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Life after the energy crops scheme

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This presentation was given at the UK Energy Now Conference in February 2014.

This presentation was given at the UK Energy Now Conference in February 2014.

Published in: Business

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  • 1. Life after the Energy Crops Scheme David Turley, NNFCC Lead Consultant Biomass Feedstocks Energy Now, Feb 2014, Telford
  • 2. What have we achieved in the UK Renewable Power (GWhe) 16000 14000 12000 10000 8000 6000 4000 2000 0 Renewable Heat (1,000 toe) 1400 other biomass AD co firing 1200 other biomass 1000 800 wood 600 400 plant biomass 2010 2011 2012 Copyright © NNFCC 2012. plant biomass 200 0 2010 2011 2012
  • 3. Energy crop areas supported by planting grants Natural England data on area supported (ha) to November 2011 9496 ha in total 8000 7000 6000 5000 ECS2 2007-2013 4000 ECS1 2000-2006 3000 2000 1000 0 SRC Copyright © NNFCC 2012. Miscanthus
  • 4. Energy crop planting ETI and E4Tech, based on Natural England data Copyright © NNFCC 2012. ECS1 Closure
  • 5. Energy Crop Planting Locations - England ETI and E4Tech, based on Natural England data
  • 6. Factors affecting uptake • Technical/infrastructure • Economic – High establishment cost – Impacts on cash-flow – Competition with arable returns Copyright © NNFCC 2012.
  • 7. Factors affecting uptake – Policy Uncertainty Renewables Obligation (RO) (renewable power support) • Capping of grandfathered (protected) support for new dedicated biomass capacity at 400MW • Loss of energy crop uplift (worth 0.5 RO Certificates /MWh) from 2013 for new plants New Contract For Difference support mechanism • No strike price for dedicated biomass Rural Development Policy • No replacement for Energy Crop Scheme Copyright © NNFCC 2012.
  • 8. UK Biomass feedstock requirement for existing and power plants in planning or development by developer/generator (NNFCC Data) Million tonnes of pellets per annum 18 16 1.57 14 0.51 0.51 12 10 8 6 6.78 1.57 0.51 - 0.00 Drax 4.52 Eon 6.96 Eggborough Power 1.74 1.74 Feedstock demand - 2015 Copyright © NNFCC 2012. Helius Energy RES 0.51 4 2 RWE Lynemouth Feedstock demand - 2020
  • 9. Renewable Heat Incentive • Non Domestic Scheme was launched Nov 2011 by DECC, supporting biomass as an eligible technology (excludes direct air heating) • Domestic RHI Scheme to launch in Spring 2014 , which will also cover biomass-only boilers and biomass pellet stoves with back-boilers – Targeted at off-gas grid applications Copyright © NNFCC 2012.
  • 10. RHI Tariffs Non domestic RHI Plants Commissioned from April 2014 (p/kWh) Tier 1 (up to first 15% of annual rated output) Tier 2 (annual output above Tier 1) Small biomass <199kWth 8.6 2.2 7.2 (typical average) Medium biomass 200kWth to 1MWth 5.0 2.1 4.4 (typical average) Large biomass >1MWth 2 Biomass CHP 4.1 Domestic RHI biomass boilers 12.2
  • 11. RHI – Non Domestic Scheme Applications for Non-domestic RHI (DECC Data) 574MW of installed capacity by Oct 2013 Copyright © NNFCC 2012.
  • 12. Development Potential 4% Total UK heat use by application (70 mtoe) 16% Space heating Water heating 4% 12% Copyright © NNFCC 2012. Cooking/catering Process use 64% Drying/separation
  • 13. UK heating installations by fuel feedstock 20,000 1,500 15,000 1,000 10,000 500 5,000 0 1968 1973 1979 Solid fuel DECC Data Copyright © NNFCC 2012. 1984 Electric storage 1990 1995 Other electric 2001 Oil 2006 Gas 0 2012 Count 000's (gas only) 25,000 2,000 Count, 000's (not incl. gas) 2,500
  • 14. Boiler replacement opportunities NNFCC data, based on conservative replacement rates for conversion to biomass Domestic • 1700-1900 oil fired boilers per year • 500-1000 solid fuelled boilers per year Copyright © NNFCC 2012. Pelletstar Wessex Biomass
  • 15. Supporting policies – direct rural support • The Rural Community Energy Fund (RCEF) (details from WRAP) – launched June 2013, £15 million to support rural communities in England to develop renewable energy projects providing economic and social benefits to the rural community • Stage 1 - provides a grant (up to £20,000 ) to assess feasibility of renewable heat or power projects • Stage 2 - provides an unsecured loan of up to £130K to support planning applications and develop a business case for investment Copyright © NNFCC 2012.
  • 16. Supporting Policies – other rural support • CAP Reform Framework (2014-2020)– Rural development proposals – encourage supply of non-food/feed resources to support the developing bioeconomy – encourage renewable energy investment – support for cooperative developments and demonstrations – BUT - Defra needs to give energy crops the appropriate priority, which is not guaranteed, we await more detail! Copyright © NNFCC 2012.
  • 17. Concluding Comments • There is no specific policy measure that currently recognises the value of domestic biomass • Stop/start nature of direct support has not been helpful • A supportive industry has developed and is poised to exploit the opportunities available • RHI appears to offer a significant opportunity for local energy crop development less reliant on direct support – Own heat supply – Involvement in local heat supply chains Copyright © NNFCC 2012.
  • 18. IEE – Forest Partnerships for Success
  • 19. Celebrating 10 years of Bioeconomy development NNFCC is a UK based consultancy with expertise on the conversion of biomass to bioenergy, biofuels and biobased products. We help industry solve complex business challenges and provide vital evidence for policy makers. | | www.nnfcc.com | enquiries@nnfcc.co.uk