the introduction makes it plain that the idea is to become“less dependent on imports of fuelfrom abroad.”The statement in para. 3.1.3., “The UK has the natural resources to fuel an increase onthis scale” would accord with this aim. However, the paper begins to let the cat out of the bag in para3.1.3: “An increase on this scale means we will have to make the best possible use of UK-producedbiomass resource, including waste, as well as meeting some of the increased demand throughsustainable imports.” Para 4.3.6 confirms it: “Given the likelihood that imports of woody biomass fuelmay be necessary to support high market levels of biomass heat, this issue is important.” No figure issupplied on the likely level of imports.We suggest it will be a high figure, and that it should be known.

1.8. Para 1.4.2 states that HMG wants to“enhance security of supply.” If we are to be reliant on heavy importsof biomass to the extent that it displaces native sources of supply then it will have the opposite effect.

1.9. Government also wants to foster a big move to wind power. A question must arise as to where the4,000 new 3MW stations the paper foresees are going to be placed on land if the biomass demandsare sourced in the UK..

1.10. Para 3.2.7 foresees a need for 25GW of offshore wind capacity by 2020, too. Fells regards this targetas “bizarre.” It, “would mean installing 10 turbines a day from now to 2020 (utilising the average 60possible working days per year).This is 10 times the best installation rate achieved anywhere for offshoreinstallation, yet the UK has just one suitable heavy-lifting barge available at the current time…(MPIResolution) capable of installing these huge machines in the seabed, and that cost £75 million.”

IS IT COST-EFFECTIVE?

2.1. The policy framework for achieving this fundamental shift must be “cost-effective” (Para 1.5.1). But, thewhole policy is built on moving energy consumption to technologies which are not cost-effective. Para14 of the introduction admits there would need to be a hefty subsidy to provide “a substantial incentiveto jump-start this new market.” One reason is that, “many of the technologies are not yet cost-competitive at their current state of development and with current fuel and carbon prices” (para. 56).

2.2. The cost of these policies is already substantial and is due to increase significantly. Para. 74 admits that“about 7% of current domestic energy bills arises from climate change policies”…”By 2020, we estimate

that the measures set out in this consultation document, taken together, could result in increases inelectricity bills of 10% to 13% for domestic and 11% to 15% for industrial customers; increases in gasbills of 18% to 37% for domestic and 24% to 49% for industrial customers.”There must be doubts aboutthe public acceptability of these political price increases at a time when consumers are reeling fromhigh and volatile energy prices.The consultation paper pays lip service to fuel poverty but does notestimate the numbers of the population that would be forced into fuel poverty by these Government-induced price rises.

2.3. The UK Fuel Poverty Strategy 6th Annual Report (2nd October 2008) admits,“Our 2006 figures showthere were approximately 3.5 million households in fuel poverty across the UK, an increase of 1 millionhouseholds since 2005.Around 2.75 million of these were vulnerable households.”These figures predatethe sharp rises in fuel costs of 2007/8: it is safe to presume that the fuel poverty strategy, failing in2006, will have plunged high numbers of households into fuel poverty since then.The extra costsalready inflicted by climate change policy (7%) will be dwarfed by future increases imposed by climatechange policy (up to 37% for gas), and will further undermine the Government’s already failing fuelpoverty strategy.

2.4. Para 7.4.2 points to a potential problem of inflating food prices, too:“We recognise that increasing theproduction of biomass energy crops has the potential to lead to competition with food crops for landand so to increased food prices. To a limited extent, recent commodity price rises are due to anexpansion in the production of biofuels.”The paper does not attempt to quantify the likely food priceincreases, nor how to avoid repeating the mistakes of biofuels.

2.5. With regard to wind, Fells points out,“The National Audit Office identified wind power as one of themost expensive ways of reducing carbon emission, with recent reports claiming that abating one tonneof carbon costs between £280 and £510.This compares with £10 to £20 per tonne in the EuropeanEmission trading scheme (National Audit Office, “Department Of Trade and Industry: RenewableEnergy”, report by the Comptroller and Auditor General, Hc 210; Session 2004-2005, 11 February 2005& D Helm,Wall Street Journal, 18 March 2008).

