INVESTMENTS & TECHNOLOGY
THE UK PLANS A HUGE EXPANSION IN BIOMASS POWER CAPACITY
May 2009
The United Kingdom has arguably the most ambitious GHG emission reduction targets in Europe. Under the EU Renewable Energy Directive the UK is committed to increasing the renewable energy share of the country’s final energy use to 15% in 2020, from just 1.3% in 2006. Although in percentage terms most other countries have higher renewable energy targets for 2020, no other EU country is starting from such a low base.
In terms of renewable electricity, the UK’s targets are even more ambitious. Last year the government published its draft renewable energy strategy which proposed that electricity suppliers should generate 30-35% of their electricity from renewables by 2020, up from just 5.3% in 2007. Although some of the big utilities are questioning the wisdom of aiming a such a high target, arguing that over-investment in the supply of intermittent wind energy may crowd out investment in much more reliable baseload nuclear energy, the government shows no sign of reducing it.
If the target is confirmed when the final Renewable Energy Strategy is published later this summer, it will require the construction of up to 30 GW of new renewable power capacity to replace the many coal and nuclear plants that are scheduled to close over the next decade. The government envisages that much of the new capacity will be wind – particularly offshore wind which it thinks could provide 14 GW of the new capacity, up from <1 GW today – but inevitably biomass will have an important role. Biomass, including biogas, is currently the UK’s largest source of renewable electricity (with a capacity of about 1.5 GW in 2007, 2% of total power capacity), but this will need to increase sharply if the targets are to be reached.
Over the past year there has been a steady flow of announcements of projects to build biomass power capacity in the UK. Once built, some of these plants will be largest of their kind in the world. Given that the UK will be able to supply only a relatively small fraction of the necessary feedstock (of which more later) they will become major players in the global biomass markets. The most significant projects are shown on the map on the previous page. The list is not exhaustive – for example, existing biomass plants and smaller biomass CHP projects are not shown – and some of the projects are at a very preliminary stage of development, but it gives a sense of the scale of investment that is being contemplated and the consequences for feedstock demand.
The largest of the investments is a series of projects being developed by Drax Power, the UK’s largest electricity generator with a capacity of 4 GWe at its giant power station near Selby in Yorkshire. Drax has been co-firing biomass with coal for several years: in 2008 it is estimated to have used approximately 200,000 tonnes of biomass, principally wood pellets. The company is currently building a new 400 MW co-firing facility which will increase the power station’s co-firing capacity to 500 MWe, or 12.5% of the total output. When it is completed in mid-2010, Drax calculates that it will be the largest co-firing power station in the world and will be consuming around 2.0 million tonnes/year of biomass, again mostly imported wood pellets.
This is just the start, however. In October last year Drax announced Project Willow, a 60:40 joint venture with Siemens Project Ventures to build three 300 MWe dedicated biomass power plants. One of these – the so-called Heron Renewable Energy Plant – will be built on land at the south west edge of the Port of Immingham. A second – the Ouse Renewable Energy Plant - will be built on land adjacent to the existing Drax Power Station. The site of the third plant is likely to be near Hull. Construction of the first plant is expected to start in 2010 and to be completed in 2014. The other two plants will come on stream through 2017. The full project costs of the three plants, including infrastructure, is put at around £2.0 billion ($2.9 billion).
Each of the three dedicated biomass power plants will consume 1.3-1.4 million tonnes/year of biomass, depending on the type of material used. (The figures here assume wood pellets at 17 GJ/t.) So, by the time the third power plant is on stream, Drax should have a biomass electricity capacity of 1.4 GWe and will be buying up to 6.2 million t/y of wood pellets or equivalent biomass.
Eighty kilometres further north, MGT Power is planning a similar scale biomass power plant near Teesside. The 300 MWe Tees Renewable Energy Plant, complete with a dock and 120,000 t of biomass storage, will be built on disused land in Tees Port. The feedstock for the plant will comprise woodchips, mostly imported from sustainably managed SRC plantations which MGT and its partners are developing in Europe, North America and the UK. Assuming that all the feedstock will be green woodchips at about 10 GJ/t (40% moisture), the annual biomass requirement will be around 2.3 million t/y. The company has received the approval of local authorities and is now awaiting Section 36 approval from the government. Subject to this, and financing, the Teeside plant could be operating from 2012.
On the other side of Britain there is another cluster of projects around the Bristol Channel. The largest is the 350 MWe plant being developed by Prenergy Power. The project has already received Section 36 approval and is under construction at Port Talbot. When it comes on stream, which is expected to be in 2012, Prenergy calculates that it will supply 70% of Wales’s renewable energy target. The feedstock for the plant will be mainly chipped forest residues from the south-east USA and from Canada, although some may come from the UK (by rail) at a later date. The company estimates that its annual biomass requirement will be approximately 2.0 million t, which implies that it expects the chips to have an average energy content of about 13.5 GJ/t and a moisture content of 20-25%.
