Putting it all together:Policy directions

Cameron Maxwell, Business Development, FCS

FEG Autumn Symposium, 8 September 2011

Policy directions2

Forestry is always looking for a White Knight

Policy directions3

SG policy

The Scottish Government would prefer to

see biomass deployed in heat-only or

combined heat and power schemes, off

gas-grid, at a scale appropriate to make

best use of both the available heat, and

of local supply.

Policy directions4

Rationale

• Heat is 50% of total energy demand

• Make most efficient use of a finite resource

• Biomass key to delivering 11% renewable heat

target

• can make a minor contribution to electricity baseload

• off gas-grid ensures highest carbon savings

• promote development of decentralised energy

generation.

Policy directions5

Balanced approach

• Timber processing industries:• low carbon products for construction etc• contribution to economic development

• New income stream for forest industries• Better returns for growers• Development of supply chain• More woodland management• Encourage investment in new woodland

• Heat – more incremental increase in demand

• Local use

Policy directions6

Resource

• Softwood production - 6.3m green tonnes

• Sawmills

• Wood panel

• Paper and paperboard

• Wood fuel - 1.6m green tonnes (40% recycled)

• Production Forecast, 7.3m green tonnes in 2020

• UK 9.8m gt (2010), 11.8m gt (2020)

Policy directions7

Policy directions8

Biomass demand

Forestry Commission Scotland: Wood Fuel Demand and Usage Update Report 2009. Hudson Consulting (www.forestry.gov.uk/scotland)

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

2004/2005 2005/2006 2006/2007 2007/2008 2008/2009 2009 2010 forecast

Woodfu

el

Use

(odt)

OTHER INDUSTRIAL AND COMMERCIAL HEAT ONLY <1,000odt/yr

INDUSTRY/COMMERCIAL (using 1,001 to 10,000 odt/yr)

MAJ OR INDUSTRY/COMMERCIAL (using >10,001 odt/yr)

Policy directions9

Availability

• WFTF update report published in March 2011

• Potential available resource

• 0.8m green tonnes in 2010-11,

• 2.4m green tonnes in 2017-21

• Increased harvest, forest residues, recycled wood

• Renewable heat 2.8% (biomass 90%)

• Additional 1m green tonnes in heat only plants would deliver additional 3% renewable heat

Imports

• May be a significant role for imported biomass

• But global market is immature and likely to be

volatile

• Use dependant on:

• price, availability and evidence of sustainability

• Use should support maximum heat use and

de-centralised energy production.

Policy directions10

Going forward

• Renewable Obligation Banding Review• Review support for biomass to align with policy

• Analysis:• Best use of wood fibre and wood fuel

• Future wood fuel demand

• Likely impact of the Renewable Heat Incentive

• Proposals in planning

• Energy forestry

Policy directions11

UK Government policy

• Renewables Road Map

• Significant role for biomass electricity

• Enhanced co-firing, conversion, dedicated biomass

• ROC Banding Review

• Bioenergy Strategy/Bioenergy Review

Policy directions12

UK ambition (m odt)

Policy directions13

Biomass plant Scenario 2010 2020 2030Dedicated biomass <50MW Low 3 5 8

Medium 3 6 12high 3 7 13

Dedicated biomass >50MW Low 0 5 13Medium 0 6 15high 0 15 30

Solid biomass co-firing Low 7 1 0Medium 7 1 0high 7 1 0

Solid biomass conversion Low 0 0 0Medium 0 6 4high 0 14 10

Total biomass demand Low 10 11 21Medium 10 20 32high 10 37 53

+ 5m odt for the renewable heat target

Demand for UK fibre (m odt)

Policy directions14

Biomass plant Scenario 2010 2020 2030Dedicated biomass <50MW Low 3 5 8

Medium 3 6 12high 3 7 13

Dedicated biomass >50MW Low 0 0 1Medium 0 1 2high 0 2 3

Solid biomass co-firing Low 1 0 0Medium 1 0 0high 1 0 0

Solid biomass conversion Low 0 0 0Medium 0 1 0high 0 1 1

Total biomass demand Low 4 5 9Medium 4 8 14high 4 10 17

UK biomass inputs

Policy directions15

Global resource

Policy directions16

Timber development

• Green credentials• Renewable• Carbon substitution• Carbon storage

• Incentivisation• Promotion, • Education• R & D, new products, systems, • Building regulations, embodied carbon.

Concerns/conclusions

• Scale of demand• Tilbury, Drax

• Pellet plants• Georgia, USA – 1m tonnes• Russia – 2-3m tonnes• Canada – 2m tonnes

• Electricity generators will go for most accessible material first

• Ability to pay• DECC: 5-15% price increase to 2020

• Wood will travel

Policy directions18

Policy directions19