2.6. There is a government impact assessment attached to the consultation.The cost of the policies to2030 is estimated at £67bn (PV).The total benefits to 2030 (mainly in carbon savings) are £5.6bn(PV). Thus, the net cost of the policies will be £61.4bn even after the climate change benefits areincorporated.This is the economics of the madhouse. Para 23 seeks to soothe these concerns:“But itis important to recognise what these costs are paying for: a reduction in the risk of catastrophic climatechange and dangerous energy insecurity.”The implication must be that netting off the climate changebenefit, £61.4bn is the cost of improving our energy security – is in itself unacceptable (see para. 1.8.).

WILL WIND INCREASE SECURITY OF SUPPLY?3.1. The short answer is “No.”The Consultation paper admits wind’s problems which it is worth quoting

in extenso:

3.9.2 “The power available to a wind turbine increases with the cube of the wind speed.Therefore, smallchanges in wind speed can have a significant impact on output. With a good dispersion of windturbines, the variability of wind output over the UK as a whole can be expected to be smoother thanoutput from any individual site or region. Nevertheless, the intermittent nature of wind power inparticular will require new, more dynamic ways of operating the network, and back-up generatingcapacity to maintain current levels of system reliability.

3.9.3 More generally, a higher level of penetration by generating capacity whose output is variable (outputlevels can change rapidly), with varying degrees of predictability means that the whole electricitysystem needs to become more flexible.This is not only a challenge for the system operator but alsohas implications for the efficiency, reliability and economic viability of other electricity generating plant.

3.9.4 Analysis of wind patterns suggests that, at high penetration levels in the UK, wind generation offersa capacity credit of about 10-20%. This is an indicator as to how much of the capacity can be

statistically relied on to be available to meet peak demand and compares to about 86% forconventional generation.This means that controllable capacity (for example fossil fuel and otherthermal or hydro power) still has to be available for back-up at times of high demand and low windoutput, if security of supply is to be maintained. New conventional capacity will, therefore, still beneeded to replace the conventional and nuclear plant which is expected to close over the nextdecade or so, even if large amounts of renewable capacity are deployed.

3.9.6 In the British market electricity generating capacity does not earn money simply for being available;it earns money only when it actually generates.This is consistent with striking the optimal balancebetween costs and benefits of spare capacity on the system. It also means that wholesale electricityprices are likely to rise to very high levels at times when high demand and low wind speeds coincide.This is necessary in order to cover the costs of plant which does not get to generate very often, andso ensure that generators are incentivised to provide back-up capacity.

3.9.7 It is nevertheless possible that uncertainty over returns on investment, because of the difficulty ofknowing how often plant will get the opportunity to run, will discourage or delay investment in newconventional capacity – or speed up the closure of existing capacity – and hence increase the risk ofoccasional capacity shortfalls.”

3.2. So, we have a technology that is not cost-effective and is not dependable to the extent that it willincrease the risk of capacity shortfall, will be challenging for the grid to absorb, will increase the priceof the necessary standby generation, and will necessitate investment in the building of new conventionalplant, some of which will be coal (para 1.2.5). Coal is traditionally the dirtiest source of fuel giving offcarbon dioxide, radiation and air pollutants in such quantities that significant social and environmentalexternal costs are borne by society and the environment. The Environment Agency issued a pressrelease on 25th September 2008 stating that coal was not “environmentally sustainable” and that nonew coal power stations should be built unless they were equipped with practical carbon capture andstorage.There is no functioning prototype of such technology in the UK.We do not yet know whetherit is feasible, fit for purpose, or how much it will cost. Building coal–fired plant trusting that thetechnology will come right is a gamble with the environment.

3.3. Sadly, the exact proportion of conventional back up that wind would need is not revealed in the paper.It is impossible then to estimate how much extra carbon is put into the air as a result of new coal tocover wind’s back.The Danish grid employed 50% more coal-generated electricity in 2006 than in2005 to cover the failings in wind. If this is reflected in the UK it must place a question mark over thegreen credentials of wind.

3.4. Fells is similarly sceptical:“Renewable energy can play a part, but it is not base load.Wind farms require90% back-up to deal with windless days, so a large increase in wind-generated capacity actuallyexacerbates the problem.Wind currently has a nameplate capacity of 2546MW from 2032 turbines,which actually delivers an average production of 635MW.That could be doubled over the decade butwind power is intermittent and thus makes an unpredictable contribution.”

