www.adas.co.uk

Wood heat and energy in rural Wales

Dr Rebecca HeatonSenior Renewable Energy

Consultant

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UK CO2 Targets Firm Government commitment -

UK Climate Change programme

Legally binding Kyoto GHG reduction target of 12.5% below 1990 levels by 2008-2012

Tougher domestic goal of reducing C02 emissions by 20% by 2010

Energy White Paper – 60% reduction by 2050

Other1%

Industrial Processes

20%

Transport32%

Buildings47%

UK Total CO2 Emissions473 Million Tonnes

Main policy drivers:

The Climate Change Levy – a tax on energy used by industry, commerce and public sector 0.43 p (0.57 €) per kWh electricity (day and night) 0.15 p (0.20 €) per kWh gas and coal 0.07 p (0.09 €) per kWh LPG

Renewable Obligation – requires an electricity supplier to demonstrate it has purchased a % of electricity from renewable sources – 5.5% in 2005/06, rising to 15.4% in 2015/16

Other instruments and regulations

Renewable heat obligation?

Wales – Technical Advice Note 8 - Planning policy guidance for renewables

Other incentives - grants

Enhanced Capital Allowance – 100% tax rebate on accredited technology

Capital grants for heat, CHP, electricity from various streams

Capital grants in Wales for wood systems

Fuel Diversity

& Security

Climate ChangeEconomic Growth

Sustainability

Rural Energy Provision

Create higher quality jobsJob retention

Income generationGrowth of SME’s

Rural diversificationHalt rural migration

Overview of current situation - Wales

Biomass heating has established a market presence

Small scale biomass CHP – no examples as yet

Large scale CHP and electricity – none operating but plants in development stage

Pellet stove at West Wales Eco-Centre

Current situation - fuel sources

Fuel being used in Wales: Forestry small roundwood Thinnings – conifer and broadleaf Clean wood waste Pellets

Fuel being used in UK and considered for Wales: Dedicated energy crops Straw

Fuel supply chains

This is a very new market for Welsh forestry

Only a few suppliers in Wales –but this market is expanding

One instance of self supply from under-managed woodlands

Prices approx. £45 to £100 odt depending on contract (60 € to 150 €)

Wood chip store at Llanwyddn. Source:DULAS

Where is biomass heating economic?

What is the impact of scale? How important is heat load? How do costs compare with

fossil fuels (LPG, mains gas and oil)

Generalised capital costs of heat installations

Capital costs greater than fossil fuel systems -by up to ten times

Existing installations are grant aided

BUT costs are expected to come down

£0

£100

£200

150 kW 320 kW 1 MW

Economies of scale - £/kW installed

Running costs: biomass vs.fossil fuel

Low Heat load High

SizeLarge

(1 MW)

Medium(320 kW)

Small(150 kW)

Domestic installation –stoves and boilers All advanced technology -

predominantly imported from Europe In excess of 15 pellet stove

installations heating room spaces UK wide grant scheme of £600 towards

the costs of £2000 Total of 6 log boilers and approx. 10

pellet boilers Capital costs vary from log burners at

£3000 to pellet boilers at about £10000. This compares to an oil boiler of around £2000

Pellet stove at Clynfyw

Biomass heating in public buildings

Government bodies are leading the way in Wales

Primarily County Councils, but also Forestry Commission and the new Welsh Assembly building

Initial installations were running on pellets, with prices tracked to oil prices

As confidence has grown there is a move towards chip installations, again supplied by an ESCO

Llanwddyn School and Village, 520 kW. Source:DULAS

Public buildings overview

In excess of 10 installations, primarily in the south of the country

Generally large scale (>250 kW) but range from 35 kw to 640 kw

Some smaller installations for demonstration proposes- more marginal economically

Total installed capacity of about 2MW

Forestry Commission - Nant-yr-arian – 35kW

Biomass heating and SME’s

Centres where there is a positive benefit in demonstrating to the public e.g:

Clynfyw Countryside Centre Centre for Alternative

TechnologyAre all small scale, less than 100

kW

42 kW pellet boiler at Clynfyw

SME Installations using wood waste

Five installations using wood waste generated on site

Varying from size from 50 to 500 kW.

Generally all the same technology supplier – Talbotts UK Ltd

Simple feed systems – some hand-fed

What makes it work - heatA combination of factors: Off mains gas-grid areas High and consistent heat

load Larger scale installations 50% capital grant helps Stand alone rather than

district heating systemsView inside a biomass boiler. Source:Talbotts

Electricity – small scale CHP

None in Wales Two examples in the UK–

Bedzed in Surrey, England Harper Adams Agricultural

College, Shropshire, England Several about to be installed

in the UK - using a UK Manufacturer (Talbotts) new hot air turbine technology

Small-medium scale CHP –why isn’t happening?

Capital costs per kW installed are high: 1 MW: £1400 100 kW: £2500

High capital costs result in high debt repayments Electrical connection costs are also high Technology not readily available No examples

Successful CHP needs:

Low wood fuel costs Low priced grid connections Off gas areas High heat loads Scale - 1MW more economic

than 100 kW BUT dependant on grid connection and fuel transport costs

Planning regulations favouring renewables

CHP in the future?

Higher and consistent ROC prices Reduced capital costs, particularly

at 100 kW Electrical connection costs reduced More experience and examples at

all scales Go large?

Large scale CHP

None operating in the UK – but several planned for UK and Wales.

South Wales: 10 MWe Western Log 10 MWe Green Renewable Energy

Company 5 MWe Bluestone Holiday park

Image of proposed 10 MWe Green Renewable Energy Power plant. Source: REA

Summary: Where does biomass work in Wales?

A passion for wood energy and willingness to take it on!

CHP/Heat only: High heat loads High heat prices – off mains gasCHP: When competing against other renewables Where fuel is low cost - low transport costs and use of

woody wasteThis is a good fit with the rural sector

Making it happen

Capital grants for installationCapital grants for fuel supply equipment (chippers

etc)Promotion campaignDemonstration projectsTraining and advice

Renewable Heat Obligation – premium for renewable heat

Increase confidence in fuel supply

Biomass – a developing industry for Wales • Heat market is present at all

scales, and increasing fast

• CHP is in development stage –but plants expected to come on line soon

• Environmental benefits of management of existing forests

• Income for rural economies

• Will help to meet climate change targets