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

6000

8000

10000

12000

14000

16000

2010 2011 2012

Renewable Power (GWhe)

otherbiomass

AD

co firing

plantbiomass 0

200

400

600

800

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

0

1000

2000

3000

4000

5000

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

6

8

10

12

14

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

20,000

25,000

0

500

1,000

1,500

2,000

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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