IS BIOMASS SUSTAINABLE?4.1. The key assumption lies on p.11 of the Government’s “Biomass Strategy”: "2.3 Biomass is renewable

and generally has low carbon characteristics. It is theoretically a carbon-neutral fuel – the carbonemissions from the use of biomass as a fuel can be offset by the carbon captured during its growth."This theoretical assumption then morphs into a general presumption that biomass is in practice alwayscarbon-neutral.

4.2. The superstructure of presumption then spreads widely. Prominent standards for carbon footprintingpresume that biomass is inherently carbon neutral. Such standards – for instance the EU’s EmissionsTrading Scheme, PAS 2050, the UK Emissions Trading Scheme, and SAP 2005 (which essentiallydetermines the way houses are built in future) automatically exclude from a footprint carbon dioxideemitted in biomass combustion. The Code for Sustainable Homes quotes biomass heating as one

means of a house complying with the zero carbon definition; the Eco-Town definition depends on thehousing in the town achieving zero carbon definition under the Code. However, presumed carbonneutrality can lead to absurd conclusions, e.g. that the climate impacts of preserving a forest – orburning the same forest – are equal. Moreover, it generally leads to an understatement of biomassfootprints. For instance, if a forest is harvested intensively for fuel, as opposed to being preserved, thismakes no difference in today’s footprint, even if the carbon stock of the latter clearly exceeds that ofthe former.

4.3. A more comprehensive assessment is possible – and desirable. Such an approach has also been broadlyproposed in International Standard 14064-2, which includes requirements to report GHG sources,sinks and reservoirs. Although this standard applies to project footprinting and is presented rathergenerically, it clearly can be applied to footprinting of organisations or products. Paragraph 7.4.6 of theconsultation appears to accept this point:“Greenhouse gas emissions over the full life-cycle of biomassshould be taken into account.”

4.4. Presuming biomass carbon-neutrality is not only inaccurate, it also contravenes UNFCCC reportingrules.As Article 3.3 of the Kyoto Protocol states,“net changes in greenhouse gas emissions by sourcesand removals by sinks resulting from direct human-induced land-use change and forestryactivities…measured as verifiable changes in carbon stocks in each commitment period, shall beused…” to measure compliance with Kyoto targets. It also contravenes UK reporting practice, whichis Kyoto compliant.

4.5. To avoid absurd or inaccurate results and to comply with UNFCCC rules and UK practice, Eric Johnsonof Atlantic Consulting has suggested that carbon footprints, rather than applying sequestration creditsand emission debits, instead apply a ‘carbon-stock change’ line item.This method brings the entire forestinto the life-cycle system, and it generates accounts more consistent with UNFCCC aims.

4.6 To show how this proposed method would work, two scenarios for changes in carbon stocks arepresented. In the first scenario, standing trees are being cut and used for fuel. Net carbon stocks in theforest are being depleted, either via deforestation or conventional harvesting.The footprint is equal tothat calculated by the current method, without the sequestration credit (which in the case of carbon-stock depletion, is not justified).

Proposed footprint method, with biomass carbon-stock depletion

In the second scenario, waste wood is being used for fuel. Net carbon stocks in the forest are notaffected.The footprint is equal to that calculated by the current method, with the sequestration credit.Proposed footprint method, without biomass carbon-stock depletion

Footprintg CO2eq/MJ

Cultivation-to-harvest or productionProcessingTransport

Fuel Logs Natural gas

Scenario Biomass carbon-stock depletion

Combustion (non- CO2 emissions) 2.15 55.1Carbon-stock decrease 164.25

Total 169.15 70.0

2.50

0.25

3.63.57.8

4.7. These are only two out of many possible scenarios for the biomass footprint. Clearly, a number ofintermediate scenarios can be envisioned, depending on the extent of carbon stock depletion. Scenarioscan also be envisioned where carbon-stock is accruing, which could lead to a net negative footprintfor the biomass fuel. Burning wood is not always good. Para. 1.5.2 of the consultation emphasizes thatthe framework must be “compatible” with sustainability.There will have to be very clear guidelines andassessments made of life-cycle biomass carbon footprints before we can be assured that the biomasswe burn will be sustainable, and so that we avoid the costly mistakes of biofuels.This in turn raisesquestion marks about the true environmental status of sustainable homes, eco-towns and carbon-zerohomes of the future. If they depend upon bad biomass then their whole conception is flawed. Para. 7.4.6.admits, “We will need to consider what processes, guidance and regulations may need to be put inplace.” Quite.

