UK proposes reduced support for biomass under RO, seeks comments

By Erin Voegele | September 18, 2017

The U.K. government is seeking public comments on two proposed options aimed at controlling costs of non-grandfathered biomass conversion and co-firing units under the Renewables Obligation.

The U.K. Department for Business, Energy and Industrial Strategy opened the consultation Sept. 15. The two options proposed include a generator cap and a re-banding of support levels. The changes would apply beginning April 1, 2018, subject to the outcome of the consultation and Parliamentary approval.

The BEIS said either options would affect stations and units in England and Wales generating electricity under the biomass conversion or biomass cofiring bands of the RO, unless they are eligible for grandfathering. The proposals, however, do not apply to cofiring of bioliquids or low-range cofiring of relevant energy crops. Under the grandfathering policy, the rate of support a generating station receives at the time of its accreditation remains fixed over the entire period it receives support under the RO.

Within the consultation documents, the BEIS indicates current evidence suggests that technical changes to some combustion units could lead to a significant unforecast deployment of biomass conversion and cofiring under the RO, resulting in additional costs of at least £110 million ($148.35 million) to £195 million per year. The BEIS said its actions aim to protect bill payers from these increased costs.

The implementation of a generator cap would place annual cap on the total number of Renewables Obligation Certificates (ROCs) that can be issued to each biomass conversion or cofiring station in respect of generation of its non-grandfathered units. The BEIS has proposed setting that cap at 105,000 ROCs annually for each station to cover generation from all of its non-grandfathered units.

Alternatively, the re-banding option would adjust the support levels for non-grandfathered units operating under the biomass conversion and cofiring bands. The BEIS is proposing that non-grandfathered biomass conversion and cofiring projects receive the same support of 0.1 ROC per MWh. The change would affect eight bands, including low-range cofiring of biomass, midrange cofiring of biomass, high-range cofiring of biomass, biomass conversion, low-range cofiring with combined-heat-and-power (CHP), mid-range cofiring with CHP, high-range cofiring with CHP, and conversion with CHP.

The current RO bands set support for low-range cofiring of biomass at 0.5 ROC per MWh, with support for mid-range cofiring of biomass set at 0.6 ROC per MWh, support for high-range cofiring of biomass at 0.9 ROC per MWh, support for biomass conversion at 1 ROC per MWh, support for low-range cofiring with CHP at 1 ROC per MWh, support for mid-range cofiring with CHP at 1.1 ROC per MWh, support for high-range cofiring with CHP at 1.4 ROC per MWh, and support for conversion with CHP at 1.5 ROC per MWh. Under the proposal, support for all eight bands would be reduced to 0.1 ROC per MWh.

The consultation closes on Oct. 26. Additional information is available on the BEIS website.