life after the energy crops scheme
DESCRIPTION
This presentation was given at the UK Energy Now Conference in February 2014.TRANSCRIPT
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
Copyright © NNFCC 2012.
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
Copyright © NNFCC 2012.
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
Copyright © NNFCC 2012.
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)
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
Copyright © NNFCC 2012.
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
Copyright © NNFCC 2012.
RHI – Non Domestic Scheme
Applications for
Non-domestic RHI
(DECC Data)
574MW of installed
capacity by Oct 2013
Copyright © NNFCC 2012.
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)
Copyright © NNFCC 2012.
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
Copyright © NNFCC 2012.
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
Copyright © NNFCC 2012.
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
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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