UK releases long-awaited renewables support proposals
The U.K. Department of Energy and Climate Change released its proposal for Renewables Obligation banding levels from 2013 to 2017 on Oct. 20, leaving a few biomass technologies at current levels, but proposing to add more, such as enhanced cofiring and biomass conversion.
Before the proposal, the biomass industry was unsure what level of support it would get past March 2013 when the current levels expire. The uncertainty made investments, and therefore development progress, difficult to achieve. A number of projects and developers have been anxiously awaiting the release of the proposals.
The Renewables Obligation awards Renewables Obligation Certificates to qualifying technologies. The levels of support are banded by technology type and include multiple biomass-related technologies, as well as wind, geothermal, solar and hydro.
The DECC proposed to leave dedicated biomass support at the current 1.5 ROCs per megawatt hour (MWh) through March 2016, reducing it to 1.4 ROCs per MWh beginning April 2016. Support for cofiring of biomass in the proposal remains at the current 0.5 ROCs per MWh, and cofiring of biomass with combined heat and power is also to remain at 1 ROC. Support levels for the new additions, enhanced cofiring of biomass and biomass conversion, are both proposed at 1 ROC per MWh. Enhanced cofiring is when complete biomass conversion is planned, but isn’t cost effective to do all at once, according to the proposal. “However, by 2020 we anticipate that the majority of enhanced cofirers will have fully converted their stations,” it stated.
Under the proposal, advanced gasification, advanced pyrolysis and anaerobic digestion will all remain at 2 ROCs until 2015, when support will be reduced to 1.9, and again to 1.8 in 2016. The DECC also proposes changes to the definitions of advanced gasification and advanced pyrolysis, as well as a merging of the two.
“After a long wait the biomass industry finally has the combination of clarity over the future ROC band for dedicated biomass, along with agreed 20-year grandfathering of ROCS, and confirmation of robust rules governing biomass sustainability standards,” said Chris Moore, director of MGT Power, which is currently developing projects in England. “As a result MGT’s fully permitted flagship biomass project at Teesside, North East England will now move into its final stage of development and financing.”
The 295 MW Teesside Renewable Energy Plant will be a dedicated biomass power station, running on wood chips, and is fully consented. MGT has argued for many years that large-scale biomass power stations, designed for low capital cost and high thermal efficiency, represent one of the most cost-effective forms of renewable energy, Moore added.
“Armed with today’s good news, we are now mobilizing our final phase of financing negotiations with lenders and investors to achieve full financial close and start of construction within less than six months,” Moore said. “It is therefore imperative that the government maintains its planned confirmation of the ROC bands as soon as possible following the end of consultation on Jan. 12, in order for this industry to continue to contribute to the U.K. economic recovery.”
The consultation period on the proposal is open through Jan. 12. The entire document and more information on support levels, as well as response forms, can be found here.