IS IT COMPATIBLE WITH THE AIR QUALITY STRATEGY?

5.1. Again, it is worth quoting the consultation paper in extenso:

4.6.11 “Air pollution, in the form of fine particles and nitrogen dioxide, is still a major concern in urbanareas in the UK.The EU Air Quality Directives set mandatory limits on the concentration of both,which many urban areas are struggling to meet primarily due to pollution from transport andtransboundary sources. All combustion processes produce these pollutants to some extent,dependent on the type of combustion and the fuel used, including biomass boilers and biomassCombined Heat and Power. However, these emissions can be significantly reduced through highquality burner design and modern scrubbing technologies. Some responses to the Heat Call forEvidence highlighted the potential dangers of airborne pollutants from biomass combustion. Giventhe potentially crucial role that biomass heat could play in delivering renewable heat, it is worthconsidering this issue in some depth.

4.6.13 Air quality in urban areas is also covered by the Clean Air Act 1993, which requires that in ‘SmokeControl Areas’, non-smokeless fuels (including biomass) must be burnt in an approved or ‘exempted’appliance. However, it is generally accepted that modern biomass boilers can easily meet these,

4.6.14 The potential cumulative effect on air quality of fine particles and nitrogen dioxide emissions from afuture large-scale deployment of biomass appliances or plant is not yet well understood...In ruralareas the impact on air quality, and public health, is likely to be lower, due to both lower populationdensities and ‘background’ levels of pollution.

4.6.15 The results from preliminary analysis undertaken by AEA Energy and Environment on behalf ofDEFRA indicates that if high levels of solid combustible biomass were used in dense urban areas,where heat demand is highest, the impact on air quality would be likely to be very significant. Stringentemission controls on individual plant would mitigate this effect

4.6.17 There is currently no clear advice about the locations, types and sizes of boilers that would not cause

Footprintg CO2eq/MJ

Cultivation-to-harvest or productionProcessingTransport

Fuel Logs Natural gas

Scenario No biomass carbon-stock depletion

Combustion (non- CO2 emissions) 2.15 55.1Carbon-stock decrease 0

Total 4.9 70.0

2.50

0.25

3.63.57.8

air quality issues, and there is currently no agreed European test procedure.

4.6.18 In response to these issues we are considering possible measures that will allow the deployment ofbiomass-fired plant, in both rural and urban areas, at the maximal sustainable rate that does notcompromise our objectives on air quality or public health.

4.6.25 Given that equipment deteriorates over time and needs to be operated properly, we may need toupdate regulations to ensure that installed equipment continues to be run in a way that meetsemissions standards. Any type of approval scheme may therefore need to be complemented byarrangements to ensure that emission standards are maintained. In other countries, including Austria,Germany, Denmark and the United States, concerns over air quality deterioration caused by olderstyle biomass boilers has led to the introduction of an MOT-type scheme, whereby the owners arerequired to have their boilers serviced on a regular (for example, annual) basis. If arrangements tomaintain emission standards are considered necessary for the UK, proposals as to the mechanism fordoing so will be the subject of a later consultation.”

5.2. Later, the consultation paper points to the difficulties with burning large quantities of waste woodbiomass in para. 7.5.34:“The UK is short ofWaste Incineration Directive-compliant combustion capacitythat can burn renewable waste and non-waste fuels, allowing this potential resource to be used togenerate energy”. Again, note Para. 7.5.35: “The principal constraints to the provision of suchinfrastructure are:”

- the high investment costs of complying with the Waste Incineration Directive .

- public hostility to combustion plant, particularly those burning waste.

5.3. Let’s sum that up. Biomass boilers would cause significant pollution in urban areas.The pollution theywill cause in rural areas is more acceptable because of lower existing levels of pollution in thecountryside. We do not know yet the effect of particulates and NOx from biomass boilers. As theboilers age they will pollute more.We don’t have the combustion plant clean enough to comply withEU rules to burn waste wood in quantity; it would be expensive to build; and, public reaction to themis likely to be hostile.