In nearby Newport, Nevis Power, a subsidiary of Welsh Power, has planning permission to build a 49.9 MWe biomass power station. Again, it is a dockside site and will receive feedstock by sea. The company estimates a requirement for 380,000 t/y of biomass, including energy crops, a figure which implies an intention to use green wood chips, possibly SRC.
On the opposite side of the Bristol Channel there are two projects near Bristol. Both are at a fairly early stage of development. Helius Energy has signed an option to lease a site in Avonmouth Dock, where it is proposing to construct a 100 MWe biomass power plant. Previously Helius initiated the 65 MWe project at Stallingborough in Lincolnshire which it sold last year to RWE Innogy, although Helius remains involved in the construction and start up of the plant.
At Portbury Dock on the other side of the River Avon, E.ON has taken an option on a site for a 150 MWe biomass power plant. The company has not yet decided to go ahead with the project; much is likely to depend on the development of government policy and the attractiveness of other investment opportunities. E.ON operates what is currently the UK’s largest dedicated biomass power plant (44 MWe) at Stephen’s Croft, near Lockerbie in Scotland. It has also received approval for a 25 MWe power station in Sheffield based on recovered wood.
At Tilbury, on the Thames estuary to the east of London, Express Energy is developing the Tilbury Green Power project to build a 60 MWe plant based on biomass and SRF (solid recovered fuel from the organic fraction of municipal waste). Woody biomass is expected to provide 50% of the plant’s energy input, implying a requirement for about 300,000 t/y of green wood chips. In the early years, 90% of the biomass will be imported from Europe and North America, but this percentage is expected to fall over time as UK sources are developed. Express Energy, which is partly owned by Cargill, has applied for Section 36 approval.
Finally in Scotland a consortium of DONG Energy and Peel Energy is proposing to build a 1.6 GWe coal and biomass power station on land next to the Hunterston nuclear power station on the Firth of Clyde. Acording to the initial plans, biomass in the form of wood pellets and chips would comprise at least 14% of the energy input, but there are reports that this could rise to 25% in the future. Assuming a 14% cofiring ratio implies a requirement for about 950,000 t/y of pellets or equivalent biomass. The Hunterston project is at a very early stage of development and, being predominantly a coal plant, it will doubtless be beset by environmental controversy. Although DONG and Peel say that the proposed power station will be ‘carbon capture ready’, recent statements by Mr Ed Milliband, the Secretary of State for Energy & Climate Change, suggest that the go-ahead may not be given until CCS technology is ready to be deployed.
Of course it is possible that some of these biomass projects will not proceed: in the current economic climate financing any project is problematical to say the least. However, there are known to be other projects under consideration which could replace any that fall by the wayside. The total capacity of the 12 projects profiled here amounts to 2.7 GWe, a figure which, given the renewable energy targets set by the government, is more likely to be an under-estimate than an over-estimate of the eventual outcome.
In the table on the previous page we have estimated the biomass requirements of each of the projects in millions of GJ/year. The total annual requirement of 206 million GJ greatly exceeds the availability of woody biomass in the UK, at least in the medium term, a fact which explains why all the projects are located in ports or close to the coast. The government’s strategy foresees the supply of an additional 1.0 million dry t/y of wood from UK forests by 2020 and the planting of 350,000 ha of perennial energy crops (yielding an average of, say, 10 t/y of dry matter per hectare). Together these new sources of woody biomass might yield about 80 million GJ/y of energy, but this is barely 40% of the requirements of just the 12 projects discussed here, before even starting to consider the UK’s requirements for renewable heat and eventually biofuels.
Clearly, if these projects go ahead – and we will be following them closely in future editions of Forest Energy Monitor – the UK will become a very major importer of biomass: 206 million GJ/y equates to about 12 million t/y of pellets or 20 million t/y of green woodchips, equivalent to the wood requirements of at least four world-scale pulp mills. Satisfying this demand will be a major opportunity, and a challenge, for the entire feedstock supply chain, from forest and plantation owners, to pellet producers, traders, shipping companies and port operators globally.
Note: 1. Assumes 8,000 operating hours/year. The generating efficiency in cofiring is assumed to be 40%, dropping to ~36-37% for the large dedicated biomass power plants and to 30% in sub-100MW plants. 2. Assumes 50% of Tilbury’s energy input is biomass. 3. Assumes 14% co-firing with biomass at Hunterston. Source: Hawkins Wright research
