U.K. government seeks responsive biomass policy
By Argus Media
March 4, 2013, London, UK — The U.K. government's biomass priorities will change over time to adapt to technological and market developments, energy minister John Hayes said.
By Argus Media
The government — which is currently encouraging biomass conversions and co-firing at coal-fired plants over dedicated new-built plants to benefit from immediate emission reductions prior to 2020 — views these technologies as “transitional”, according to the Department of Energy and Climate Change (Decc).
“Of course there is a chronology [to the government's stance on biomass],” Hayes said at the Biomass All-Party Parliamentary Group meeting last week. “Our priorities will change as the coal conversions have a limited life span — I cannot say when yet. But we must be sufficiently flexible and responsive to change in the market, cost-effectively and while creating certainty for biomass market participants.”
Decc recently introduced a 400MW non-legislative capacity cap for dedicated new-build biomass plants under the current renewable obligation (RO) subsidy scheme. Once the cap is reached, this could trigger a review into whether any additional capacity will be grandfathered at the current levels of Roc support.
Hayes would not confirm whether this cap would be continued under the government's new contracts for difference (CFD) support scheme, which will replace the RO from 2017, nor whether the cap would be lifted to encourage dedicated plants further down the line.
But he confirmed that the government would support combined heat and power (CHP) and biomass heating plants in the long term, as these technologies were the most efficient.
Biomass is critically important to the UK energy mix, and the government needs a system allowing it to keep open as many doors as possible, Hayes said.
“There is a balance to be struck between price certainty and creating a market-responsive system,” he said. “Initially we need maximum certainty on pricing stability, which will give enough support to allow these [biomass] technologies to develop to a large enough scale where they become commercially viable and cost-effective themselves, and able to stand up against scrutiny.”
The government is currently making decisions on biomass sustainability criteria following consultation with the market, and is also consulting on CFD pricing as part of its proposed electricity market reform (EMR) legislation.
“The outcome of these consultations will allow the government to inform investors where to invest and to deliver certainty to the biomass market,” Hayes said. “The EMR is an important signpost in the government's destination to a market-driven system, responsive to change.”
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