Memorandum submitted by Living Fuels Ltd
LIVING FUELS
LTD AND
LF100
Living Fuels Ltd is a British renewable energy
company based in Norfolk. The company is part of Renewable Energy
Generation (REG), which is a world-leading international renewable
energy group, principally involved with wind power generation
and biopower. The Group develops, owns and operates UK and Canadian
wind farms and also generates UK power from vegetable oils.
Through Living Fuels, the company specialises in
recovering the waste product from used cooking oils (UCO) into
a fuel grade product—LF100. UCOs are an extremely common
waste product as they are produced in food manufacturing by catering
firms and private individuals on a daily basis. Unlike other common
household and catering wastes, UCO must be disposed of in a regulated
way. It cannot simply be poured away as it clogs up drains and
sewers. Previously this was often dumped in landfill sites but
landfill directives have now prevented this.
Living Fuels has developed a unique recovery process,
relying solely on gravity separation and filtration, to purify
UCO into a distinct product. Previously, UCO has traditionally
only been used in transport biofuels, with the addition of chemicals
and catalysts. In contrast, Living Fuels process to turn UCO into
a fuel product is achieved without the need of additional chemicals.
Thus, when LF100 is burnt to generate power, it results in significantly
improved carbon savings.
EXECUTIVE SUMMARY
Energy recovered from used cooking oils (UCOs)
has the potential to become a productive renewable energy industry
and feed into the UK's electricity network. It is also able to
contribute towards the 2020 renewable energy targets. However,
due to the current regulatory environment, the industry is being
hindered from reaching its full potential and contributing towards
the government's policy goals for safe, secure and sustainable
energy supplies and ultimately a low-carbon economy.
Purified UCO which has been recovered into a fuel
product could feed into the electricity grid. However, despite
the clear environmental benefits of recovering waste materials
to generate clean electricity, there is regulatory uncertainty
around whether these products should be classified as fuel products
or continue to be designated as waste. A decision on this is important
as if it continues to be classified as waste, energy projects
using UCO would be subject to excessive financial penalties which
would cripple the industry.
The government must therefore review the regulatory
environment for this industry to determine whether it is appropriate.
In addition, although these fuel products should be dealt with
on a case by case basis, the government should also issue guidance
on utilising used cooking oil for static fuel applications to
assist the Environment Agency in making these decisions. This
principle was also set out in the Court of Appeal July 2007 judgment
in OSS Group Ltd v Environment Agency, where Lord Justice Carnwath
encouraged DEFRA and the Environment Agency to join forces in
producing practical guidance for those affected.
BRITAIN'S
ELECTRICITY NETWORKS
Living Fuels noted with interest that this inquiry
will look at how Britain's networks will need to adapt in response
to future changes in the generation mix, and the role of the government
and Ofgem in facilitating this. As such, we would like to comment
on the government's role in assisting British industry to adapt
to future changes. We would in particular like to comment on the
following aspects of the inquiry:
What should the Government's vision be for Britain's
electricity networks, if it is to meet the EU 2020 renewables
target, and longer-term security of energy supply and climate
change goals?
1. The EU has committed to binding targets that
20% of energy by 2020 will come from renewable sources. In order
to meet this target, for its contribution, the UK will have to
produce 15% of its total energy output from renewable sources
by this date. In real terms this will mean raising the level from
1.8% representing an increase of 13.2%.
2. It is widely recognised that in pursuit of
this target, there is a tendency to rely too heavily on traditional
renewable sources such as wind or solar power. As part of the
REG Group, we recognise and advocate the benefits of wind-power.
However, Living Fuels believes that the focus on these two sources
of renewable has, at times, obscured a proper analysis of the
possibilities offered by other renewable sources to contribute
to these targets and feed into the national electricity grid.
3. Thus, greater emphasis is needed on diversifying
the UK's energy supply as widely as possible and exploiting alternative
renewable sources such as energy from UCO, which although may
be smaller contributors to renewable feedstock, have the potential
to guarantee a contribution with lower up-front costs than wind
turbine or solar energy projects.
4. Energy derived from biomass and waste
products are widely understood as having an immense potential
to assist the UK to meet the EU 2020 renewables target, landfill
reductions and climate change goals. LF100, as a 100% biomass
fuel, derived from waste, is the perfect candidate for supporting
these goals, and effectively makes double carbon savings as well
as being a renewable resource.
