As I write we have just received the results of the Contracts for Difference (CFD) auction round for sustainable energy projects and it is clear that offshore wind projects have gained a significant amount of support for the new generation of deeper water, larger generation stations. By 2023 3.2GW of new generation capacity will be operating off the shores of the UK. What has also gained attention in this morning’s press is that the clearing price, at which the auction for this capacity was won, is a mere £57.50/MWh for delivery in 2022/23. This is a remarkable feat for an industry that only a few years ago was considered by many to be an expensive folly.
This is great news for the UK energy industry and for the offshore construction industry in general and it ensures an ongoing effective decarbonisation of the UK power portfolio. But alongside the 3.2GW of offshore wind is also a further 64MW of waste to energy utilising Advanced Conversation Technologies and 86MW of dedicated biomass with chp (combined heat and power). The CFD round supports projects from Pot 2 – the ‘less established’ technologies which includes these technologies along with Anaerobic Digestion (AD). While the progress of development of offshore wind is truly remarkable, it is also worth noting the opportunity for economic and social development presented by these thermal technologies.
Bioenergy in all of its forms is the only renewable energy source currently economically available in the UK that can provide reliable base load power. Variable sources of power production can create a need for balancing power to be provided to the grid at considerable expense and technical complexity. This is one of the main criticisms of renewable power picked on by critics as a reason to doubt its effectiveness and economic viability. Bioenergy on the other hand is entirely schedulable and can itself be used to balance the network. Further, bioenergy is not limited to locations where natural sources of power such as wind-, solar-, or hydro-energy exist. Biomass is an energy carrier in the same way that coal is and power can be provided where it is wanted and stored until it is wanted. This makes bioenergy ideal for on-site generation providing off grid energy solutions for energy intensive users. This is particularly the case when CHP solutions can be offered, providing both heat and power to customers.
Bioenergy feeds numerous value chains: the production and procurement of fuel is an industry in itself, creating economic value and wealth. Bioenergy is providing a market for waste wood at a time when the paper and pulp industries are in decline. Forestry needs management if it is to be an effective means of sequestering carbon. Derelict, unmanaged woodlands may produce as much greenhouse gases and they absorb, worse still, rotting forestry may produce complex hydrocarbons such as methane gas, a much worse greenhouse gas than CO2, whereas well managed, worked forests absorb carbon effectively balancing the use of biomass in energy production. The use of agricultural residues provides valuable additional income streams for farming, an industry that is continually under economic pressure in global markets and even more so in the UK now we are leaving the EU.
Bioenergy-based power production creates far greater sources of employment than variable sources of sustainable power particularly in the operational phase. A 40MW biomass power plant will provide direct employment for 30 to 40 staff on site working in shifts and support hundreds more indirectly in service industries and fuel production.
There is a growing consensus for the need of a ‘Circular Economy’, an initiative to provide sustainability to local and national economies, ensuring that resources are used and reused effectively. Bioenergy fits perfectly within the circle of sustainability, adding value to end-of-life materials, reducing the uptake of virgin materials and reducing waste. The UK, for instance, has been exporting significant tonnages of refuse-derived fuel to continental Europe to avoid landfilling at home. This material has clear economic value. It is somewhat ironic that this trade is also now uncertain given the ongoing Brexit trade discussions, yet it can create a valuable source of energy in the UK as a clear manifestation of the Circular Economy.
A modern bioenergy plant is a clean, wealth creating, employment providing source of energy that supports local industry and national power systems while contributing to the mitigation of climate change and reducing waste. There is no doubt that, while the CFD round will undoubtedly spell good news for the offshore wind industry, investors, policy makers and the wider sector may find advantage paid more attention to the added value and opportunities for wealth generation of bioenergy.
By Peter Dickson, Technical Partner at Glennmont Partners.
January 31, 2023
December 14, 2022