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Outlook improving for UK bioenergy
focus:Market Policy • Legislation • Market analysis
Outlook improving for UK bioenergy
E
XPERTS FROM Aston University’s European Bioenergy Research Institute (EBRI) recently shared their views of the UK’s nascent bioenergy sector with Renewable Energy Focus magazine.
The experts from EBRI included: Professor Tony Bridgwater, director; Dr Jim Scott, research associate; Dr Dan Wright, research associate; and Tom Anderson, business development manager. Following are excerpts of their comments:
Q: What is the biggest development for bioenergy in the UK in 2014? Tom Anderson: The last year has seen a significant increase in the profile of gasification and particularly gasification of refuse-derived fuels. Whereas in previous years EBRI has predominantly fielded enquiries from industry regarding more established bioenergy processes, such as anaerobic digestion (AD) and combustion, the last 12 months have seen a marked
increase in industry interest in gasification. This has ranged from larger companies seeking technical support for proposed, larger-scale installations at Tyseley, through to SMEs looking for R&D funding to develop innovative small-scale gasifier technology. Developments that have enabled gasifier technology to process wastes and residues (as opposed to expensive virgin materials) have been the key drivers for this upsurge in interest in gasification, largely due to changing attitudes amongst local authorities who are seeking to move away from waste incineration and towards more advanced applications. Dr Jim Scott: 2014 was supposed to be a year of calm for the large-scale biomass to electricity sector, falling between the market uncertainty
introduced by consultations on renewables obligation certificates, grandfathering and the exact wording of the electricity market reform (2009-13), and in advance of the 2017 introduction of contracts for difference. The large scale power from the biomass sector appears to have settled on cofiring conversions as the best avenue for new capacity rather than dedicated new build biomass combustion plant. The successful — if short lived — trial at RWE’s Tilbury plant and ongoing commitment of E.On, RWE, Drax and their supply chain partners has shown that conversion from coal to biomass is the most feasible exit route for coal stations falling foul of pollution limits in the large combustion plant directive. Whilst uncertainty in policy may have relatively settled down, market uncertainties and realities are now causing some conversion investments to pause for thought. At least four proposed coal-to-biomass conversions have been announced by UK generators, and if all go ahead these alone will create a demand of around 17-20 million tonnes of wood pellets each year.1 Dr Dan Wright: One of the most significant developments in bioenergy in 2014, although technically announced in late 2013, is recognition that greater support is required to incentivise biomass combined heat and power (CHP) systems under the renewable heat incentive. The introduction of a specific band for solid biomass CHP and an expansion in the coverage for larger AD systems (>250kWth) will greatly support the UK to catch up with the rest of Europe in renewable heat production.
Q: What does 2015 hold for bioenergy in the UK?
This past December the European Bioenergy Research Institute (EBRI) at Aston University hosted its first ever master class for West Midlands businesses to find out how they can make power (and money) from turning their waste sources into cost-effective energy.
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JANUARY/FEBRUARY 2015 | Renewable Energy Focus
Dr Wright: 2015 will be full of the unknown, because of market reform. The start of the Contracts for Difference (CfD) scheme and the transition from the renewables obligation system, will, at best, be a learning experience and, at worst, could lead to a market hiatus for developers and other key stakeholders. There is also general consensus that the shake-up will be disproportionally impact SMEs and independents.
About: Aston University’s Professor Tony Bridgwater, director; Dr Jim Scott, research associate; Dr Dan Wright, research associate; and Tom Anderson, business development manager, contributed to this article. Market
Government needs to reassure the market that it remains committed to the UK’s transformation of its energy sector. Tom Anderson, EBRI Dr Scott: If gasification projects are to play a significant role in the future bioenergy mix, the coming 12-24 months are crucial. For developers to make best use of the more generous offers under CfD projects need to be in progress or starting to be developed in 2015. Any later and those projects are not likely to be commissioned in time. The ancillary equipment around gasification technologies all appears to be ready, but the long-term operating costs and reliability is a little unsure. The AD sector will also continue to see large AD facilities being proposed, but missing the opportunity for smaller scale, more heat and transport efficient projects — partly due to government incentives. Anderson: I believe the future for the bioenergy sector, whether in 2015 or perhaps a little later, will be the transition to a broader ‘bio-based’ economy. This means that we will no longer focus exclusively on transforming biomass into energy (bioenergy), but rather that we will extract maximum value from the biomass by transforming it into higher-value products such as platform chemicals, solvents and fuels. This approach mirrors the development of the oil industry where refineries have been developed to convert crude oil into a range of products. The development of bio-refineries that can replicate this approach for biomass would seem the logical path for the sector. At EBRI we are working on the concept of an “integrated biorefinery” where high-value biomass can be transformed into higher-value products through catalytic processes and the power required for this highvalue process is provided by pyrolysis and gasification of lower-value wastes and residual biomass.