5. Utilizing UCO for energy generation also
has additional environmental benefits. Every year, South West
Water reports that the equivalent volume of 21 double-decker buses
of used oils is removed from the region's sewers, costing customers
over £1.5 million annually. This could be used to generate
electricity. Thames Water has also reported that over 1,000 tonnes
of liquid fat is swilled into Thames Water's sewers every year,
much of it from commercial outlets serving hot food. Below ground
it cools, hardens and causes over 50,000 blockages that can lead
to sewage flooding into homes, gardens and watercourses.
6. LF100 has the potential to supply electricity
plants which range from small scale 150KWe installations right
up to Multi-Megawatt Power stations. Typically these plants feed
into the 11KV distribution network close to the point of demand.
LF100 thus has the potential to be used in `distributed generation'
which has been rated as highly desirable by the government and
grid operators.
7. LF100 is a highly flexible fuel; enabling
plant to be highly scalable, highly dispatchable and readily converted
to combined heat and power configurations. This offers major advantages
in local grid stability and can further boost carbon savings.
8. An additional example of this flexibility
is Living Fuels' ability to enable UCO to be recovered into fuel
products on site in major catering and food processing plants.
The fuel can then used to produce heat and power for onsite use,
reducing energy demand and minimising waste being disposed offsite.
9. In order to guarantee meeting the UK's
demanding renewable targets, a fiscal and regulatory environment
which is conducive to supporting innovative renewable energy technologies
should be put in place.
10. This has been done for the conversion
of UCO into biodiesel as the use of UCO in transportation has
been promoted as a viable sustainable energy source. However,
the same has not happened for the conversion of UCO into electricity.
11. Power generation derived from UCO is
not to be confused with biodiesel as the LF100 process generates
power, or electricity, in static generators and produces minimal
waste and consumes very little energy. When considering the pathway
from the raw material to generating power, more useful energy
is captured. As a result, it is a more efficient and less polluting
process.
12. Under the terms of the Waste Incineration
Directive UCOs are classified as waste and not raw materials,
even though they have the potential to be used as such. In 2007
the Environment Agency issued a regulatory position statement
clarifying that UCO remains a waste until it is burnt, meaning
UCO remains to be waste until after it has been used to generate
electricity. As a result, the process must comply with the regulatory
and financial penalties associated with burning waste under the
directive.
13. The cost and time implications of meeting
these requirements are not only in excess of the environmental
impact of burning UCO but also cripple the viability of any projects
to recycle UCO in order to generate clean electricity.
14. This position is supported later in
2007 by a Court of Appeal ruling in the OSS Group vs. Environment
Agency case which stated that lubricating oil which was collected
after use and processed into a fuel product for burning could
cease to be a waste before it was burnt. This was based on a judgement
that a waste material could be reclassified as a non-waste product
provided that it fulfilled two criteria:
(i) It must have been converted into a distinct
product which can be marketed on its own terms.
(ii) It must be used in exactly the same way
and without causing any greater environmental harm than an equivalent
raw material.
15. The Environment Agency is now tasked
with looking at products submitted to them on a case by case basis
in order to determine whether that product has ceased to be waste.
However, despite this legal precedent the Environment Agency has
failed to take the appropriate steps to reinstate this judgment
and help encourage this renewable technology to contribute towards
the 2020 renewable targets.
16. In particular, although the Court of
Appeal judgment encouraged DEFRA and the Environment Agency to
produce practical guidance for UCO to be classified as a raw material
and be used to generate electricity without incurring excessive
financial penalties, a draft protocol on the "end of waste"
cases for UCO has not been forthcoming.
17. In a recent parliamentary answer on
the 2 March 2009 the government did state that DEFRA has made
funding available to enable the Environment Agency to develop
an end-of-waste protocol for waste cooking oil. However, this
protocol only applies to biodiesel for transport use and not for
static energy generation.
18. Without the provision of a draft protocol,
companies are being prevented from developing any renewable energy
projects using UCO due to the prohibitive duties. The consistent
interpretation of the waste directives has severely hampered the
development of a productive industry that could assist and improve
the future of Britain's electricity networks.
RECOMMENDATIONS
In order for the UCO to energy industry to be
able to contribute to the 2020 renewable targets the government
should:
— ensure that the fiscal regime is appropriate
for combined power and heat generation from waste products.
— ensure that guidance is issued which supports
development of the combined power and heat generation from waste
products industry.
March 2009
| 
