New-build, power-only biomass will not be able to claim contracts for difference (CfDs), the support mechanism that succeeds the Renewables Obligation (RO), it was confirmed.
The Renewable Energy Association (REA) called the decision “misguided” and urged government to reconsider. It is the knockout blow for a technology that was already on the ropes and will intensify a race between biomass developers to get guaranteed support through the RO, capped at 400MW.
Justifying the decision in its consultation paper, the Department of Energy and Climate Change (Decc) said: “In the medium to long term, new build electricity-only biomass plant do not offer as cost effective a means of decarbonising the electricity grid as other renewables technologies, including offshore wind.”
While limited by a 400MW cap on support under the RO, many biomass developers were holding out hope of a future in the CfD regime. Decc said to offer dedicated biomass CfD support “would circumvent our policy intent to discourage electricity-only new build and to encourage more resource efficient technologies such as CHP and heat”.
Gaynor Hartnell, chief executive of the REA, said: “It should not be a case of choosing between converting coal fired power stations to biomass or building new projects; the two operate at different scales and both can play an important role. This decision sends a terrible message to investors.”
Decc favours conversion of coal or co-firing generators to sustainable biomass and dedicated biomass combined heat and power (CHP).
Conversion projects are being offered a flat rate of CfD support to 2027, a shorter contract than other renewables in light of the fact they are extending the life of plant that are already quite old. This “offers a quick, cost-effective way to rapidly decarbonise electricity generation in the short to medium term”, Decc said.
In the medium term, government considers dedicated biomass CHP a “low-risk pathway for the use of bioenergy to 2030 in view of its higher efficiency “.