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EU To Investigate Drax Biomass Subsidies

January 28, 2016

By Paul Homewood  

 

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An investigation has been launched by the European commission into the UK’s plans to convert part of its Drax coal power plant to biomass.

Diesel farm

The commission wants to make sure that Drax plans are in line with EU state aid rules, after giving the go ahead to a similar conversion taking place in Lynemouth for German energy group RWE.

According to figures from the PwC, the burning of wood pellets in plants rather than coal reduces their carbon footprint by 86%.

The commission commented that it “fully supports member state efforts to increase the use of renewable energy and pursue EU energy and climate objectives. At the same time, EU state aid rules make sure that the cost of such support for consumers is limited and does not give certain operators an unfair advantage over competitors.”

Under a new UK support measure for renewable energy projects the Drax power plant, along with several others, were selected for the conversion project. The plans were sent to the EU for consideration last April.

The worries voiced by the commission are that the estimates for the converted plant’s economic performance are too conservative, and that this could lead to overcompensation. The number of wood pellets required for a plant of that size to provide enough power is also concerning, they say, because it could distort competition in the biomass market.

A Drax spokesman said: “We welcome this announcement as the next step towards the full conversion of our third generating unit from coal to sustainable biomass. A positive outcome will result in half our power station running on biomass. This will improve the security of UK electricity supply and, in saving more than 12 million tonnes of carbon per year, play a critical role in helping the UK meet its climate change targets.”

However, the uncertainty of the commission’s decision caused shares in the group to fall more than 4.5%. Insiders at Drax have said they are not worried about their maximum annual demand for biomass having a significant effect on its price as there is a huge surplus of 50m tonnes each year in the softwood forest of the south-east of the US alone.

http://www.catalyst-commercial.co.uk/energy-blog/biomass-power-plant-conversion-must-comply-with-eu-rules/?awt_l=66cIw&awt_m=3ZE9YYUXY1WoIOV

  

Once again we see the EU sticking its nose into UK energy policy.

Under the Contract for Difference arrangement, Drax would be guaranteed £105 for every MWh it produces for fifteen years, at 2012 prices and index linked.

The unit involved has a capacity of 645 MW, and it is estimated that the cost of subsidies, which would be paid for by electricity bill payers, could exceed £200 million a year.  

  

      

 

FOOTNOTE

Catalyst obviously did not get the memo telling them that only dirty coal makes black smoke!

17 Comments leave one →
  1. Paul2 permalink
    January 28, 2016 1:28 pm

    To be honest I’d love to see the full closure of Drax. It stands there, just as a wind turbine does, as a painful reminder to us all of the utter stupidity of politicians in regard to energy policy.

    • ralfellis permalink
      January 28, 2016 3:42 pm

      At nearly 10% of UK generation, there was no way that Drax could be closed. I am waiting to see how these ships carrying pellet fare – I understand that pellets can spontaeously combust.

  2. David Richardson permalink
    January 28, 2016 3:03 pm

    “According to figures from the PwC, the burning of wood pellets in plants rather than coal reduces their carbon footprint by 86%.”

    So does that mean the 14% is the allowance for logging, chipping, drying, shipping, damping to avoid combustion (well until you want it) etc. Well I have no feel for the true size of that, but I suspect that it is conservative.

    BUT does that also mean that the 86% figure assumes that wood burning has no “carbon footprint” when even some green NGOs have started to understand that such operations have a carbon debt of 50 to 100 years.

    • Graeme No.3 permalink
      January 28, 2016 6:02 pm

      David Richardson:

      A good question. There have been reports that using (slightly damp) wood chips leads to 20% more CO2 emission than black coal. Much as burning brown coal brings higher emissions than black coal – from 14 -34% depending on quality). With the logging, chipping, shipping etc. adding at least another 5% would seem conservative, so that 14% may well be the right allowance.
      What gets to me is the £105 per MWh, which is 7 times the wholesale price of brown coal fired electricity in Victoria. Mind you the power station is as close to the coal as Drax could be if the UK still had coal mines, and the emissions are much higher.