5.4. The introduction to the recent Consultation on Draft Local Air Quality Management Guidance states,“In the light of current Government policy, it is particularly important that climate change and air qualitypolicies are joined up…It is essential that technology which is used to reduce greenhouse gas emissionsis used in the right place, and not in an area where such technology will impact on the ability of thelocal authority to work towards air quality objectives…Without proper consideration, there is thepossibility that some policies to mitigate climate change will have a negative impact on air quality andvice-versa.Where practicable, synergistic policies beneficial to both air quality and climate change shouldbe pursued.”This echoes the sentiments expressed in the Government’s Air Quality Strategy (AQS):“Where practicable and sensible, synergistic policies beneficial to both air quality and climate changewill be pursued,” (para. 95).As this consultation document makes clear there is no synergy here, merelyan attempt to moderate the consequent air pollution and concentrate it in rural areas.

5.5. The Clean Air Act targets smoke and not all the other pollutants that wood-burning emits.The AirQuality Strategy itself does not target all of them either. Wood burning emits in addition to otherwisesequestered carbon:

• Creosote (carcinogenic and possibly teratogenic)

• Carbon Monoxide (an Air Quality Strategy [AQS] targeted pollutant, dangerous for thosewith existing coronary or lung disease)

• Methane (a potent greenhouse gas and asphyxiant)

• Ozone (an AQS target: an irritant greenhouse gas reducing lung function and increasingincidence of respiratory symptoms)

• Methyl Chloride (toxic, mutagenic, carcinogenic, possibly teratogenic)

• PAHs (an AQS target; carcinogenic – main source in UK: domestic coal and wood burning)

• Dioxins, powerful carcinogens, exceeded only in toxicity by radioactive waste, lasting for7 years in the human body and washed into plants and contaminating our food supply.Burning 1kg of wood produces 160mcg of total dioxins.Wood burning is the third largestsource of dioxins in the USA.

• Lead – burning 2.2lbs of wood produces 0.1mg-3mg of lead which we absorb byrespiration. Lead is a neurotoxin associated with lower intelligence and delinquent behaviour.

• Radioactive caesium – a study in the US found that fireplace wood ash contained up to 100times more radioactive caesium than would be allowed as a discharge from a nuclear plant.

• Particulates (an AQS target: carrying quantified large risks to human health and lifeexpectancy): a new analysis by researchers George Thurston of New York UniversitySchool of Medicine and Arden Pope of BrighamYoung University identified deaths fromischemic heart disease and other forms of heart disease, such as hypertension, and aorticaneurysms.They found that long-term exposure to tiny particles of soot and dust, orPM2.5, was linked to a 31% percent increase in the risk of dying from ischemic heartdisease, including fatal myocardial infarctions.This risk is comparable to the increased riskof dying of ischemic heart disease found by this study to be associated with being aformer smoker (33%). "Biomass (wood) smoke is composed of a relatively equal mixtureof coarse and ultrafine particles and can penetrate deeply into the lung, producing avariety of morphologic and biochemical changes," (Dr. Ramírez-Venegas, Public HealthNews: 20/2/2006).

• Nitrogen Dioxide (an AQS target, harmful to human health)

• Sulphur Dioxide (causes and aggravates symptoms particularly in patients with pre-existing asthma. In association with particles, it raises mortality both in the short and thelonger term; SO2 advances 3,500 deaths/yr. in Gt. Britain and provokes an additional3,500 hospital admissions for respiratory problems - QEAP)

• and wood smoke (carcinogen chemically active in body 40 times longer than tobaccosmoke, estimated to cause 2.7-3m premature deaths worldwide [WHO, 1997]).

5.6. The question must be asked as to whether the supposed renewability of wood and the potential forcarbon recapture is enough to outweigh such externalities. It is not a question addressed by theconsultation paper. Currently, the UK is expected to miss its EU targets on particulates and ozone. Amassive shift to wood burning will not help.

5.7. The Government’s previously issued Biomass Strategy states in para. 6.19., “Displacement of oil tendsto lead to decreases in SO2 emissions, but increases in other emissions such as PM or NOx. Substitutionof natural gas with biomass, on the other hand, generally leads to increases in emissions of all majorpollutants…There are substantial gaps in reliable emission data for biomass combustion for energy.”When biomass displaces coal we accept there may be some improvement in emissions, but the policyskew to biomass will inevitably displace oil and gas, too – and the price will be paid in higher externalities.

