Published on February 18, 2014
Life after the Energy Crops Scheme David Turley, NNFCC Lead Consultant Biomass Feedstocks Energy Now, Feb 2014, Telford
What have we achieved in the UK Renewable Power (GWhe) 16000 14000 12000 10000 8000 6000 4000 2000 0 Renewable Heat (1,000 toe) 1400 other biomass AD co firing 1200 other biomass 1000 800 wood 600 400 plant biomass 2010 2011 2012 Copyright © NNFCC 2012. plant biomass 200 0 2010 2011 2012
Energy crop areas supported by planting grants Natural England data on area supported (ha) to November 2011 9496 ha in total 8000 7000 6000 5000 ECS2 2007-2013 4000 ECS1 2000-2006 3000 2000 1000 0 SRC Copyright © NNFCC 2012. Miscanthus
Energy crop planting ETI and E4Tech, based on Natural England data Copyright © NNFCC 2012. 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 Copyright © NNFCC 2012.
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 Copyright © NNFCC 2012.
UK Biomass feedstock requirement for existing and power plants in planning or development by developer/generator (NNFCC Data) Million tonnes of pellets per annum 18 16 1.57 14 0.51 0.51 12 10 8 6 6.78 1.57 0.51 - 0.00 Drax 4.52 Eon 6.96 Eggborough Power 1.74 1.74 Feedstock demand - 2015 Copyright © NNFCC 2012. Helius Energy RES 0.51 4 2 RWE Lynemouth Feedstock demand - 2020
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 Copyright © NNFCC 2012.
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 Copyright © NNFCC 2012.
Development Potential 4% Total UK heat use by application (70 mtoe) 16% Space heating Water heating 4% 12% Copyright © NNFCC 2012. Cooking/catering Process use 64% Drying/separation
UK heating installations by fuel feedstock 20,000 1,500 15,000 1,000 10,000 500 5,000 0 1968 1973 1979 Solid fuel DECC Data Copyright © NNFCC 2012. 1984 Electric storage 1990 1995 Other electric 2001 Oil 2006 Gas 0 2012 Count 000's (gas only) 25,000 2,000 Count, 000's (not incl. gas) 2,500
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 Copyright © NNFCC 2012. Pelletstar Wessex Biomass
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 Copyright © NNFCC 2012.
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! Copyright © NNFCC 2012.
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 Copyright © NNFCC 2012.
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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. | | www.nnfcc.com | firstname.lastname@example.org
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