Forty two new landfill gas projects were contracted for, this being seen as the cheapest option, but thirty one new wind farm projects were also supported, with the cost of electricity from wind in some locations (especially those in Scotland) having begun to converge with conventional generation costs: some projects were contracted at 3.98p/kWh. In part this was due to technical and operational improvements, but the removal of the 1998 deadline had obviously also helped.
It also made possible the inclusion of three energy crop projects, involving some 20,000 acres of Short Rotation Coppicing, even if would cost a minimum of 8.45p/kWh to generate electricty from the new wood-gasification and gas combustion plants that the NFFO also supported. However, surprisingly there were no SRC projects in Scotland.
Even so, with two more NFFO orders expected, the 1500MW DNC target could thus well be overtaken. The prognosis therefore looks fairly good, even if there could still obviously be problems: for example not all the projects contracted for will be successful eg in terms of obtaining planning permission.. Thus the DTI indicated, in the announcement of the third NFFO, that it might in practice only deliver between 300-400MW, which was the original range expected for the third NFFO, with, for example only 20 or so windfarms actually being built.. Adjustments will be made as necessary to the next NFFO rounds to compensate for any shortfall or over run.
Clearly they are being more cautious this time. Certainly there had been some failure in the previous rounds. Overall, by Sept 1994 , 141 projects out of the 197 contracted for under the first two NFFO rounds were operational , (320MW out of the total of 624 MW contracted for), but several of the waste combustion plants and some of the wind farm projects had met with local planning problems. By Sept 1994 only 72 MW out of the 311MW of waste combustion plants capacity contracted for was operating, and only 31MW out of the 96MW of wind turbine capacity was in place. The removal of the 1998 deadline should however assist the next wave of projects, for example enabling wind farm developers to trade off economic return with environmental sensitivity more easily.
The Energy Crops commitment is quite small:even so, OFFER's warning about the high price of Short Rotation Coppicing, had evidently had only a limited effect:the three accepted SRC projects have an average price of 8.65p/kW as against the average price for this round of 4.35p/kWh. Biomass gasification, according to the DTI press release 'offers the prospect of significant economies of scale' and that ' the time is now ripe' for it, and SRC, to get NFFO support. However it was admitted that 'the commercial exploitation of coppicing will require substantial reductions in costs through experience and optimisation of both the fuel supply chain and the conversion technology' The Governemnt had allocated an extra £500,000 to the Forestry Commisiion for SRC field trials..
A 20MW 'small wind' sub tranche was also included in the new NFFO,for projects of less than 1.6MW, including community based projects, as a commitment to diversity of scale and of companies.The new Wind Fund Trust scheme (see Renew 94) was seen as one possible source of extra capital.
Details of specific projects emerged subsequently: National Wind Power did very well,with 10 wind farm projects in England and Wales and five in Scotland. Ecogen however only got one project -in Scotland. See Renew 94 for details of the various projects.
The new NFFO contracts are set to run from April1st 1995 until 31 March 2014 .
With the exception of worries by some environmentalist about the 20 municiple waste combustion plants, the new NFFO has been welcomed. even if it did turn down a vat number of bids. There had after all been 2500MW of capacity on offer..
Extracted from Renew 93, Jan/Feb 1995
EERU Home page