Business Green: Ministers urged to back biomass with subsidy certainty24/08/2011
The government has today been urged to give swift and stable support to the UK's emerging biomass industry, ahead of an upcoming review of renewable energy subsidies.
The Back Biomass campaign, spearheaded by the Renewable Energy Association (REA), and supported by British Sugar, Drax. E.ON, Future Biogas, Estover Energy and RES Group, was launched yesterday.
It is designed to raise the profile of biomass as a "proven, practical, secure source of low-carbon energy", which REA claims has been overlooked at times by ministers keen to focus on other forms of renewable energy.
Speaking to BusinessGreen, REA head of policy Paul Thompson said the campaign wanted to ensure that a new subsidy reflected the positive vision that government indicated for biomass in the recently published Renewables Roadmap.
That document said biomass could deliver 6GW of capacity by 2020 and named it as one of eight technologies that could make the biggest contribution to the UK's 2020 renewable energy targets and beyond.
The government is expected to publish a consultation in the coming weeks on the existing Renewables Obligation (RO) subsidy scheme and plans to replace it with a new form of feed-in tariffs known as contracts for difference.
The Back Biomass campaign is now urging government to ensure any decisions based on the consultation are made by the end of the year.
Thompson said any delay could dent investor confidence and impact the biomass project pipeline for the next four to five years.
"We do not know how the system that's replacing the RO will work," he said. "No one can finance a project without knowing what support is in place. We need an announcement... and we need it to be clear cut so people can find no excuse to delay projects."
The launch of the campaign also follows comments from senior executives at Drax, the operator of the UK's largest coal-fired power plant, suggesting the company could significantly increase its use of biomass power if the government provides sufficient support for the technology.
While the REA has stopped short of calling for any specific new support levels under either the RO or the new subsidy scheme, Thompson raised concerns that the current "uplift" given to combined heat and power plants (CHP) under the parallel Renewable Heat Incentive (RHI) scheme reduced certainty for biomass investors.
He argued that as the RHI will be administered from a pot of money that is limited on a yearly basis, CHP developers would be concerned that the government could halt subsidies if funds are running low and if too many large projects are brought online in any given year.
The biomass campaign also aims to raise awareness of the sustainability criteria for biomass to increase public backing for the technology.
New government sustainability criteria will require generators to demonstrate at least a 60 per cent reduction in greenhouse gases in order to be eligible for financial support.
Gaynor Hartnell, chief executive of the REA, said it is "highly significant" that the government has recently increased its ambition for power generation from biomass.
"There are a number of large projects in development that would produce cost-effective renewable electricity and can deliver steady baseload power," she said.
"Provided support levels are maintained in the forthcoming banding review, government can look forward to these plants, making their contribution towards meeting the UK's targets."
The campaign has already been backed by energy minister Charles Hendry, who said he wants biomass to play a central role in a balanced UK energy mix.
"Biomass electricity is both predictable and controllable, and I am very interested in the potential for co-firing and conversion," he said.
"The UK industry has been at the forefront in ensuring biomass electricity is sustainable and that it delivers real greenhouse gas savings. The clear sustainability criteria we now have in place will mean we know where biomass has come from and how it has been grown."