United Kingdom
Table 13: Key renewable and biomass energy statistics, UK
Electricity from biomass |
Heating and cooling from biomass |
% of total energy |
||||||
---|---|---|---|---|---|---|---|---|
Mtoe |
% of total electricity |
% of ren electricity |
Mtoe |
% of total heat/cool |
% of ren heat/cool |
Biomass |
All renewables |
|
2009 |
0.31 |
1.0% |
14.5% |
1.22 |
2.1% |
90.7% |
1.1% |
3.3% |
2016 |
1.69 |
5.5% |
22.5% |
2.86 |
5.1% |
73.1% |
3.4% |
9.3% |
Annual average growth |
27.2% |
12.9% |
17.5% |
16.0% |
||||
2020 target |
15.0% |
Source: Eurostat SHARES database, http://ec.europa.eu/eurostat/web/energy/data/shares.
Note: Biomass as a percentage of total energy does not include solid biomass used for transport fuel (volumes are not yet significant).
Demand for woody biomass
Of all EU member states, the UK has seen the most rapid growth in the use of biomass for electricity, in absolute terms. In 2016, the UK accounted for 21 per cent of all the electricity generated from biomass in the EU. Since 2009, the use of biomass for electricity in the UK has grown by 27 per cent a year, faster than the 19 per cent growth rate of electricity from renewables as a whole, which is itself high by EU standards. Renewable energy was relatively undeveloped in the UK when the country agreed its target for 2020 under the 2009 Renewable Energy Directive; significant investment was required in all sectors. The outcome has been a very rapid growth in wind, which in 2016 accounted for 47 per cent of total renewable electricity; at the same time, biomass and solar made up 22 per cent and 12 per cent, respectively. Despite this, the UK is not on track to meet its Renewable Energy Directive target of 15 per cent of energy from renewables by 2020, partly because the Conservative governments in power since 2015 have reduced support for renewable energy generation (including ending support for new onshore wind and drastically reducing it for new solar PV, and ending the renewables exemption from the Climate Change Levy in 2016), and partly because of much slower progress in heat and transport from renewable sources than in power generation.
Although some dedicated biomass power plants have been constructed, the growing demand for biomass power is largely due to the conversion of coal-powered stations, accounting for about two-thirds of biomass electricity (co-firing with coal has now ended after reductions in the level of support), and in particular the conversion of four of the six units at the Drax power station in Yorkshire.201 The last coal station to be built in the UK, Drax is also the largest (with approximately a 4 gigawatt capacity), supplying about 7 per cent of UK electricity. It started co-firing coal with wood pellets in 2003 and fully converted its first unit in 2013; conversion of the fourth unit started in 2017 and is due for completion in 2018. By July 2016, 65 per cent of the electricity it generated was from wood pellets, representing around 20 per cent of the UK’s renewable power.202 It is the largest biomass-burning power station in the world. Conversion of its two remaining coal units seems unlikely, however; the company has announced plans to replace two units with gas turbines and also invest in a large battery storage facility. The government is committed to phasing out power generation from unabated coal by 2025.
In sharp contrast to most EU member states, the use of biomass in heat generation is much smaller, though it has also grown relatively quickly. In 2016, biomass accounted for about three-quarters of total renewable heat in the UK, but renewable heat only represented 7 per cent of all heat consumed (in contrast, renewable electricity accounted for 25 per cent of total electricity). Of the heat generated from biomass in 2015, the household sector accounted for 54 per cent, industry for 22 per cent, and CHP production for 10 per cent.203
The government’s Bioenergy Strategy published in 2012 projected that by 2020 the share of biomass in power generation would account for 5–11 per cent, with a further increase to 14 per cent by 2030.204 Current generation is in line with these projections, but the faster than anticipated falls in the price of competing renewables, particularly offshore wind, is likely to see growth below the projected trend, though this depends partly on future government support for the various renewable technologies. The strategy document in any case foresaw much reduced growth after 2030, mostly because of higher costs and limited availability of feedstock due to increased competition in the global market; this was also the conclusion of the independent Committee on Climate Change’s Bioenergy Review in 2011.205
The strategy projected that by 2020 the share of biomass in heat generation would account for 6 per cent but then probably fall thereafter because of restrictions in supply, though its role in industrial heating was expected to be increasingly important.206 Given that in 2016 heat from biomass reached 5.1 per cent of total heat, the 6 per cent figure is plausible. Other renewable heat options (mainly heat pumps and solar thermal) have been slow to commercialize at scale, though their deployment is likely to increase as the UK makes further progress in decarbonizing its heat supply.
