Tuesday, 27 August 2013

Biomass sustainability criteria announced by UK Government

DECC has released details of the criteria that will be used to judge Renewables Obligation payments for electricity produced by biomass power stations.

Rather than repeat the press release we have included it below.

This is good news for the biomass industry in the UK.  There has been a lot of negative publicity recently and this new approach appears to set a clear route forward for biomass energy developers.

Of course these new rules are demanding and they will undoubtedly affect  projects >1MW.  However, we welcome these measures which should help ensure the role of biomass electricity in the UK's energy mix (and in meeting the 2020 renewables targets of course).

Press release:

From April 2015 biomass industry must show fuel is sustainable or lose financial support.

Biomass electricity will produce over 70% greenhouse gas savings compared to fossil fuel alternatives, under changes made by the government to ensure the sustainability of wood-fuel used to create energy.

From April 2015, the biomass industry – which is worth over £1bn in new investment and supports over 3,000 jobs – will be required to demonstrate their fuel is sustainable or lose financial support.

Greg Barker, Minister of State for Energy and Climate Change, said:

“The Coalition is committed to delivering clean, affordable and secure energy for consumers.

“This includes an important role for biomass power as part of the UK’s energy mix.

“The new criteria will provide the necessary investor certainty and, crucially, ensure that the biomass is delivered in a transparent and sustainable way.”

The tough new criteria for sustainable forest management are based on a range of issues such as:
  • sustainable harvesting rates,
  • biodiversity protection and
  • land use rights for indigenous populations.

Organisations who do not comply with the new requirements could see financial support withheld.

All generators of 1 Megawatt (MW) capacity or more using solid biomass or biogas feedstock will be required to demonstrate that they are meeting the criteria in order to claim support under the Renewables Obligation. This would cover around 98% of all biomass power generation in the UK.

We are also today introducing a new requirement for generators of 1MW capacity and above to provide an independent sustainability audit with their annual sustainability report.

Today’s announcement will help bring forward transitional biomass technologies such as coal to biomass conversions which are one of the quickest and most cost effective ways to help decarbonise the UK’s electricity supply.

To provide the certainty that investors and developers need there will be no further unilateral changes to the sustainability criteria before April 2027.

Notes for Editors:

  • By 2020 biomass generators of 1MW and above will have to meet a 200 kg CO2eq per MWh annual target (72% saving compared to the EU fossil fuel electricity average). This reduces further to a 180 kg CO2eq per MWh from 2025 (75% saving compared to the EU fossil fuel electricity average).
  • A threshold of 1MW and above covers around 98% of biomass power generation. The other 2% (those with a capacity between 50kW and 1MW) will be required to report against the criteria, but not to comply with it. Microgeneration (under 50kW) are not included in the scope.
  • Biomass is expected to make a significant contribution to delivering the UK’s 2020 renewable energy target. Around 38% of our renewable electricity comes from bioenergy.
  • Sustainable forest management criteria will be based on the Government’s UK Timber Procurement Policy Principles (or CPET - see http://www.cpet.org.uk/).
  • Mandatory sustainability criteria have already been introduced to the RO for bioliquids as required by the EU Renewable Energy Directive (RED).
  • We have introduced a cap of 400MW on the total new-build dedicated biomass capacity (excludes biomass with CHP and coal to biomass conversions) that can expect grandfathered support under the RO. We are using a notification process to allocate places within the cap. This is now open for applications for priority projects (that reached financial close by 20 August). Other projects will be able to apply from 11 September onwards.

Wednesday, 21 August 2013

Renewable Heat Incentive - latest results

The latest quarterly report on the Renewable Heat Incentive (Apr-Jun 2013) indicates that uptake of the scheme remains steady and total installed capacity under the scheme now exceeds 400 MW.

RHI installed capacity and payments - cumulative
There are now 1,789 accredited installations with a further 600 applications  at various stages of processing.  76% of installations are in England, 18% are in Scotland and the remainder are in Wales.

Biomass boilers remain the dominant technology type and comprise 93% of all accredited installations.  
Proportion of accredited installations by technology type

This latest report also provides some new information on recent audits that have been carries out by Ofgem.  These focused on compliance issues but were also carried out for fraud detection purposes.  The main findings were as follows:
  • Rates of non-compliance are high and this has led to payments being suspended in some cases.
  • The main issues relate to participants not maintaining fuel records for biomass installations, particularly where harvesting their own fuel, and the incorrect installation of heat meters
As a result of these findings Ofgem has commenced a desktop audit programme to complement site audits in order to verify ongoing obligations.

