RCEP calls for renewable heat 'obligation'

Government policies on deriving energy from biomass are "fractured and misdirected", according to a new report by the Royal Commission on Environmental Pollution.1 Its main recommendation - a new renewable heat obligation - is also supported by an unpublished report for the Government.

The RCEP's latest report builds on its highly influential report on energy use and climate change, issued in 2000 (ENDS Report 305, pp 19-22 ). This said that the UK needs to cut carbon dioxide emissions by 60% by 2050 - a radical message later adopted by the Government in its energy White Paper (ENDS Report 338, pp 26-32 ).

The 2000 report envisaged a dramatic increase in renewable energy sources. In particular, it recommended that by 2050 up to 16GW of the UK's energy - about 12% - should come from biomass. Since 2000, however, the biomass industry has been on its knees - with only seven plants generating electricity.

Launching the RCEP's follow-up report in May, Commission chairman Sir Tom Blundell said: "Biomass energy could make a vital contribution to the UK's targets for combating climate change, but is failing to develop under fractured and misdirected Government policies."

Sir Tom warned that the UK is ten years behind other northern European countries. He also said that current policies have "failed to integrate the supply chain and support viable technologies."

Since the disastrous failure of the Arbre gasification plant, the Government has been widely criticised for concentrating on unproven technology rather than building up the biomass industry with more conventional plant (ENDS Report 331, p 12 ). In March, the Government indicated that it too is coming round to this view (ENDS Report 350, pp 31-33 ).

The Commission concurs - saying that "climate change policy, not speculative export possibilities, should be the primary driver for developing the biomass sector in the UK."

But it takes the argument further by advocating a radical shift away from electricity generation towards heat production - which has been largely overlooked by Government support mechanisms. The RCEP notes that electricity generated from biomass can attract a price of 6.5-7p/kWh - including renewables obligation certificates - but biomass heat fetches only 1-1.5p/kWh.

The Commission's central recommendation to address this is for a renewable heat obligation to support both dedicated heat applications and combined heat and power (CHP). Modelled on the renewables obligation, the proposed mechanism could oblige gas, oil and electricity suppliers to supply a given percentage of their heat from renewable sources like biomass or solar thermal - perhaps 2% by 2010 and 5% by 2020, the RCEP suggests.

An unpublished report for the Environment Department (DEFRA), seen by ENDS, suggests that the Government may also be warming to the idea. In a review of possible support mechanisms for biomass heat, consultants Ilex report found "significant potential" and called for a "major support programme" to support the sector. Ilex's preferred mechanism would be "some form of obligation mechanism with tradable certificates similar to the renewables obligation".

The Commission also calls for an overhaul of the biomass capital grants scheme to focus support on a large-scale expansion of heat applications and power generation using CHP. Remarkably, it argues that stations generating electricity alone - the focus of current Government policy - should be excluded because of their low efficiency.

The report also calls for biomass-fired CHP to be used in all new-build developments, for existing community heating schemes to use biomass wherever possible, and for the creation of a dedicated Government/industry biomass forum.

The Commission also fleshes out the implications of its proposed 16GW biomass target. This would require about 200-500 large plants of around 30MW, together with some 1,600-8,000 small installations of around 1MW.

Initially, straw and forestry wood sources could dominate the fuel mix - but they have a limited potential for growth. Energy crops could become the biggest source before 2020, and could contribute about 85% of all biomass fuel by 2050. A linear growth in energy crops would require one million hectares of energy crops in 2020, rising to 5.5 million hectares in 2050 - almost a third of the UK's 17 million hectares of agricultural land.

The RCEP advocates a staged approach to expanding energy crops, with a reassessment of the contribution of different fuel sources, rigorous impact monitoring and strategic environmental assessments at each stage.

To improve farmers' confidence in planting energy crops, it wants the Government to underpin the market by offering payments until the end of the crop's 15-20 year lifespan if the local market for wood should collapse.

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