British coal plants are converting to biomass with no certain climate benefit

A British Government policy change is causing coal plants to convert to burning biomass, fueling a huge increase in wood pellet exports from North America. But a new review of biofuels' impact has cast doubt on their ability to tackle climate change.

Around one-third of the EU bioenergy share in 2020 is projected to come from wood biomass from forests and woods, according to EU states’ National Renewable Energy Action Plans.

But there is a significant time lag between the carbon debt created when trees are cut down to be burned for energy, and the carbon reductions that fully grown replacement trees will bring, according to a report from the Institute for European Environmental Policy (IEEP).

“It is not currently possible to define the emissions profile and savings associated with Europe’s expanding use of biomass for energy, nor is there any policy process currently in place to secure this,” the IEEP report says.

“As a consequence, at present there is only the certainty of commitment to bioenergy use up to 2020, but no associated guarantee of emission reduction.”

The IEEP paper cites several studies to show that boosting bioenergy supplies with increased forest management would only achieve around 20% of the anticipated greenhouse gas savings in a 50-year period.

American imports rise

The European policy is boosting exports of wood pellets from North America. American export volumes are forecast to increase from an estimated 1.5 million tons in 2012 to 5.7 million tons in 2015, according to the North American Wood Fiber Review.

Total Canadian exports to Europe in the second quarter of this year rose 14% from the first quarter, with reports of British Colombian pellet plants running at full capacity thanks to European demand.

Biomass-burning plants in the UK import most of their fuel, mostly from North America, which increases their carbon impact from transportation.

While in 2010-11, 13% of biomass burnt in British power stations was home-grown, this fell to 8.6% in the last financial year.

Meanwhile the amount imported grew, from 840,250 tonnes in 2010-11 to 1,086,880 in 2011-12, an increase of 23%.

Drax, based in Selby, North Yorkshire, is the main importer of biomass for this purpose, and is about to become a much bigger customer.

It has just raised £190 million to convert three of its six generating units exclusively to burning biomass instead of coal. The cost of this conversion is staggering: up to £700 million. It is being additionally financed by £230 million of cash, a £100 million loan and bank credit of £400 million.

Half of this money will not be spent in this country. It will be spent in upgrading port facilities and new wood pellet plants in North America.

Several new Canadian pellet facilities, such as Holbrook Forest Products in Roddickton, Newfoundland, have expressed their intentions to export pellets via these new port facilities.

Drax has used a financial technique called hedging to presell its power output to 2014. It issued an interim statement yesterday saying: "We have taken advantage of better dark green spreads since [2012] to strengthen our contracted position, including additional power sales of 3.5TWh and 2.9TWh for 2013 and 2014 respectively".

DECC's preference for conversion

Its incentive to make the conversion is the decision, announced in September in the banding review for the Renewables Obligation Certificates, that the more biomass is consumed in a given plant, the more support it is given. Electricity generated by a unit using 100% biomass will receive 1 ROC.

In addition, DECC's review came down on explicitly supporting co-firing and coal conversion to biomass, as opposed to new biomass plants, and a consultation on a cap on dedicated biomass ROCs.

It is also likely that dedicated biomass projects will be excluded from the new capacity mechanism in the Energy Bill.

This decision caused Centrica Energy, to announce on Wednesday that it will not be proceeding with planning applications to develop dedicated biomass power stations at Roosecote in Barrow-in-Furness and at Glanford Brigg in North Lincolnshire.

Centrica Energy had proposed to build a new 80MW biomass power station on the site of its existing Roosecote gas-fired power station, and a 137MW biomass power station adjacent to its existing gas-fired power station at Brigg.

Others are not deterred, however. MGT Power announced this week that it will build a new 300 MW biomass power station at Teespor, at an estimated cost of £500 million.

Eggborough Power aims to convert all four units at its 2GW coal-fired plant to biomass. These would consume over 15 million tonnes per year of wood pellets if all units underwent conversion. The vast majority of these will be imported.

One port through which biomass imports come from North America is Immingham. It said on 15 October that it expects to handle 8 million tonnes of biomass in 2020, up from 62,000 tonnes in 2011.

The port discharged a 46,000 tonne wood pellet cargo in August, which was delivered to a large Aire Valley coal station. It expects to see further deliveries this year.

Several developers are deciding whether to build biomass plants close to the port.

Attempts are being made to address the lag in the intended greenhouse gas emission-curbing benefit of burning trees for electricity.

In August, the American state of Massachusetts implemented a regulation that biomass can only now be sourced from residues and thinning trees, taking into account soil productivity and protection of biodiversity and natural habitats.

Biomass units must also show that they emit at least 50% less greenhouse gases than fossil fuels, while efficiency requirements, operating certificates, and verification procedures are also imposed.

A DECC spokesman said that it will be consulting soon on setting caps on the carbon impact of biomass plants.

European climate policy in disarray as carbon crashes

An ineffective record low price for carbon, the dilution of energy efficiency targets, and failure to agree on which nations should have seats at a UN meeting are contributing to an impression that Europe can no longer lead the world on climate change policy.

