Tag Archives: contracts
Government In Biomass Support U-turn, Says Renewable Energy Association
24 July 2013 | By Tom Kenning Dedicated new-build biomass facilities will not be eligible to claim subsidies under Contracts for Difference (CfDs), which will take over the Renewables Obligation (RO) in 2017. The Department of Energy and Climate Change (DECC) has confirmed this by publishing the Government’s draft Electricity Market Reform (EMR) delivery plan. “In the medium to long-term, new-build electricity-only biomass plants do not offer as cost effective a means of decarbonising the electricity grid as other renewable technologies,” DECC stated in the EMR consultation document. The Renewable Energy Association said it was disappointed in what it called a “misguided” U-turn on support for new-build biomass and urged the Government to reconsider. Biomass projects are already under pressure after the Government proposed capping incentives at 400MW under the RO in May. The REA estimates that there were already one gigawatt of projects at an advanced stage of development. After the cap, only 40% could then go ahead. As a result, an estimated 600MW of projects are likely to be cancelled. REA chief executive Gaynor Hartnell said that combined with the RO cap and the lack of a strike price for new build biomass, the absence of subsidies for new-build biomass under CfD “means support for this important technology has effectively come to an end.” She said: “Whilst it was wrong to cap the amount of new build biomass under the existing policy, until today project developers had the alternative option of a contract under the new policy. Today that option has been closed off. This is a U-turn. “It is misguided and it will halt the kind of bioenergy industry that environmental NGOs had previously wanted to see, for example one based on domestic forests, woody energy crops, agricultural residues and waste. This decision sends a terrible message to investors.” Instead of electricity-only new-build biomass power stations, options preferred by the Government are: coal-to-biomass converted power stations; co-firing with sustainable biomass; or dedicated biomass combined heat and power (CHP). A spokesperson for the REA told MRW: “This doesn’t work, especially as CHP plants need a user for the heat, and power plants tend to be located a distance from communities and businesses, so there is often no user for the heat.” Choosing between converting coal fired power stations to biomass and building new projects should not be an issue, because the two operate at different scales and both can play an important role, added Hartnell. Last week cost-effective renewable heat projects such as direct air heating from biomass were also put in danger by the Government’s decision to delay a critical announcement about subsidies from the Renewable Heat Incentive (RHI) until the autumn. Continue reading
Trees Best Left To Generate Carbon Credits
Taxpayers are losing money on native forest logging in NSW. It makes better financial sense for the native forests of southern NSW to remain un-logged and left to generate carbon credits, a new report suggests. NSW taxpayers would be able to generate carbon abatement, conservatively valued at about $222 million over the next 2½ decades, and use some of the money to fully compensate timber companies, according to the analysis by think tank The Australia Institute. The NSW government disagrees, saying the report is based on an unrealistically high carbon price. Cut carbon not trees. Photo: Michele Mossop Taxpayers are presently losing money on native forest logging. ”Stopping harvesting and using the native forests of the Southern Forestry Region to generate carbon credits offers a viable alternative to commercial forestry,” the report said, citing public data about the profitability of all current logging operations, government subsidies, and company tax received from logging corporations. The NSW government has reviewed the report, but said it used incorrect assumptions. “One such error identified is the assumed net financial benefits from carbon sale quoted at $222 million,” a spokeswoman for Primary Industries Minister Katrina Hodgkinson said. ”This estimate is over-inflated and based on a carbon price of $9 increasing at 2.5 per cent real from 2015, where in reality the carbon price is likely to be around $5 flat.” While most sawmillers turn small profits, the industry overall loses money, and the losses are largely borne by the government-run Forestry Corporation of NSW. The details of their contracts remain commercial-in-confidence, but net losses via subsidies between now and 2033 are estimated to be about $77 million. ”Under current and likely future market conditions, the harvesting and processing of native logs in the Southern Forestry Region is likely to generate substantial losses, and the aggregate net financial benefits are likely to be significantly higher if commercial harvesting is stopped and the native forests … are used to generate carbon credits,” the report said. The main glitch in the proposal is that native forestry logging operations are not yet eligible to generate carbon credits under the federal government’s Carbon Farming Initiative. However, both the government and the federal opposition have said they intend to expand the scheme soon. ”The growth in eucalypt plantations has been massive, and these are now coming online and muscling in on native forest logging,” said the report’s co-author, Andrew MacIntosh, associate director of the Centre for Climate Law and Policy at the Australian National University. Read more: http://www.smh.com.a…l#ixzz2Ye9Nl6LU Continue reading
Finding a Niche in Pellets
Last month, I was talking to Ontario Power Generation’s Director of Business Development Brent Boyko about the conversion of Atikokan Generating Station (from coal to wood pellets) and he mentioned that part of the wood pellets that will fuel the AGS plant after its conversion will come from Rentech Inc. Turns out, they have acquired Georgia-based Fulghum Fibers, the leading provider of contract wood chip processing services in the U.S. Fulghum has a total of 32 mills, 26 in the U.S. and six in South America, that process 15 million metric tons of wood and bark annually. A notice released from the company discusses how the acquisition provides a platform to launch into the growing and complementary global wood pellet industry. With the acquisition, it has also entered a joint venture with Graanul Invest, a European pellet producer, for development and construction of U.S. pellet plants. Graanul has designed, built, and operates six pellet facilities in Europe, which produce 830,000 tons of pellets annually. I think the stories you will find in this month’s Pellet Mill Monthly newsletter—as well as in the Q2 issue of Pellet Mill Magazine , which is just around the corner—further back that assertion up. Continue reading