Biomass supply
The UK has a much smaller forest industry than most other EU member states, producing just under 11 million m3 of roundwood in 2016.207 Imports, particularly of wood pellets, therefore dominate the supply of biomass for energy. Relatively easy to transport and store, pellets are well suited to their main end uses in the UK, in large-scale power and CHP plants; in 2016, the country consumed an estimated 26 per cent of all the wood pellets produced worldwide.208 There is some domestic production, reaching 358,000 tonnes in 2016, but a far larger volume is imported; annual imports reached about 7.5 million tonnes in the middle of 2016, though they have dropped slightly since (see Figure 31).209 Drax alone burnt 6.6 million tonnes of biomass (almost entirely pellets) in 2016 – almost 23 per cent of total global production.210
The UK’s biomass sources of supply have shifted greatly over the last 10 years; in 2008, Russia was the main supplier (of a far smaller volume), followed by Canada, Latvia and several other EU member states. As demand grew rapidly, sources of supply shifted to those countries that were able reliably to provide much larger quantities at low cost. In 2016, just three countries supplied over 90 per cent of UK imports: the US (58 per cent), Canada (20 per cent) and Latvia (13 per cent) (see Figure 31).
Figure 31: The UK’s biomass imports potentially for energy, 2010–16
Wood pellets from the southeast of the US seem likely to remain the major source of UK imports, especially when two further biomass-fired power stations begin operations: Lynemouth, a conversion of a previously mothballed coal station to biomass, and MGT Teesside, a new dedicated biomass plant. While these stations are both smaller than Drax in terms of the requirement for pellets (though Teesside, with a capacity of 299 MW, will be the largest dedicated biomass power plant in the world), they have already signed a long-term agreement to procure most of their pellets from one of the leading suppliers in the southeast of the US, Enviva.211
The 2012 bioenergy strategy anticipated that imports would continue to dominate supply for power and heat generation up to 2050, though with a significant fall after 2030 due to barriers in technology deployment and increased global competition for wood pellets.212 The domestic supply of biomass was also expected to grow, mostly from agricultural residues and energy crops such as miscanthus and short rotation coppice – though in fact government attempts to encourage planting of energy crops has been unsuccessful, and the area planted with each crop in England has fallen since 2008.213 The domestic supply of wood was also expected to increase, partly by improving supply from unmanaged woodlands – though the document noted this would require a large mobilization of resources and careful consideration of whether it might displace supplies of wood for non-energy uses.
In March 2017, however, a new analysis of the availability of biomass feedstock to the UK, commissioned by the government, was published.214 The report analysed constraints on supply under the UK’s existing sustainability criteria, the global availability of land for biomass and competition for biomass supplies. It concluded that far less biomass was likely to be available for UK energy generation by 2030 than had previously been assumed – 70–90 per cent less for imports and 30–40 per cent less for domestic production.
Support for biomass
Support for biomass energy is delivered through three main mechanisms: the Renewables Obligation scheme, which for new installations has now been replaced by the Contracts for Difference system, for electricity; and the Renewable Heat Incentive for heat. (Feed-in tariffs for microgeneration are also important for anaerobic digestion that produces biogas for electricity generation.)
Launched in 2002 to encourage large-scale renewable electricity generation, the Renewable Obligation scheme requires UK electricity suppliers to procure a proportion of their electricity from renewable sources.215 The government sets the suppliers’ obligations as a number of Renewable Obligation Certificates (ROCs), which increases annually. Eligible renewable energy generators are issued certificates by the regulator, the Office of Gas and Electricity Markets (Ofgem); the renewable power generated, accompanied by ROCs, is then sold to suppliers, which must accumulate enough ROCs to meet their obligations and avoid paying a penalty. The additional cost to suppliers is recouped through a levy on electricity bills.
In 2015, solid biomass received over £800 million in subsidies through the Renewable Obligation scheme, of which Drax received £540 million.
The number of ROCs issued per unit of electricity is adjusted by the technology used, as a means of delivering different levels of support depending on the maturity and cost of each renewable source. For the period 2013–17, biomass electricity generated 1.4 ROCs per MWh for new dedicated biomass power plants, 1 ROC per MWh for power plants converted from coal to biomass, and 0.5–0.9 ROCs per MWh for plants co-firing biomass with coal.216 If CHP was added, all these figures were increased by 0.4 or 0.5. (In comparison, onshore wind was eligible for 0.9 ROC per MWh, and offshore wind, tidal barrage and tidal lagoon for 1.8 ROC per MWh.) In the face of a large number of applications for new dedicated biomass stations, in 2013 the government placed a cap of 400 MW on new capacity in order to limit its development, and focus on the conversion of coal-powered stations. In 2015, solid biomass received over £800 million in subsidies through the Renewable Obligation scheme, of which Drax received £540 million.217 By 2017 the ROC subsidy to Drax had fallen to £481 million, as the station’s third unit had transferred to the new Contracts for Difference system (see below), for which it received £248 million; the total subsidy to Drax alone was thus £729 million.218
In January 2014, a new renewable support mechanism under the UK’s electricity market reform programme was introduced to facilitate cost-effectiveness and long-term price stability: the Contracts for Difference system.219 New applications under the Renewable Obligation incentive closed on 31 March 2017 (for solar PV, in 2016), with a few transitional exceptions, and accredited ROCs will end in 2037.
