The UK government announces its decision on ROC banding - (Forest Energy Monitor Newsletter, HAWKINS WRIGHT Issued July 25, 2012)
With respect to Biomass, some of the main highlights of the decision by the DECC excerpted from published report by HAWKINS WRIGHT are:
- The new band for coal-fired power stations that convert to 100% biomass has been confirmed at 1 ROC/MWh, in line with the original proposal. However, eligibility will be calculated on a unit by unit basis instead of across the whole plant. This is an important change that is beneficial to generators. It means that if a power station converts its units sequentially, each unit will be eligible for 1 ROC/MWh as soon as it is converted, rather than the generator having to wait for the whole plant to be converted before it becomes eligible for the full ROC.
- Also, up to 10% fossil fuel (coal or other additives) can be used in each unit for ancillary purposes – e.g. flame stabilisation, the avoidance of fouling etc. – without affecting eligibility for the conversion band. Again, this is an important concession for which generators have been lobbying.
- The biomass conversion band will be grandfathered at the rate set for April 2013 and will apply on a unit basis from the date that a unit becomes eligible for a band.
Dedicated biomass power:
- The ROC allocation for dedicated biomass will be as originally proposed: 1.5 ROCs/MWh from April 2013 (the same as it is now), dropping to 1.4 ROCs from April 2016. This support will be grandfathered.
- Dedicated biopower plants that use energy crops will receive 2 ROCs/MWh from April 2013, dropping to 1.9 ROCs and 1.8 ROCs/MWh for new accreditations and additional capacity added in 2015/16 and 2016/17 respectively. This energy crop uplift will also be grandfathered.
- DECC is clearly concerned about a risk that too much dedicated electricity-only biopower capacity could be built, contrary to the government’s bioenergy strategy which sees a limited long-term roll for electricity-only dedicated plants. DECC says that it does not want to stop "shovel-ready" dedicated plants from going forward – those which can reach financial close this year – but it proposes to consult on a "supplier cap" to limit the number of new electricity-only plants, those built after April 2013. It suggests a figure equivalent to 800-1000MW of new dedicated plant, which translates into about four or five new projects. Dedicated biomass CHP plants would be exempt from the cap.
- Sustainability criteria are going to be a hot topic for discussion over the next few months, and probably beyond. DECC will shortly launch a consultation on new proposals, but today’s announcement has provided a snapshot of what it has in mind.
- The present supply chain emissions standard that applies to all existing converted, co-firing, and dedicated biopower plants in the UK is 285.12 kgCO2/MWh of electricity generated. This is equivalent to 60% of the emissions of an average fossil fuel generator in the EU and roughly equal to the emissions of a CCGT gas plant.
- DECC proposes that this biomass supply chain emission standard should be subject to limited grandfathering from 2013 through to April 2020 "subject to any changes which need to be introduced at any time to comply with EU or international obligations".
- The consultation will consider the setting of tighter sustainability criteria for the period 2020 to 2025.
- There is one exception. DECC proposes to put new dedicated biopower plants – with or without CHP – which are accredited from April 2013, on an accelerated emission reduction trajectory of 240 kgCO2/MWh from 2013-2020. DECC says that it is aware that the best ‘shovel-ready’ projects can meet this standard.
For the Forest Energy Monitor newsletter issued by HAWKINS WRIGHT, please click on the image below:
|Now, considering the special report from HAWKINS
WRIGHT, what is the near future impact on the market?
As the final decision by the DECC materializes, the forecast is for a very positive and promising immediate future. It means that the industrial end-users are now in a position to return to the negotiating table and offer secure long term contracts and off-take agreements.
What is our role and how are we different?
In summary, as senior executive level key players in both the European and North American Wood Pellet markets; we have been extremely successful in representing the North American producers in this overseas market and securing them attractive long term contracts and financial support through off-take agreements.
Over the coming months we anticipate an increasing demand from our industrial end-users.
We will continue in our role in providing the qualified North American producers with pragmatic solutions, financial support (off-take agreements) and the offer of guaranteed flexible long term contracts.
On behalf of bio wood pellet, Canada, and its European business affiliates,
Rahmat Ushaksaraei, AInstIB, P.Eng., PMP
bio wood pellet
GeBTL, Global executive Business & Trade Links
accrete, The Business Excellence Realization
Founder & President
|about us | our role | news | wood pellet | reach us|
|© Bio Wood Pellet, an accrete company. biowoodpellet.ca. all rights reserved.|
|your privacy is our main objective. should you wish not to receive further information, please reply with a blank e-mail.|