The advice is, therefore, to check that metering equipment has been installed correctly, primarily by checking meter installation manuals.  For biomass installations participants need to record the quantity and type of fuel used and the date of supply to the boiler (see template here).

Remember the date - 24th September

DECC recently announced important changes to the RHI non domestic
scheme which will be implemented on 24 September.  These include changes to metering and air quality requirements.

Simplifying metering requirements

If you are applying for RHI accreditation on or after the 24 September simplified metering requirements will apply:
  • In certain circumstances disregard heat loss from external pipework where the pipework is ‘properly insulated’ to the standards outlined in BS5422 and calculated in line with and EN ISO 12241.
  • Submit heat loss calculations in place of installing additional meters in such cases where doing so might be physically or financially overly burdensome
  • Only install meters which are necessary to calculate the ‘eligible heat output’ from the installation to enable the RHI payment to be calculated.
Biomass air quality requirement

Again, from September 24th a fully completed RHI emission certificate (or environmental permit) will be required to demonstrate compliance with new air quality requirements. 

For more information, including RHI emission certificate template, see here.

Thursday, 8 August 2013

Domestic RHI - summary of scheme proposals

DECC has published its response to the consultation on the domestic version of the Renewable Heat Incentive (RHI).  The response includes a lot of detail on the types of technology that will be supported, their 'performance' and the type of properties and tenure that will be eligible.

To assist readers we have produced a summary of the proposals as they stand.  This can be found here.

The proposals for biomass heating are of particular interest to this blog.  The main points of interest include:

  • The tariff for biomass has increased from 8.7 p/kWh (initially proposed in 2012) to 12.2 p/kWh.  Whilst this is slightly below the 13-15 p/kWh we would have liked to see it is clearly an improvement.  The final tariff is yet to be announced but presumably it will be well before the proposed scheme opening date of April 1st 2014.

  • The tariff will be paid over seven years according to deemed heat.  This is the heat load as determined by the EPC that is created during a Green Deal assessment which is a mandatory requirement.

  • Legacy systems installed since 15th July 2009 will also be eligible providing they were installed by an MCS accredited company.  
  • Biomass equipment will need to meet meet air quality standards in relation to particulate matter (PM) and oxides of nitrogen (NOx). Legacy installations, installed between 15th July 2009 and the launch of the scheme, will not need to meet this requirement.
  • A new requirement around fuel sustainability will be introduced for  biomass installations.  To be eligible for and continue to receive RHI support for a biomass system, fuel needs to be sourced from a supplier registered on an approved supplier list. Such a list will be set up ahead of the launch of the scheme and will be the same one that is being established for the non-domestic RHI scheme.
The final point on sustainability is interesting and has important implications for wood fuel suppliers. To be included on the list, DECC intends that fuel suppliers will have to meet two criteria from April 2014:

  • Supply fuel which complies with the greenhouse gas (GHG) lifecycle emissions target of achieving 60% GHG savings against the EU fossil fuel heat average, assuming a boiler efficiency of 70%.
  • Report their performance against the relevant land criteria from the following list (although compliance with the criteria will not initially be required):

Evidence of legality and sustainability can come in two forms:

  • Category A evidence is independent certification of the timber/ timber products by any of the forest certification schemes that meet the policy requirements (such as FSC and PEFC).
  • Category B evidence is alternative documentary evidence that provides assurance that the source is legal and sustainable.
Category A evidence is the 'belt and braces' approach and undoubtedly involves the procurement of external expertise from Forest Stewardship Council and the accredited certification bodies are authorised to issue FSC certificates.

The alternative is Category B evidence and you will be glad to hear that this includes use of the Forestry Commission's Woodland Planning Grant (WPG) that falls under the English Woodland Grant Scheme (EWGS).  

However, the WPG Category B option is open to owners with less than 100 hectares of woodland, and more than 3 hectares, and whose woodlands are not certified.  As such it is envisaged that owners with more than 100 hectares will pursue the Category A, full certification option.

As ever we would recommend a good read of the full DECC document to make sure you pick up all of the salient points.

Thursday, 1 August 2013

Booking now open for the 2013 Surrey Hills Wood Fuel Conference