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Voluntary cost control aims to boost biomass conversion

Renewable energy producers say the government’s plans to drop proposals for a compulsory cost control mechanism in favour of a voluntary reporting process will help boost biomass energy.

Announcing the plans, the Department for Energy  and Climate Change (DECC) said the decision would cut red tape, and give more clarity and certainty to developers wanting to convert operations to biomass technology and investors.

The Renewable Energy Association (REA) welcomed the decision to drop plans to subject co-firing to a compulsory cost control mechanism.

Chief executive Gaynor Hartnell said: “Being a cheap source of renewable electricity, it made no sense to limit how much came forward. We welcome this pragmatic decision and are keen to work with the new energy minister on further areas where the REA believes there is scope to bring cost effectiveness and reduce complexity within the Renewables Obligation [RO].”

Eggborough Power Station, a 2000MW coal-fired plant in Goole, East Yorkshire, is planning to convert its operation to biomass power.

Chief Executive Neil O’Hara said: “The announcement by DECC removes one of the major barriers for biomass conversion projects like ours, which is now one step closer to making a significant contribution to energy security, growth and jobs, and renewable power”.

“With plant infrastructure already in place and ready to be converted, these projects offer a realistic and timely contribution to the capacity crunch looming for the UK in 2015.”

A spokesperson for Drax Group, which operates the UK’s largest coal-fired power station, said: “It confirms our understanding of the future regulatory framework for existing coal-fired power stations, such as Drax, that wish to convert fully to burning sustainable biomass in place of coal.”

In July DECC launched a consultation on a mandatory requirement to pre-register units for enhanced co-firing and biomass conversion, to provide more predictability over how much generation would occur.

DECC has now said that operators of co-firing stations and biomass conversions will be asked to pre-notify the department of their generating intentions in advance of each RO period, on a voluntary basis.

DECC use this information to set budgets and renewables obligations each year.

A fact-sheet issued by the department says: “As a voluntary process, there will be no explicit link to triggered reviews of support under the RO over and above Government’s pre-existing review powers. Nor do we propose to link our grandfathering policy to meeting the request for pre-notification.”

The fact sheet also gives full details of new ‘grandfathering’ arrangements to provide assurance of the levels of subsidy that converted plants will receive over their life-times. DECC is inviting comments on the note by 30 November.

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