Q: Looking ahead to the general election, what does the incoming Government need to do in order to truly foster the potential of
bioenergy and its take-up among businesses? Professor Tony Bridgwater: I think there are four key things: 1. Maintain and develop support mechanisms for industry to encourage biomass exploitations; 2. Encourage innovation in bioenergy and biofuels; 3. Maintain long-term R&D in areas requiring consistent long-term assessment, e.g. biomass/crop development; and 4. Encourage more interactions between industry and academic with incentives to industry to collaborate. There are already incentives for academia; generally, I would like to think that the new year will bring steady commercial expansion and academic development through R&D. Anderson: I think that the incoming government needs to do two things: Firstly, it should seek to reassure the market that it remains committed to the UK’s transformation of its energy sector. In recent years, an element of uncertainty has crept in to the market as investors are cautious about the medium to long-term commitment of the government to bioenergy and other renewables. All renewables rely upon incentive and subsidy schemes to become economically viable, as they have had to pass through an accelerated R&D phase due to the pressing need to offer low-carbon alternatives for energy generation and to compete against fossil fuelled generators where carbon emissions are incurred as externalities to the business. (The changes to the UK’s incentive schemes and scepticism surrounding carbon reduction targets from parts of the current government can have the effect of eating away at investor confidence.) Secondly, I think the government should seek to raise the profile of advanced bioenergy technologies. Whereas wind, solar and nuclear power are often regarded as being at the cutting edge of UK research and innovation,
bioenergy (and energy-from-waste) are very much a ‘Cinderella’ sector that is seen to lack the glamour or excitement of other technologies. Too often the discussion about bioenergy is focussed on mass burn incinerators or food waste AD plants, which do not present a great public image. It would be great if we could raise the profile of the more advanced pyrolysis and gasification technologies that show the sector in a better light. Dr Wright: All the political parties need to fully support renewables and bioenergy, particularly in the areas of heat and transport. The UK continues to have the largest percentage increase required to meet our legally binding 2020 commitment. Much attention has focused on renewable electricity production previously, but it is only bioenergy that has the potential to generate the large gains required for renewable heat. Editor’s note: In response to the increasing interest in gasification, EBRI recently hosted a special industryacademic summit on the challenges and opportunities for the gasification sector.
References 1. The total 2012 market for wood pellets in the whole EU was just 14 million tonnes. Although significant resource and capacity increases are available in EU nations the major investments in the supply chain of pellets have been in North America where the supply market is healthy due to well-established blue-chip land owners, lack of domestic competition from paper or energy industries, experienced practitioners and partly a surplus of supply due to the ongoing mitigation measures for North American Pine Beetle infestation. In the last 12 months the demand side of the equation for this sector has started to take shape, but uncertainty in the supply side has been revealed.
JANUARY/FEBRUARY 2015 | Renewable Energy Focus
25
Outlook improving for UK bioenergy
E
XPERTS FROM Aston University’s European Bioenergy Research Institute (EBRI) recently shared their views of the UK’s nascent bioenergy sector with Renewable Energy Focus magazine.
The experts from EBRI included: Professor Tony Bridgwater, director; Dr Jim Scott, research associate; Dr Dan Wright, research associate; and Tom Anderson, business development manager. Following are excerpts of their comments:
Q: What is the biggest development for bioenergy in the UK in 2014? Tom Anderson: The last year has seen a significant increase in the profile of gasification and particularly gasification of refuse-derived fuels. Whereas in previous years EBRI has predominantly fielded enquiries from industry regarding more established bioenergy processes, such as anaerobic digestion (AD) and combustion, the last 12 months have seen a marked
increase in industry interest in gasification. This has ranged from larger companies seeking technical support for proposed, larger-scale installations at Tyseley, through to SMEs looking for R&D funding to develop innovative small-scale gasifier technology. Developments that have enabled gasifier technology to process wastes and residues (as opposed to expensive virgin materials) have been the key drivers for this upsurge in interest in gasification, largely due to changing attitudes amongst local authorities who are seeking to move away from waste incineration and towards more advanced applications. Dr Jim Scott: 2014 was supposed to be a year of calm for the large-scale biomass to electricity sector, falling between the market uncertainty
introduced by consultations on renewables obligation certificates, grandfathering and the exact wording of the electricity market reform (2009-13), and in advance of the 2017 introduction of contracts for difference. The large scale power from the biomass sector appears to have settled on cofiring conversions as the best avenue for new capacity rather than dedicated new build biomass combustion plant. The successful — if short lived — trial at RWE’s Tilbury plant and ongoing commitment of E.On, RWE, Drax and their supply chain partners has shown that conversion from coal to biomass is the most feasible exit route for coal stations falling foul of pollution limits in the large combustion plant directive. Whilst uncertainty in policy may have relatively settled down, market uncertainties and realities are now causing some conversion investments to pause for thought. At least four proposed coal-to-biomass conversions have been announced by UK generators, and if all go ahead these alone will create a demand of around 17-20 million tonnes of wood pellets each year.1 Dr Dan Wright: One of the most significant developments in bioenergy in 2014, although technically announced in late 2013, is recognition that greater support is required to incentivise biomass combined heat and power (CHP) systems under the renewable heat incentive. The introduction of a specific band for solid biomass CHP and an expansion in the coverage for larger AD systems (>250kWth) will greatly support the UK to catch up with the rest of Europe in renewable heat production.