1. Carbon price collapse

On Monday, the price of carbon fell to an all-time low following the release of new figures showing lower than expected greenhouse gas emissions last year from the 12,000-plus facilities registered under the EU Emissions Trading Scheme.

1.7 billion tonnes were emitted in 2011, down 2.45% on the previous year, compared with a total allocation of 1.63 billion tons. Combined with a surplus the previous year due to over-allocation, there is now an accrued total surplus above the current ETS carbon budget of 355 million allowances, including auctions.

The highest emitting manufacturing sectors, steel and cement, have amassed the largest of these surpluses, amounting to 279 million and 195 million credits each.

In the UK, the largest single emitter is still the Drax coal-fired power station, at over 21.47 million tonnes, well over its allocation of 9.5 million tonnes.

As a result of the market glut, allowances are currently trading at €6.39, which represents a 61% fall in the price over the last year. Most analysts now agree that the European carbon market will be oversupplied up to at least 2020, without intervention.

Observers renewed their calls for urgent action by European lawmakers to set aside a number of permits to bolster the market, but this was still seen as unlikely.

“Unless EU governments come up with a surprise decision to strongly support the set-aside or ambitious mid-term emission- reduction targets, I don’t see prices moving up much over the coming months,” Tuomas Rautanen, head of regulatory affairs and consulting at carbon asset management company First Climate.

Damien Morris, Senior Policy Adviser from the climate campaign group Sandbag said: "The window is rapidly closing to fix the ETS before the next trading period commences in 2013". He said it was therefore "imperative that the European Council move swiftly ... to withdraw ETS allowances.”

But Per Lekander, UBS’ global head of utilities research, said that prices would probably have to fall about €3 before European legislators would act.

2. Compromised energy efficiency targets

The latest proposed draft from Denmark on the Energy Efficiency Directive contains further weaknesses following previous drafts which failed to attract universal approval.

As a result, the Coalition for Energy Savings estimates that it would close as little as one third of the gap to Europe's 20% energy saving target for 2020.

The new draft rejects MEP's requests for binding national targets and weakens nearly all the binding measures in previous drafts, including:

• requirements to renovate public buildings
• long-term targets for cutting energy use of the European building stock
• national end-use saving targets, which would result in no genuine improvement or even standards lower than those in the Energy Services Directive which the EED will replace
• targets for the public procurement of more efficient combined heat and power generation.

Ambassadors are meeting today to try and agree on a negotiating position in preparation for discussions in the European Parliament on 11th of April.

Stefan Scheuer, Secretary General of the Coalition, accused the Council of "a lack of responsibility in light of the energy challenges Europe is facing".

"Exploding energy costs, high unemployment and a slow economic recovery call for urgent investment in energy efficiency within Europe rather than spending money on energy imports", he said.

"Member States need to focus less on finding ways to wriggle out of taking action and more on how to agree on effective legislation."

3. Squabbling over Climate Fund

Finally, at the end of last week, European ambassadors failed to agree on who should have a seat on a committee which will negotiate directly with developed countries about the allocation of funds to help them fight climate change, which meant that now none of them will take part.

They had until 31 March to reach agreement on the allocation of seats between member states on the UN Framework Convention on Climate Change’s Green Climate Fund (GCF), but couldn't do so.

Thirteen of the 27 member states wanted a seat to ensure they had a say in the funding decisions of the $100 billion Green Climate Fund, that was agreed at Cancun in 2010.

Britain, France, and Germany were lobbying for a permanent seat in addition to an alternating seat that each would share with another country. But this idea was apparently stonewalled by Germany and Poland, who both demanded exclusively non-rotational seats, according to an anonymous source.

“(The Commission) has tried to rob us so many times before,” a Polish government source told Reuters. “This time around we want to wear a second jacket - just in case - and let nothing we are eligible for miss us.”

Members of the European bloc will now have to negotiate directly with other developed countries to determine the makeup of the governing board.

“Despite willingness to compromise and adequately share board seats, it has, unfortunately, not been possible to come to an agreement within the EU,” said Danish presidency spokesman Jakob Alvi.

“It shows that the EU unity we had in Durban has been eroded and that could damage Europe’s image in global climate change talks.”

Coal-addicted Poland is particularly to blame for Europe's collective failure to agree both on the energy efficiency standards and this issue. It also recently succeeded in vetoing Brussels’ carbon reduction roadmap.

All these developments give an impression elsewhere of a waning of Europe's confidence in leading the world on fighting climate change.

This corresponds to an increased assertiveness in climate change discussions amongst the richer developing countries, especially Brazil, India and China, and to a lesser extent other South American and African nations. But that is far from a guarantee of effective action.

899MW of newly approved biomass plants could increase carbon emissions

Last week DECC approved construction of a new 299MW biomass-burning plant owned by Anglesey Aluminium Metal Renewables. But new opinion from the Scientific Committee of the European Environment Agency (EEA) says plants like this will not be carbon-neutral and may even result in increased carbon emissions.