The new mechanism is intended to provide a more cost-effective way of delivering subsidies to renewable electricity generation, avoiding the problem of excessive subsidies, which the Renewable Obligation system could lead to when the market retail price of electricity was high (since the Renewable Obligation system simply added a slab of subsidy on top of the market price, whatever it was); the system is also intended to increase competition when the contracts are offered through auction. Open to all low-carbon generation (including nuclear), under the new system the government agrees with generators a ‘strike price’ per unit of electricity, which it guarantees to pay (for 15 years for renewables). If the retail price proves to be lower than the strike price, the government pays the generator the difference; if the retail price is higher, the generator reimburses the government for the difference.
No contracts for biomass power were awarded by the first auction under the new Contracts for Difference system in February 2015, though three contracts were awarded without auction: to Drax for the conversion of its third unit and to the Lynemouth and Teesside power stations mentioned above. The second auction, which concluded in September 2017, was open (subject to a capacity cap) to bids for dedicated biomass or waste with CHP and advanced conversion technologies, including gasification of waste or biomass. Two dedicated biomass CHP plants (including one very small station) won bids, though the auction was notable mainly for the very sharp decline in the costs of offshore wind, suggesting that the auction was indeed helping to increase competition.220 The third auction is due in spring 2019 and is expected to focus primarily on offshore wind and biomass.221 The system’s minimum efficiency requirement for CHP plants, of 35 per cent, has been criticized as being too low (efficiencies of 70 per cent or higher are common elsewhere) and in December 2017 the government launched a consultation on raising the minimum level to 70 per cent.
Support for biomass heat is provided through the Renewable Heat Incentive (RHI), the world’s first long-term financial support programme for renewable heat, which was introduced in 2011 for non-domestic buildings and in 2014 for households.222 Similar to a feed-in tariff scheme, the RHI pays participants for each unit of heat generated, at a price guaranteed for 20 years. For biomass boilers and pellet stoves, the domestic RHI currently pays a tariff of £0.122/kWh. By December 2017, non-domestic installations supported by the RHI had generated almost 1.72 Mtoe of heat since November 2011, of which slightly over 60 per cent came from small or medium-sized biomass stations. Domestic installations had generated 0.17 Mtoe since April 2014, about half from biomass – although recent installations were much more likely to have been heat pumps.223 In the Clean Growth Strategy published in October 2017 the government stressed its intention to reform the RHI to encourage greater uptake of technologies such as heat pumps and biomethane.224
In addition to these schemes, the Green Investment Bank, which was created by the government in 2012 to support investment in a range of renewable technologies, agreed a loan to Drax in support of its conversion of three of its six generating units from coal to biomass.225 In 2017, the bank was sold to Macquarie Group, and the Green Investment Group, as it is now known, has yet to announce any further plans for investment in biomass.
The Green Investment Bank, which was created by the government in 2012 to support investment in a range of renewable technologies, agreed a loan to Drax in support of its conversion of three of its six generating units from coal to biomass.
Growth in domestic feedstock has been supported by a variety of schemes providing financial support for new planting, woodland management and fuel and timber production in unmanaged woodland; separate schemes operate in England and the devolved administrations of Scotland, Wales and Northern Ireland. The grant schemes have been criticized as inadequate and complex, and in 2015–16, planting in England fell to its lowest level for 40 years, to an estimated 700 hectares a year, compared to a government target of 5,000 hectares a year.226 In January 2018, the government published a 25-year environment plan, which contained a series of proposals to increase the rate of tree planting.227
Sustainability criteria
Following the cap on new dedicated biomass plants under the Renewable Obligation scheme, in August 2013, the government published proposals for sustainability criteria for biomass; these were finally agreed in 2014 for application in 2015. They apply to support provided to biomass under all the schemes described above.
The requirements include the detailed environmental and social criteria for legal and sustainable forest products contained in the government’s existing timber procurement policy.228 Products certified under the FSC, PEFC or Sustainable Biomass Partnership schemes have been assessed as meeting all or most of these criteria (additional information may be required in some cases), but since much of the biomass sourced from the US tends not to be certified (the uptake of forest certification schemes in the US is relatively low), the regulations also allow operators to supply credible evidence of a low risk of non-compliance with all the criteria for a defined region (an area across which relevant legislation is the same – e.g. a US state) – or a smaller area if they can trace it back.229 As in the timber procurement policy, up to 30 per cent of the biomass used in a facility can be non-compliant with the sustainability requirements, though it must be legal.
The criteria also include targets for carbon emissions per unit of electricity; these strengthen over time, and are equivalent to 72 per cent greenhouse gas savings from life-cycle emissions, compared to fossil fuel alternatives, by 2020, and 75 per cent by 2025.230 As in other EU member states, the calculation excludes changes in the forest carbon stock and emissions from indirect land-use change.