UK: government to cap RO generation for biomass power stations

The Department for Business, Energy and Industrial strategy has outlined its plans for its renewable energy credit system following public consultation. Following unanticipated levels of participation, the department is limiting the amount of credits that co-firing and biomass plants are eligible to produce.

The decision was made to reduce the possibility of increased rates for energy consumers and government liability stemming from expenses relating to coal to biomass conversions. These conversions are a long-term must for coal plants, after a 5 January BIES policy statement reiterating plans to close all unabated coal-fired plants by 2025.

Two options were given by the consultation gave to control the costs of the programme: 1) cap the amount of renewables obligation certificates (ROCs) biomass can generate, 2) redraw the bands for ROC allocation. According to the government response, there was not a definite favourite among the 22 respondents.

BEIS supported the cap due to its belief that it will give energy producers the most operating flexibility.

The new cap will limit biomass conversions and co-fired plants to 250,000 ROCs annually, up from the initial proposal of 105,000. The cap does not affect what BEIS calls ‘grandfathered’ energy production, a label that guarantees the level of support that relevant facilities acquired when they entered the scheme. The department will allow flexibility for operators responsible for a mix of grandfathered and non-grandfathered units: if a grandfathered unit generates fewer ROCs than forecast, the left over can be taken up by non-grandfathered units.

Applications to the Renewables Obligation (RO) closed in 2017, so no new biomass conversions will be eligible for the extra income that ROC generation provides. The Contract for Difference (CfD) scheme, which was launched in 2015, is another source of support for renewable energy suppliers and remains unaffected by this BEIS ROC revision.

Will Gardiner, Drax Group CEO said: “We welcome the Government’s support for further sustainable biomass generation at Drax, which will allow us to accelerate the removal of coal from the electricity system, replacing it with flexible low carbon renewable electricity.” Drax is currently converting its forth coal-fired power-station to biomass.

Biomass’ position as ‘clean’, ‘renewable’ energy has increasingly been questioned by NGOs and researchers ahead of the EU’s ruling on its 2020-2030 Renewable Energy Directive. The directive will set out targets for renewable energy generation and create policies on the sources of that energy.

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