UK Biomass Project Halted, Developer Blames “erosion of support” for Biomass

UK bio­mass project halt­ed, devel­op­er blames “ero­sion of sup­port” for biomass

– by Nina Chest­ney, March 7, 2014. Source: Reuters

Renew­able ener­gy devel­op­er RES has stopped a 300-mil­lion-pound ($500 mil­lion) project to build a bio­mass plant in Northum­ber­land, north­east Eng­land, due to what it called incon­sis­tent gov­ern­ment subsidies.

The 100-megawatt (MW) plant was sched­uled to be built at the Port of Blyth, cre­at­ing 300 con­struc­tion jobs and 50 oper­a­tional jobs, RES said.

The com­pa­ny received per­mis­sion to build the project from the gov­ern­ment last year.

“It’s bit­ter­ly dis­ap­point­ing for RES that we are unable to bring this excit­ing project for­ward, and deliv­er the sig­nif­i­cant boost it would have rep­re­sent­ed for the Blyth and Northum­ber­land econ­o­my,” RES Chief Oper­at­ing Offi­cer Gor­don Mac­Dougall said in a statement.

“How­ev­er, the grad­ual ero­sion of sup­port for ded­i­cat­ed bio­mass leaves us with no oth­er option,” he added.

The British gov­ern­ment rewards renew­able ener­gy plants, includ­ing bio­mass sta­tions, through a sub­sidy scheme and plans to replace it with a guar­an­teed pow­er price pro­gramme from next year.

The gov­ern­ment intro­duced a 400-MW capac­i­ty cap last year on new bio­mass projects under its main renew­able ener­gy sub­sidy scheme, the Renew­ables Oblig­a­tion mechanism.

“The cap rep­re­sents a rad­i­cal down­siz­ing in gov­ern­ment ambi­tion for the tech­nol­o­gy from a tar­get of 4,000 MW in 2011 to a cap of 400 MW in 2013, long after the indus­try had invest­ed sig­nif­i­cant sums in devel­op­ing projects,” RES said.

Sources of bio­mass include wood, plant-based mate­ri­als or munic­i­pal sol­id waste, which are burnt to pro­duce heat or electricity.

Oth­er util­i­ties, such as Ger­man pow­er com­pa­ny E.ON, have shelved bio­mass invest­ments over the past year due to unfavourable reg­u­la­tion and bio­mass policy.

E.ON scrapped plans to build a 150-MW bio­mass-fuelled pow­er plant last year in south­west England.

Rival util­i­ty RWE also decid­ed to close its con­vert­ed bio­mass pow­er plant at Tilbury, east of Lon­don, due to a fore­cast drop in pow­er prices and a lack of invest­ment from the Ger­many-based par­ent group.