The proposed plant will employ up to 600 people during construction and around 100 full-time personnel when operational, and the company says its feedstock will be sourced from both imported and local sources - perhaps forests in Wales - with imports coming in through the Port of Holyhead.

This approach for sourcing fuel is identical to that being followed by Drax, which was given consent for 580MW of biomass-fuelled plant in the north-east six weeks ago.

Both are awaiting final go-ahead for construction when the results of the Government's review of the Renewable Obligation Certification (ROC) incentive scheme are announced, expected next month.

The EEA's report, however, says that biomass - fuels of plant origin like trees - should not be considered carbon neutral because this "fails to recognize that if bioenergy were not produced, land would typically grow plants anyway, and those plants would continue to absorb carbon and help to reduce carbon in the air".

The report calls it "double-counting to credit bioenergy for reducing carbon in the atmosphere through plant growth" because "plants would grow and absorb that carbon anyway".

The opinion derives from peer-reviewed articles published in Science magazine by a Princeton University researcher, Tim Searchinger.

The explanation for the opinion is given by a thought experiment: "imagine a hectare of cropland just abandoned and allowed to reforest. These growing plants would absorb carbon from the atmosphere into plant biomass." Some of that would be consumed and the carbon released by organisms into the atmosphere.

"Other carbon would be stored in vegetation and soils as the forest grows, and that ... would have the effect of offsetting some of the emissions of carbon by burning fossil fuels."

"However, if, instead of allowing the forest to grow, the land were used to grow energy crops which were burned in an electric power plant, their use would displace fossil fuel emissions, but the actual CO2 emitted by the power plant chimneys would not be reduced.

"Per unit of energy, the CO2 emissions would typically even be higher than those of a fossil fuel-burning power plant because biomass contains less energy per unit of carbon than petroleum products or natural gas and because biomass is usually burned with a lower efficiency than fossil fuels," the paper concludes.

In other words, using land to grow bioenergy crops sacrifices the use of the land to absorb and sequester carbon.

The CO2 released from the plant could only be counted as carbon-neutral if or when the carbon absorbed by the energy crops and burned in the power plant exceeded that which would otherwise be absorbed and sequestered by the growing forest.

This opinion has been questioned by Marlene Holzner, spokeswoman for EU Energy Commissioner Günther Oettinger, who cited another report compiled by Econometrica which says Searchinger did not compare CO2 emissions from biofuels to those from petrol.

The scientist himself has disagreed, saying,"The whole point of the analysis was to make that comparison – detail for detail. Biofuels will not reduce emissions, and may increase them."

Recent reports by the EU's Joint Research Centre JRC and the International Food Policy Research Institute (IFPRI) have also concluded that the burning of biofuels can increase CO2 output.

The EEA's opinion document does give examples of three scenarios where biofuels may reduce carbon emissions and not displace food crops:

1. when bioenergy crops are planted on lands once covered with tropical forests that have been overrun by invasive grasses that frequently burn


2. wastes that would otherwise be disposed of and allowed to decompose, emitting methane


3. crop residues that would otherwise be burned. However, care must be taken to ensure that this loss of residues does not lead to reduced productivity and therefore reduced plant growth or reduced carbon sequestration in soils.

Furthermore, the document says that accounting must reflect any increases in GHG emission from fertiliser production required to replace the nutrients from the residues.

How does this affect the approved new UK biomass burning stations?

DECC's consenting letter says the plant may burn “biomass fuel feedstocks” that are defined as "fuel, excluding material which is, or is derived directly or indirectly from animal matter, which qualifies as 'biomass' under Article 4 of the Renewables Obligation Order 2009 (S.I. 2009 No. 785)".

This Article only defines biomass as material of which "at least 90 per cent of its energy content is derived...directly or indirectly from plant matter, animal matter, fungi or algae)".

This definition is incredibly broad. Therefore, in the absence of any other conditions, it is likely that timber from managed forests will be used as one of very few feedstocks that can be reliably and consistently sourced at the volume required by such large plants.

In this case, if Searchinger is right, overall carbon emissions resulting from the plants could well actually increase.

Anglesey Aluminium Metal Renewables is owned by Anglesey Aluminium Metal Ltd, which itself is jointly owned by Rio Tinto (51%) and Kaiser Aluminum & Chemical Corporation (49%).

No one from Anglesey Aluminium Metal Ltd was able to comment at this stage over the exact sources for the fuel for the proposed plants.

Anglesey Aluminium Metal used to run an aluminium smelting operation. This obtained its energy needs from the neighbouring old Wylfa Magnox nuclear power plants - two 490 MW reactors - Wales' only nuclear power plants, which are due for closure next near.

The smelting plant closed down itself on 30 September 2009 with the loss of many jobs.

But Wylfa is one of eight sites the Government considers suitable for future nuclear power stations. Horizon Nuclear Power, an E.ON and RWE joint venture, has said it intends to build about 3,000 MWe of new nuclear plant next to the old plants.