Connecting the Future - Greenpeace UK

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Connecting the future: the UK’s renewable energy strategy Sustainable energy systems 42 Band Technologies Support (ROC/MWh) Established 1 Established 2 Reference Post-demonstration Emerging Landfill Sewage gas; co-firing of non-energy-crop biomass Onshore wind [1]; hydro; energy from waste with CHP; co-firing of energy crops; geopressure Offshore wind; dedicated regular biomass Wave and tidal stream; anaerobic digestion, pyrolysis and gasification; dedicated biomass burning energy crops; dedicated biomass with CHP; photovoltaics; geothermal; tidal impoundment (tidal lagoons and barrages)
Connecting the future: the UK’s renewable energy strategy Sustainable energy systems 43 of ROC price. If it is too low, then the technology will not be deployed. A key criterion for the success of the RO should not simply be whether or not the target is reached, but how effective it is in encouraging the broad portfolio of renewable technologies that will be necessary to bring about a long term decarbonisation of the UK energy system. It is therefore imperative that the ROC banding results in a balanced renewable mix while meeting the quotas outlined as part of the obligation. The RO’s failure so far either to meet its annual renewables targets or to encourage a diverse set of technologies has arisen because of the lack of long-term certainty about ROC prices, which increases developers’ uncertainty regarding risky new technologies. Banding may well succeed in encouraging development of certain technologies by guaranteeing a reasonable value for ROCs and so decreasing that uncertainty. However, the other shortcomings of the RO will remain: although there may well be higher returns for technologies in the emerging technologies bands, the more certain returns will still come from the established technologies which generate at lower cost and benefit from relatively high levels of experience. Certainty is a key factor in a competitive electricity market like the UK’s. So even if the banding is set at the appropriate levels, while the reformed RO may drive more investment in new renewables technologies, the most established and therefore least risky technologies – such as onshore wind - may well dominate despite the banding of the RO. The burning of biomass fuels in coal plants (co-firing) has been allowed under the RO, although there is currently a cap of 10% on the proportion of any supplier’s obligation that can be met through co-firing. This reflects concerns that the practice might extend the life of existing coal plants and provide coal generators with additional income from ROCs without having to make any significant capital expenditure to merit it. In addition, much of the fuel used for co-firing is imported, and can therefore entail transport related CO2 emissions, particularly given that the largest proportion of biomass used in co-firing in 2005 came from Indonesia and Asia (see Table 4.3). The 2007 review of the RO proposes removing the 10% cap on co-firing, on the grounds that an increase in co-firing will mitigate carbon emissions from coal plants that would be operating irrespective of whether they were using coal or biomass. However, under the same proposals co-firing will only be eligible for a reduced ROC level (0.25 ROC/MWh). These arrangements will be reviewed if co-firing ROCs make up more than 10% of the total RO; however, given that a generator will now have to generate 4MWh for every ROC earned, this will allow a considerable expansion of biomass co-firing before a review is triggered, provided it continues to be an economic option. 14 Whether this is desirable is arguable, however: on the one hand, these new arrangements may encourage the emergence of viable biomass supply chains in the UK - domestically sourced, sustainably produced biomass. On the other hand, the most efficient use of limited sustainable biomass resources is in dedicated biomass combined heat and power (CHP) generators, rather than inefficient coal fired power stations, producing electricity but wasting the heat. 14 There is now a clear distinction between general biomass and energy crops, which are defined as plant crops planted after 1989 grown primarily for the purpose of being used as a fuel, or which are miscanthus, shortrotation coppice willow or poplar. Energy crops will not be subject to the 10% co-firing trigger, and will have a higher level of ROC. This reflects the government’s aim of encouraging a viable and sustainable domestic energy crop supply chain.
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Connecting the Future - Greenpeace UK

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