5.8. The result of this lack of synergistic policies will be extra but avoidable air pollution – air pollution thatis killing people, shortening lives, and causing environmental damage now rather than at some vaguelydefined date in the future. Larger particulates alone - PM10s – are estimated to cause damage in theUK valued at £10.5bn-26bn annually, to advance 8,100 deaths a year and to cause 10,500 extra hospitaladmissions a year. The AQS points out that progress on road transport measures and in electricitygeneration has produced benefits in reduced pollution worth up to £69bn to date.This is pollution thatit pays to fight rather than ignore – or add to.We need some accurate quantifications of the pollutantemissions from the big move to biomass, and the damage they will cause.

5.9. It seems that the bias to biomass, as with biofuels, has run ahead of science and market realities. Burningwood is not good for the environment or human health, and using wood as a fuel does not equatenecessarily to reducing climate change.

HAS GOVERNMENT PICKED THE RIGHTWINNERS?

6.1. The data assembled above would suggest that it has not. Fells thinks the record is not good either :“Inconsistent intervention, by ‘cherry picking’ technologies on unscientific grounds, is not helpful either.The renewables market has been distorted through unbalanced support for low capital renewableswith least return in energy terms, such as wind.”

6.2. The Government is favouring fuel technologies not viable in the market to displace other fueltechnologies which are viable and require no subsidy. Para. 4.5.1 states: “Some of the renewable heattechnologies that could be used within the UK have higher upfront capital costs than fossil fuelalternatives – even if a carbon price is included – and heat customers will need a financial incentive toencourage them to switch to renewable energy.”

6.3. The main target of the switch will be rural areas off the gas main (see para. 4.1.6 and 4.4.6.).This is partlybecause HMG is blasé about increasing air pollution in rural areas but also because: “This is whererenewable heat can be brought on for least cost in the nearer term” (para. 4.4.6.). Calor Gas has itsmarket heartlands off the gas main in rural areas. Para. 10.7.3. warns that,“We must remain vigilant thatour interventions do not unduly limit the number and range of firms in relevant markets, nor excessivelylimit firms’ abilities and incentives to compete.”We fear that the implications of this renewable energystrategy will inevitably remove our ability to compete, and destroy this UK based industry.

6.4. Government intends that the change will be driven by a “financial instrument” targeted first at ruralareas: “If renewable heat technologies prove to be more cost-effective off the gas grid, then that iswhere a financial support instrument can be expected to drive increased installation rates first”(para.4.6.37).

6.5. The likely “financial instrument” is described.“The Government’s emerging thinking is to favour a RHI”(para 4.5.36). How will it work? Para 4.5.11 explains:“For the heat sector, a RHI could be administeredby assigning certificates to the heat producers based on the renewable heat generated, with energysuppliers (or another organisation) required to purchase these certificates at a pre-arranged price.” Box4.2 makes it clear that “The cost of the scheme would be expected to be passed on by suppliers toall buyers of non-renewable heating fuels.”The consumers of fossil fuels such as oil and LPG will haveto pay heavily for the privilege: para. 4.5.20 shows that subsidy to biomass and the tax on LPG/oil wouldhave to be “very substantial”: “Given the evidence on energy efficiency measures, which indicates alimited responsiveness of households and small businesses to increased energy costs, the increase infossil fuel prices would need to be very substantial to drive even a limited uptake of renewable heat.This suggests that while such measures to alter relative prices may be a useful step within a packageof measures, alone they are unlikely to deliver the step change in renewable heat uptake required.”Thus,LPG which has a cleaner emissions profile than coal, electricity, oil or biomass will have to pay dearlyto heavily subsidise an otherwise non-competitive fuel in order to displace itself from its market inrural areas.The euphemistic “financial instrument” is the State forcing successful industries in the UK totax themselves out of existence in favour of their otherwise unviable competitors.What lessons mightother industries thinking of investing in the UK draw from that?

6.6. This is in pursuit of a policy which has a net cost to the taxpayer of £61.4bn by 2030 (after taking intoaccount climate change benefits), that will increase dependence on imports, that will most probablyworsen air quality in rural areas in particular, using a fuel source whose genuine sustainability andcontribution to reducing carbon is uncertain and to which public reaction is likely to be hostile if itinvolves building waste incineration plant. It does not seem well thought out.