Memorandum by Drax Power Limited
INTRODUCTION
1. Drax has an ambition to further develop
its co-firing technology and build a long term presence in the
renewable energy market. Current aspirations are to generate 10%
of the station's output from renewable biomass materials, principally
from a wide variety of energy crops, by the end of 2009. We have
committed up to £80 million in extending our biomass capability,
including handling and processing of biomass materials. Hence
we are keen to contribute to the evidence used by the Sub-Committee
and have prepared the following as a summary of our progress in
developing biomass co-firing and as a means of indicating the
barriers which need to be removed before this renewable energy
can fully achieve its potential in the UK. We have contributed
to several Government consultations on biomass and renewable policy
over the last few years and this document summarises the key policy
issues rather than detailing specific areas and recommendations.
CO -FIRING:
AN EFFICIENT
CARBON ABATEMENT
TECHNOLOGY
2. The recent Energy Review signalled some
major shifts in the Government's thinking on the future role of
coal-fired electricity generation. The most important of these
was the recognition that coal-fired generation is likely to play
a significant part in the UK energy mix going forward. As a result,
Government policy will need to ensure that the environmental impact
of this form of generation is effectively managed and needs to
address co-firing since this is the most efficient way of reducing
CO2 emissions from coal-fired power stations.
3. The forthcoming Renewable Energy Strategy
provides the Government with an opportunity to clearly expound
the view that biomass co-firing should be encouraged to play a
greater role in reducing CO2 emissions from coal-fired
power stations. Such a role should not be confined to the existing
coal-fired plant since Drax firmly believes that any new coal-fired
plant, which will eventually be fitted with Carbon Capture and
Storage (CCS) technology, should maintain a co-firing capacity.
The Environment Agency, through its definition of Best Available
Technology (BAT), should require all new coal plant to be built
with a biomass co-firing capacity of up to 20%. It should be noted
in this context that the DTI-commissioned study (Themba Technology,
2006) investigating the carbon balance and sustainability issues
surrounding co-firing concluded that "from an avoided greenhouse
gas perspective, the co-firing of biomass with coal represents
one of the most effective uses of biomass resources for energy".
TARGETS AND
CHALLENGES
4. The EU's target for renewable energy
will be challenging and the Government needs to integrate and
clarify the energy and environmental policy frameworks. It can
be calculated that the UK co-firing resource is of the same magnitude
as wind and we believe that it deserves a similar level of Government
recognition and support as a fundamental part of both the renewable
energy and carbon abatement strategies. However, if this renewable
energy resource is to play a significant role in contributing
to the EU's challenging targets, there is much that needs to be
done, particularly by ensuring much better co-ordination between
Government Departments in order to develop consistency and to
fully utilise the infrastructures and potential capabilities of
the UK biomass industry.
5. We welcome the fact that the Government
has recognised the imperatives in this area as indicated in the
recent Biomass Strategy:
— Biomass will have a central role
to play in meeting the EU target of 20% renewable energy by 2020.
— We need to explore every avenue for
achieving these cuts in emissions in sustainable ways over the
decades ahead.
— Delivery of our objectives will require
a major expansion of biomass use for fuel, energy and industrial
products.
6. However, our extensive efforts over the
last few years in trying to build a biomass programme result in
the clear conclusion that policy implementation does not yet match
these aspirations and hence the prospects for meeting the challenging
EU targets do not look good without a greater policy emphasis
on biomass production and usage.
7. DEFRA and BERR need to develop a more
consistent, integrated policy which builds the UK capability for
biomass production and usage in a sustainable manner. The current
Government policy of dividing biomass into energy crop and non-energy
crop was well intentioned but has demonstrably not been particularly
successful—the UK energy crop industry is still embryonic
after several years of effort and the co-firing throughput of
non-energy crops has been severely reduced through volume caps
and changes in Renewables Obligation (RO) support levels. Indeed,
we find it highly disappointing that the overall UK CO2
reduction from biomass co-firing has fallen over the last few
years despite the high public profile afforded to the climate
change issue and despite the fact that it is clearly the most
economic way of reducing CO2 emissions from power generation.
8. The UK Government needs to reverse its
view is that biomass usage "is constrained by the availability
of biomass products". This is far too pessimistic a view
and we believe that more options to encourage the sustainable
production of energy crop and non-energy crop biomass co-firing
need to be considered to obtain the maximum national CO2
reduction.
THE WAY
FORWARD
9. Our view is that building a more robust
and wider UK energy crop industry is a key way forward because
these fuels contribute towards the development of a viable UK
biomass industry and allow security of long term volume. In particular,
it must be recognised that current programmes and current market
conditions are inadequate to deliver the 300,000-350,000ha energy
crop objective set out in the Biomass Strategy. In addition, the
Energy Crop Scheme has been beset with difficulties which have
prevented significant planting and this has severely tested both
farmers' patience and their long term confidence in the stability
of the Scheme into the future.
10. Given this, we expect it to prove difficult
to encourage farmers to plant significant volumes of energy crop
in the current economic climate with, for example, wheat commanding
a high price. Only by widening the definition of energy crop,
developing the UK forestry resource and providing consistent,
long-term support can we develop a sustainable UK energy crop
and biomass industry.
11. Drax is hopeful that we can source much
of our biomass fuel from the UK since this should be the most
competitive and also the lowest "carbon footprint" source.
However, we need Government to develop programmes to help the
UK biomass industry develop sufficiently to meet as much of the
potential volume requirement as possible.
21 April 2008
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