      • A C Osborn permalink
        January 28, 2016 6:15 pm

        As far as I know Wood pellets are far less efficient, they have to burn much more of them to get the same power generation as coal.
        I have seen values for CO2 output as much as 100% more than coal before all the chipping, drying, pelleting, shipping and storage costs & co2 have been taken in to consideration.
        The excuse for their use is that they are “Carbon Neutral”, ie you cut down the trees and grow new ones.
        The biggest load of B*llSh*t ever.

  3. ralfellis permalink
    January 28, 2016 3:39 pm

    Translation:

    “You must use biomass.”
    “Whaaaat! You are using that much biomass? We thought a couple of trees a year would power the UK……”

  4. Ex-expat Colin permalink
    January 28, 2016 3:48 pm

    Not important…paper rounds have to go. I wish I could get a paper delivered that way so WTF are they on about!

  5. Steve permalink
    January 28, 2016 5:20 pm

    Pardon me for being a bit thick but I thought burning coal = fossilised trees that have not been part of the carbon cycle (as in breathing in Co2 and breathing out oxygen) for millions of years.
    In contrast doesn’t burning what were recently actual living trees mean their precious Co2 is actually made worse because they have killed some of the absorbers (as well as transporting it vast distances, processing it etc? An inconvenient truth?

    • 3x2 permalink
      January 29, 2016 1:22 pm

      Yes but in a hundred years time when the Forrest has grown back to its current state then the net CO2 will be zero (minus processing, transport and the rest… call that interest). It’s a CO2 loan to be paid off over a hundred years or so.

      A Hideously expensive and pointless loan but hey that’s what makes it good for the environment (except that of the SE US of course).

  6. Horse permalink
    January 28, 2016 5:48 pm

    I have always been under the impression that burning wood pellets actually produces more CO2 per unit of electricity that coal. Indeed, I believe the figure is somewhere in the region of 40%. How then can it reduce the carbon footprint of a wood pellet burning by 86%? Are they assuming that the replacement trees, when they grow, will absorb all but 14% of the CO2 produced? Someone has to be joking. Unfortunately, some will believe the 86% figure.

  7. sailor1031 permalink
    January 28, 2016 5:50 pm

    It would seem someone is telling porkies about significantly less CO2 emission from burning wood:

    http://www.canadianbiomassmagazine.ca/education/a-closer-look-at-wood-vs-coal-emissions-3166

    In fact coal seems to be preferable

    • Graeme No.3 permalink
      January 28, 2016 7:08 pm

      sailor1031:

      Thank you for that link. What they say is that dry wood gives no more emissions than dry coal. But at Drax the choice is wet wood v (dryish) coal.
      The same applies to brown and black coal. The germans claim that the newest brown coal plant emits 800 kg per MWh because the coal is dried by waste heat before burning. That compares with 700 for newest black coal plants, 960 for old black coal plants in NSW and 1290 for lignite plants in Victoria.

      What they don’t say is that wood chips as used by Drax are prone to spontaneous combustion, hence use of special ships, storage and rail trucks. In all of these water would be applied to prevent any fire and you can be sure that those sitting on the hazard won’t spare the precaution. So we are back at the start, wood chips as used at Drax will undoubtedly emit more CO2 per unit output, but unless there is continuous monitoring of the water content we won’t know how much (except that it won’t, from the canadian figures, be more than 34%).

  8. Bloke down the pub permalink
    January 28, 2016 6:51 pm

    Once the alterations have been made at Drax, is it still possible to burn coal there or would they need to be re-converted?

  9. michael hart permalink
    January 28, 2016 7:04 pm

    So how does biomass generation fit in with respect to wind? That is, are customers forced to buy it at relatively inflated prices, and did the EU have to give permission for wind and solar subsidies?

    • January 28, 2016 7:42 pm

      The guarantee of a strike price (which is topped by the govt from the market price received) effectively means Drax can sell as low as it wants. As with wind, this effectively gives them a preferential access to the market.

  10. AndyG55 permalink
    January 28, 2016 8:22 pm

    Things could get interesting if an incoming US resident decided that destroying US forests to ship as woodchips to the UK is not in the countries best interest.

    And down here in Oz, farmers can’t clear areas of their land as fire breaks without the greenies getting upset. !!

    Go figure.

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