U.K.'s DECC RO banding gives pellets advantage over coal

Under the U.K.’s new Renewable Obligations program released in October, pellets are set to gain an advantage over coal of more than £10 ($15) per gigajoule.

The new RO proposal dictates levels of support for renewable energy in the U.K. from 2013 to 2017. The biomass and other industries had been anxiously awaiting the release, concerned investments in projects were slowing due to uncertainty in support levels past 2012.

With the new support levels, wood pellets would generate a £10.3 per gigajoule advantage over coal, representing a 48 percent cost savings, according to an analysis of the new levels conducted by River Basin Energy. The company is working to produce 6 million metric tons of torrefied biomass over the next decade. According to its analysis, torrefied wood will bring even more savings and an £18 per gigajoule advantage over coal, realized immediately because it would not require investments or retrofits at power stations.

Under its October proposal, the DECC would 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 in 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 two new technology 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,” the proposal stated.  

Advanced gasification, advanced pyrolysis and anaerobic digestion would 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.

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.