Q: What does 2015 hold for bioenergy in the UK?
This past December the European Bioenergy Research Institute (EBRI) at Aston University hosted its first ever master class for West Midlands businesses to find out how they can make power (and money) from turning their waste sources into cost-effective energy.
24
JANUARY/FEBRUARY 2015 | Renewable Energy Focus
Dr Wright: 2015 will be full of the unknown, because of market reform. The start of the Contracts for Difference (CfD) scheme and the transition from the renewables obligation system, will, at best, be a learning experience and, at worst, could lead to a market hiatus for developers and other key stakeholders. There is also general consensus that the shake-up will be disproportionally impact SMEs and independents.
About: Aston University’s Professor Tony Bridgwater, director; Dr Jim Scott, research associate; Dr Dan Wright, research associate; and Tom Anderson, business development manager, contributed to this article. Market
Government needs to reassure the market that it remains committed to the UK’s transformation of its energy sector. Tom Anderson, EBRI Dr Scott: If gasification projects are to play a significant role in the future bioenergy mix, the coming 12-24 months are crucial. For developers to make best use of the more generous offers under CfD projects need to be in progress or starting to be developed in 2015. Any later and those projects are not likely to be commissioned in time. The ancillary equipment around gasification technologies all appears to be ready, but the long-term operating costs and reliability is a little unsure. The AD sector will also continue to see large AD facilities being proposed, but missing the opportunity for smaller scale, more heat and transport efficient projects — partly due to government incentives. Anderson: I believe the future for the bioenergy sector, whether in 2015 or perhaps a little later, will be the transition to a broader ‘bio-based’ economy. This means that we will no longer focus exclusively on transforming biomass into energy (bioenergy), but rather that we will extract maximum value from the biomass by transforming it into higher-value products such as platform chemicals, solvents and fuels. This approach mirrors the development of the oil industry where refineries have been developed to convert crude oil into a range of products. The development of bio-refineries that can replicate this approach for biomass would seem the logical path for the sector. At EBRI we are working on the concept of an “integrated biorefinery” where high-value biomass can be transformed into higher-value products through catalytic processes and the power required for this highvalue process is provided by pyrolysis and gasification of lower-value wastes and residual biomass.
Q: Looking ahead to the general election, what does the incoming Government need to do in order to truly foster the potential of
bioenergy and its take-up among businesses? Professor Tony Bridgwater: I think there are four key things: 1. Maintain and develop support mechanisms for industry to encourage biomass exploitations; 2. Encourage innovation in bioenergy and biofuels; 3. Maintain long-term R&D in areas requiring consistent long-term assessment, e.g. biomass/crop development; and 4. Encourage more interactions between industry and academic with incentives to industry to collaborate. There are already incentives for academia; generally, I would like to think that the new year will bring steady commercial expansion and academic development through R&D. Anderson: I think that the incoming government needs to do two things: Firstly, it should seek to reassure the market that it remains committed to the UK’s transformation of its energy sector. In recent years, an element of uncertainty has crept in to the market as investors are cautious about the medium to long-term commitment of the government to bioenergy and other renewables. All renewables rely upon incentive and subsidy schemes to become economically viable, as they have had to pass through an accelerated R&D phase due to the pressing need to offer low-carbon alternatives for energy generation and to compete against fossil fuelled generators where carbon emissions are incurred as externalities to the business. (The changes to the UK’s incentive schemes and scepticism surrounding carbon reduction targets from parts of the current government can have the effect of eating away at investor confidence.) Secondly, I think the government should seek to raise the profile of advanced bioenergy technologies. Whereas wind, solar and nuclear power are often regarded as being at the cutting edge of UK research and innovation,
bioenergy (and energy-from-waste) are very much a ‘Cinderella’ sector that is seen to lack the glamour or excitement of other technologies. Too often the discussion about bioenergy is focussed on mass burn incinerators or food waste AD plants, which do not present a great public image. It would be great if we could raise the profile of the more advanced pyrolysis and gasification technologies that show the sector in a better light. Dr Wright: All the political parties need to fully support renewables and bioenergy, particularly in the areas of heat and transport. The UK continues to have the largest percentage increase required to meet our legally binding 2020 commitment. Much attention has focused on renewable electricity production previously, but it is only bioenergy that has the potential to generate the large gains required for renewable heat. Editor’s note: In response to the increasing interest in gasification, EBRI recently hosted a special industryacademic summit on the challenges and opportunities for the gasification sector.
References 1. The total 2012 market for wood pellets in the whole EU was just 14 million tonnes. Although significant resource and capacity increases are available in EU nations the major investments in the supply chain of pellets have been in North America where the supply market is healthy due to well-established blue-chip land owners, lack of domestic competition from paper or energy industries, experienced practitioners and partly a surplus of supply due to the ongoing mitigation measures for North American Pine Beetle infestation. In the last 12 months the demand side of the equation for this sector has started to take shape, but uncertainty in the supply side has been revealed.
JANUARY/FEBRUARY 2015 | Renewable Energy Focus
25