News Extra: DECC climbs down over Drax subsidy and introduces calculator to ensure low biomass emissions
01 September 2014
The UK Department of Energy and Climate Change (DECC) has reversed its decision to refuse subsidies for one of energy giant Drax’s coal-to-biomass conversion projects.DECC granted subsidy support to the first of Drax’s conversion projects, but refused support for a second similar project, potentially putting the company’s entire coal-to-biomass programme at risk.
The decision prompted a legal challenge which culminated in a High Court ruling in Drax’s favour.
The final investment decision from Drax, which is situated near Selby in Yorkshire, now depends on the contracts being granted state aid approval by the EU, but this seems likely as similar renewables projects have been approved recently.
DECC’s initial refusal to support the second Drax project followed increased questioning of the environmental benefits of biomass by environmental NGOs and other organisations sceptical of the claims of reduced carbon emissions from biomass, when compared to gas and coal.
Claims were made earlier in 2014 that a major source of wood pellets for Drax was whole trees from primary swamp forest in North Carolina, rather than the claimed brash and detritus left over from other forestry operations in the state. This has a significant effect on wildlife habitat, as well as being worse than traditional fossil fuels in terms of carbon emissions.
Some environmental NGOs claimed the biomass operations at Drax produce similar levels of CO2 to coal, and more than twice as much as gas, even before the high levels of emissions from transporting the pellets 6,000 km across the Atlantic.
Supporters of biomass say the felled trees will regrow, resequestering the CO2 from burnt pellets by as much as 80%.
The UK is committed by law to ensure that by 2020, the proportion of Britain’s electricity generated from renewable sources has almost tripled to 30%, with more than a third of this from biomass.
UK Government green energy subsidies to Drax amounted to £62.5 million in 2013, and this is set to triple by 2016 as the company increases its biomass capacity.
To date, only one of Drax’s six turbine units has been converted from coal to biomass: another two are set to follow in the next two years. Eventually, the company says, its 3.6 gigawatt capacity – about 5% of the UK total – will be predominantly biomass, burning seven million tons of pellets a year. Most of this will be sourced outside the UK, predominantly from North America.
In the longer term, the Government has set a strike price of £105 per MW/hr for Drax’s biomass electricity – £10 more than for onshore wind energy, and £15 more than for power from the new nuclear plant to be built at Hinkley Point in Somerset. The current UK electricity price is around £50 per MW/hr.
To meet complaints about the unsustainability of the wood sourced for UK biomass plants, in late July DECC announced the release of a new tool for calculating carbon emissions from this energy source. The Bioenergy Emissions and Counterfactual Model has been designed to allow developers to make sure they are sourcing their biomass responsibly.
The tool looks at different scenarios for sourcing fuel from woody biomass resources in North America likely to be available for pellet production by 2020,taking into account alternative land use for each scenario and indirect impacts such as fuel transportation costs.
DECC Chief Scientific Advisor David MacKay said: “The calculator looks at the changes in the amount of carbon stored in forests in North America when assessing the benefits and impacts of various bioenergy scenarios. It gives new information about which biomass resources are likely to have higher or lower carbon intensities, and so provides insight into a complex topic.”
Energy and Climate Change Secretary Ed Davey said: “In the short term, biomass can help us decarbonise our electricity supplies, and we are committed to supporting cost-effective, sustainably produced biomass.
“This calculator shows that, done well, biomass can offer real carbon savings – which is why we are tightening our rules for sustainable biomass. Any producer who doesn’t meet those standards will lose financial support from next year.”
Drax chief executive Dorothy Thompson said that the company was fully committed to only using sustainable material at its soon to be converted power plants.
“Sustainability has always been absolutely central to our biomass strategy,” she said. “The academic study by DECC confirms what Drax has always argued, that there is a right way to source biomass and a wrong way. We welcome that it confirms the fact that where biomass is sourced sustainably major carbon savings can be delivered.”
She added that there remained a compelling economic and environmental argument in favour of biomass power. “When we complete our plans to convert three of our generating units to burn sustainable biomass in place of coal we will be able to deliver cost effective, renewable electricity to the equivalent of over three million homes and reduce our carbon emissions by over ten million tonnes a year,” she said. “No other renewable can make such an impact and provide electricity at scale day-in, day-out whatever the weather.”
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