By Gord Murray WPAC executive director
Jan. 17, 2018 - Two important developments took place in Europe today in the U.K. and at the European Parliament.
By Gord Murray WPAC executive director
First, the U.K. government’s Renewables Obligation Consultation results were announced, and as a result Drax announced plans to convert a fourth boiler to biomass.
On Sept. 15, the U.K. Department of Energy Business and Industrial Development (BEIS) published a consultation on controlling the cost of biomass conversions and biomass co-firing. BEIS proposed two alternatives: (1) controlling the cost of support for biomass under the Renewable Obligation (RO) scheme through a cap on the amount of renewable obligation certificates (ROCs) which could be earned for ‘non-grandfathered’ units accredited under the RO scheme, and (2) cutting support levels for ‘non-grandfathered’ units.
On Jan. 17, BEIS published a report containing the consultation results. The government has decided to implement an amended version of the generator cap. Rather than imposing a cap on ROC support for any future biomass unit conversions, a cap will be applied at the power station level across all ROC units. This will protect existing converted units and limit the amount of incremental ROCs attributable to additional unit conversions to 125,000 per year.
This has resulted in some fantastic news from Drax. On Jan. 17, the very same day as BEIS released its report, Drax has announced that it will convert a fourth unit to biomass during the second half of 2018, and the company expects the unit to be operational by the end of the year.
Drax’s biomass-fired units 2 and 3 have grandfathered RO subsidies, while its biomass-fired unit 1 operates under the contracts for difference subsidy scheme. Unit 4 is RO accredited but is not grandfathered under the scheme, so the cap will apply. Drax tested biomass at unit 4 for much of last summer.
The unit is likely to operate at lower availability than the three existing 645-MW biomass units, but the intention is to run it at periods of high demand.
Second, the European Parliament voted in on January 17 and delivered its position on the final versions of both the Renewable Energy (REDII) and the Energy Efficiency (EED) Directives. This concludes a first but crucially important stage of the European legislative process. These adopted proposals will now proceed to inter-institutional negotiations (also known as trilogues) before effectively becoming legally binding from 2021 to 2030.
The following is a summary of the main decisions:
- Targets: the target for renewable for 2030 is set at 35 per cent, binding at EU level.
- Biomass resources: Efforts by a coalition of Greens and S&D, aimed at banning roundwood and stumps for energy were rejected (albeit by a relatively narrow margin).
- Non-competition of uses (26.1): The attempt by the ENVI committee to add new criteria related to the waste hierarchy and the non-distortion of market was mitigated. However, the non-competition of uses issue was strengthened in other articles (namely those dealing with support schemes).
- Land-based criteria (26.5): The risk based approach (RBA) was adopted and improved, thus streamlining the compliance process for forest managers. This paves the way for acceptance of SBP certification post 2020.
- Green-House-Gas (GHG) Criteria (26.7): The criteria requiring GHG emission reductions, compared to fossil fuels, are set with the following progressive targets: 70 per cent reduction for installations starting operation after Jan. 1, 2021 and 80 per cent for installations starting operation after Jan. 1, 2026. AEBIOM was advocating for a slightly lower target of 70 per cent, while the council (whose position will have to be aligned to the parliament’s) opted for 70 per cent and 75 per cent respectively.
- Biopower (26.8): Concerning biomass to electricity (i.e. biopower): an energy efficiency requirement of 40 per cent has been set for power-only installations. In addition, these installations are now required to run exclusively on biomass. This would only apply to installations starting operations after three years of the adoption of the directive (presumably in 2021). AEBIOM advocated for compliance to existing legislation, requiring a slightly lower energy efficiency of 38 per cent. AEBIOM will continue working on this point throughout the trilogue.
- Harmonisation (26.10): member states will be able to go beyond the defined sustainability criteria (in this case the parliament voted to return to the text in the original commission proposal).
- Target: The target for energy efficiency is set at a minimum of 35 per cent, binding at national level.
- Article 7. This article establishes the energy efficiency obligation scheme:
- For after 2020, distributors or retailers must achieve energy savings of at least 1.5 per cent
- Savings must be cumulative and additional
- For the period post-2020, the flexibilities for MSs in the accountancy of energy savings have been reduced. Only one flexibility remains: allow energy savings achieved in the energy transformation, distribution and transmission sectors, including efficient district heating and cooling infrastructure to be counted towards the amount of energy savings required under article 7. The transport sector, previously excluded from savings efforts, is now included
- Allowing renewables to count as energy efficiency measure has been deleted
- In conclusion, the article 7 for after 2020 is more stringent than the current one.
- Primary Energy Factor (PEF): A PEF of 2.3 only applicable to EED has been voted, compared to a PEF of 2.0 proposed by the European Commission. This shows the parliament is not willing to favour electric solutions over others, as proposed by the European Commission.
Reaction to the EU Parliament’s votes by Will Gardiner, chief executive of Drax Group:
“Biomass is playing a vital role in decarbonizing our electricity system, providing sustainable, reliable low carbon power for millions of homes and businesses. We are pleased the EU Parliament has recognized the important part biomass plays and we look forward to the next stage of the legislative process and further progress on the introduction of robust, workable sustainability criteria.”
Gordon Murray is the executive director of the Wood Pellet Association of Canada.