Malcolm raises concerns about the biomass plant proposed in Leith
Response to consultation on renewable energy highlighting proposed Leith Biomass Plant Neal D Rafferty
Renewables Routemap Team
4th Floor
5 Atlantic Quay
150 Broomielaw
G2 8LU

Dear Mr Rafferty,

Consultation on the review of ROC bands applying under the Renewables Obligation (Scotland) mechanism.

Please find my response concerning the biomass element of the recent consultation on ROC banding below

What are your views on the proposal to remove support for large scale dedicated biomass electricity plants?
The removal of government subsidies that support the development of large scale biomass plants, particularly where the heat bi-product is not utilised, is a step in the right direction and I support the proposal. However, I believe that factors like whether or not a plant uses fuel stock from a local, sustainable source should also affect the levels of support available. For this reason I would suggest that the ROC banding of large scale CHP (combined heat and power) developments should also be reconsidered, as carbon released in the process of transportation, the lack of long-term security of crops and the negative impact of high demand on global markets brings both the sustainability and the carbon neutrality of the energy source into question.

With regard to the development currently being considered for the Leith Docks I would reiterate that biomass must only be considered to be an efficient method of carbon reduction where the supply is local and the heat bi-product is distributed to maximum effect; at present Forth Energy have not made clear the infrastructure that they intend to put in place to make this requirement a reality. In this area further clarity is certainly required; nevertheless, any plan that shows a guaranteed use for the heat produced should not sway decisions on whether governmental support should be given in circumstances where there is an uncertainty as to the sustainability of fuel stocks, and therefore the reliability of the energy source. Good quality CHP provision should be a standard requirement from the very first day of plant operation and any doubt as to a plant’s capacity to function continuously and effectively should be a decisive factor on whether or not precious government subsidies should be placed with biomass and not a more reliable, clean alternative energy source.

The question of efficiency should be a key factor, along with overall sustainability and global market impact, on whether the ROC banding for CHP plants should be removed or altered. The current guidelines on Good Quality CHP provided by the Department of Energy and Climate Change* show that it is possible for CHP plants to qualify for support when they operate a low standard of efficiency (Use of CHPQA to obtain Renewable Obligation Certificates (ROCs) Including Under a Banded Obligation.) In the case of the proposals in Leith, Forth Energy must firstly secure heat users in order to run at the required efficiency rating of 35 – 40% within the first 5 – 7 years of becoming operational in order to meet these minimum standards (Section 36 Application for the proposed Biomass Power Plant at the Port of Leith, SEPA response, paragraph 6.5) I believe that this loophole regarding minimum efficiency ratings should be addressed immediately through a removal of ROCs for any project that does not meet the minimum efficiency rating of 70% set by European Union directive, to ensure that both heat and energy are delivered to customers and offer the best value for money with regard to subsidies. SEPA’s submission to the recent consultation for the Leith biomass plant highlighted that:

“The Combined Heat and Power Feasibility Study shows that it will be capable of achieving a QI value of 103 (assuming no heat use) on commencement of operations. Forth Energy intends to complete phase 1 of the heat network in 2015, however, this is dependent on securing heat users. If this is achieved it is estimated that the overall energy efficiency can increase to 34.5% in the first year of operation with a QI value of 110. This will constitute good quality combined heat and power (as defined by DECC). However, the majority of this efficiency will come from power efficiency of 32.8% with heat efficiency only accounting for 1.7%. If sufficient heat users are secured the overall energy efficiency of the plant has the potential to increase to 42.2% as the phases of the heat plan are implemented, with heat efficiency accounting for 10.1% with QI rising to 113.”

When one considers the levels of subsidies being provided (an estimated £116,880,000pa of ROC subsidy over twenty years under the current arrangements with regard to electricity-only in the case of Leith) one must question the viability of such investment; that a low-efficiency large-scale CHP plant, that may only start to provide good quality CHP after 5 – 7 years, may qualify for ROCs leads me to believe that the proposals tabled in the recent consultation on banding should be taken further so that the investments we do make in progressing towards the Scottish Government carbon reduction targets are instant, reliable, and efficient from day one of operation. Removing ROCs for large scale dedicated biomass electricity plants is a step in the right direction; ensuring efficiency by setting a standard of 70% for industrial CHP and looking to support locally-sourced developments should be the next.

Should a threshold be set to incentivise smaller scale electricity plants, and at what level?
To set a threshold that incentivises plants of any size that do not utilise both the heat and the electricity produced through combustion would be counter-productive. ROCs should be granted only where the development being proposed runs to the highest standards of efficiency. Small scale plants are favourable when they are placed near a sustainable local source of fuel and off gas-grid so that heat is distributed to the immediate community of customers at the same time as the electricity, producing the maximum carbon saving.

Should UK proposals on enhanced co-firing and conversion be mirrored in Scotland, and why?

Giving subsidies to enhanced co-firing and conversion developments would not necessarily contribute to carbon reduction targets as the structure replacing the more traditional coal fuelled plant will be large scale and only produce electricity. A number of studies examining the potential for biomass to deliver carbon reductions worthy of subsidies, for example ‘The Power of Scotland Secured’ by Garrad Hassan, have highlighted that the time taken to mitigate the carbon released in fuel transport and combustion of certain types of biomass through replanting at the source may take hundreds of years. For this reason such a change in policy would not help as we strive to reduce our carbon emissions within the deadline set by the Scottish Government. In short, the UK proposals should not be followed, as alternative clean energy sources should be prioritised over large-scale electricity-only developments. Further to this, it still stands that a large scale plant would need to be internationally sourced, leading to additional uncertainties about sustainability and supply.

What are your views on whether a maximum threshold for biomass CHP plants is required?
A maximum threshold that would act as disincentive for the development of all types of large-scale plants would be a favourable development in Scottish Government energy policy, for all of the reasons set out in the many submissions received by the planning and consent unit last year. Primarily, I do not believe that large plants, be they electricity-only or CHP operating to minimal QI value, have a role to play in reducing carbon output within the vital time frame. Furthermore, I do not believe that biomass plants with a high threshold can be seen as a reliable source of energy when the fuel that they require comes from an international and potentially fluctuating market. The World Trade Organisation in their 2011 report ‘Price Volatility in Food and Agricultural Markets’ highlighted that any trend towards supporting the development of large scale biomass may put at risk the global supply of woody materials, and also have an adverse effect on land use where demand for crops increases.

Policy should therefore reflect these considerations, and I welcome recent suggestions by the 2011 Forestry Commission report that a 10MWH cap on the potential threshold of future developments should be introduced. However, it must also be considered that, even with a threshold in place, the plant should be situated in a manner that makes best use of the existing infrastructure in order to deliver the type of day-one-efficiency required. As the government has highlighted, those plants located in areas that have access to the existing gas grid are more likely to be able to operate more effectively.

Do you believe there is a need to revisit the biomass content threshold of 90%?
I do not believe this is necessary.

January 2012