Dutch may limit biomass co-firing
September 3, 2013, London - Subsidies awarded to biomass co-firing in the Netherlands will be limited to 25PJ — or around 800MW running at full capacity — to reduce energy bills for consumers, if the details of the country's new “energy agreement for sustainable growth” are accepted on 4 September.
By Scott Jamieson
Details of the proposed policy were finalised by a leading group of stakeholders and the Netherlands government on 28 August, and participating organisations will vote on the “10 pillars” of the agreement tomorrow.
In addition to the limit on co-fired biomass, five old coal-fired plants will be closed down — three by 1 January 2016 and a further two by 1 July 2017 — which will reduce potential for full conversion of these units.
The limitation on biomass co-firing is expected to save the government €2.25mn ($2.96mn) on the country's renewable energy incentive scheme SDE plus, which will be used to reduce a surcharge on consumer energy bills, according to social and economic council the SER. But it will have a bearish effect on the biomass market, with the co-firing limit equating to just 1.5mn t of biomass, according to the Port of Rotterdam Authority.
“In our point of view it is unnecessary to put a limit on co-firing when, at the same time, strict sustainability criteria will be applied,” the authority's dry bulk business developer, Hugo du Mez, said. “The proposed limit on biomass means there is enough room for [low levels of] co-firing in the remaining Dutch coal power stations, but conversion of coal power plants does not fit in this picture.”
The SDE plus scheme does not offer any support to co-firing, but gives support to new build biomass, which is not included in the 25PJ cap, according to du Mez. But a summary of the new energy policy does not clarify how SDE plus will support biomass co-firing.
“One of the things to be discussed is how this limited biomass use [in coal-fired plants] will be supported through SDE plus, also in view of sustainability criteria and higher value applications of biomass,” du Mez said.
The government will make available €375mn under SDE plus to reach 14pc renewable generation by 2020 and 16pc renewables by 2023. Any funding not required will be used to reduce energy bills for consumers, the SER said.
The energy policy will incentivise the closure of the five old, inefficient coal-fired plants by reintroducing a tax exemption on operational coal-fired plants from 1 January 2016, which will “give certainty to the newer coal plants that they can continue to operate” and increase profitability, according to du Mez, although it will reduce coal throughputs at the port The removal of the coal tax will only be implemented if the conditions are met, the SER said.
The policy will also implement an incentive for domestic renewable heating, which will equate to a tax reduction of €0.075/kWh of heat produced from renewables. The Netherlands will also seek to scale up offshore wind capacity to 4.45GW by 2023, and onshore wind capacity to 6GW by 2020, and will seek improvements to the EU emissions trading scheme.
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