APPENDIX 1: DRAFT RENEWABLES OBLIGATION
(AMENDMENT) ORDER 2013
Further information from DECC
Q: How does the Renewables Obligation (Amendment)
Order 2013 extend the lives of some existing coal generating plants?
A: The Government response to the consultation on
proposals for the levels of banded support under the Renewables
Obligation for the period 2013-17 and the Renewables Obligation
Order 2012 set out a number of decisions regarding the full or
partial conversion of coal-fired power stations to generate biomass
renewable electricity supported by the Renewables Obligation.
This included the creation of new bands (see table below) and
adoption of a unit-by-unit approach for the co-firing and conversion
bands.
| Band |
Description
| Support Level (ROC/MWh)
|
| Low-range co-firing of biomass | Less than 50% biomass co-fired in a unit
| 0.5 (reduction to 0.3 in 2013/14 and 2014/15, increasing to 0.5 from 2015/16)
|
| Mid-range co-firing of biomass | 50% - less than 85% biomass co-fired in a unit
| 0.6 |
| High range co-firing of biomass | 85% - less than 100% biomass co-fired in a unit
| 0.7 (increasing to 0.9 from 2014/15)
|
| Biomass conversion | Electricity generated by a unit using 100% biomass
| 1.0 |
The conversion of existing coal generating plant to biomass or
higher levels of biomass co-firing is a way of keeping open some
existing coal plant that would otherwise close before 2016 under
environmental legislation, and therefore improve capacity margins
over this decade. According to Ofgem's Electricity Capacity Assessment
2012, generating margins are expected to tighten significantly
from around 15% this winter to 4% in 2016 due to the closure of
old nuclear plant and coal generators affected by environmental
measures. We estimate that the banding levels proposed for these
technologies could enable capacity equivalent to approximately
3-4% of the capacity margin to remain in operation, which is potentially
significant.
Of the current UK coal capacity, some 8 GW has "opted-out"
of the Large Combustion Plant Directive (LCPD), an air quality
Directive which places limits on emissions of sulphur dioxide
and nitrogen oxides. This opted-out capacity is required to close
by the end of 2015 at the latest, with around 5 GW expected to
close by end of March 2013. The remaining capacity (~20 GW) will
need to comply with the Industrial Emissions Directive (IED),
which replaces the LCPD and sets more stringent emissions limits
from 1 January 2016.
Similar to the LCPD, plant operators have options
available to them which, if equipment is not fitted to meet the
emissions standards set by the IED, essentially limit the remaining
lifetime and or future operation of a plant.
The availability of support under the Renewables
Obligation for coal plant to convert all or part of their combustion
to biomass may therefore provide generators an alternative means
to decarbonise and to reduce emissions in order to meet the requirements
of IED. This will very much depend on the type and age of the
plant, and as such will be an operational decision for individual
generators to make. This option is available to both opted in
and opted out plant under both LCPD and IED. A plant which has
opted out of LCPD can decide to refurbish and re-open as a biomass
conversion, meeting the new emission requirements of IED. Such
an approach would offer a more cost-effective means of supplying
base load generation than new build.
Both the Committee on Climate Change's Bioenergy
Review and DECC's 2012 Bioenergy Strategy concluded that both
conversion and enhanced co-firing with biomass offer a quick,
cost-effective way to decarbonise existing coal-fired power stations,
based on current sustainability requirements.
Q: If those plants are being allowed to continue
to use coal, for how long?
A: Generating stations may continue to use coal but
those wishing to access the low-range, mid-range or high-range
co-firing biomass bands must use biomass alongside coal at the
relevant thresholds specified in the table above. Otherwise they
fall back into a lower band, receiving less support, until they
raise their use of biomass above the relevant threshold again.
The definitions for the co-firing bands, including the relevant
thresholds are set out in article 24 of the instrument, which
amends Part 1 of Schedule 2 to the Renewables Obligation Order
2009.
As indicated in the Explanatory Memorandum accompanying
the draft amendment Order, article 4 of the instrument removes
the existing co-firing cap in order to encourage the increased
use of biomass in place of fossil fuel.
Q: What controls are in place to ensure that those
plants use renewable fuel from a given date?
A: Support is only available under the Renewables
Obligation for electricity generated from renewable sources. Where
a station generates electricity from a mixture of renewable and
fossil fuel sources, such as biomass and coal, the energy content
of each fuel is used to determine the proportion of the output
electricity that can be treated as having been generated from
renewable sources (see article 25 of the Renewables Obligation
Order 2009, which is to be amended by article 7 of the instrument).
Ofgem are responsible for issuing renewables obligation
certificates (ROCs), but before they do so they use their powers
in article 53 of the Renewables Obligation Order 2009 (provision
of information to the Authority) and article 36 of that Order
(general criteria for the issue of ROCs) to obtain the information
necessary to be satisfied that the station is eligible for the
ROCs and has provided accurate and reliable information.
DECC
14 February 2013
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