Renew On Line (UK) 46

3. More  support for Energy Crops

It’s not all doom and gloom in the energy crops world. Although the ARBRE issue still casts shadows (see Renew 145), progress is being made on building up the fuel supply chain.  DEFRA, the Department for Environment, Food and Rural Affairs is planning to provide £3.5 m to support biomass suppliers.

The Bio Energy Infrastructure Scheme aims to plug a funding gap in developing the supply chain for bio fuels. According to Defra, the existing establishment grants scheme provided grants for willow growers, but because it was set up under the EU’s rural development legislation for forest growers, it did not cover potential grass-based fuels like miscanthus or residue sources like forestry waste, straw, sawmill waste and so on. The new scheme  covers all these sources and in Scotland, Wales and N. Ireland (where the willow scheme does not operate) it will include willow. Grants will be available for up to 50% of the cost of establishing a new energy fuels business or diversifying into it, including legal costs, office accommodation, IT and some equipment and salary costs. The first round of bids has already taken place and successful bidders should be notified in early 2004. If sufficient funds are left, there may be a second round.

CAP reform and SRC

The longer term prospect for energy crops are also not too bad. The recently proposed reforms of the EU’s Common Agricultural Policy aim to decouple the subsidies paid to farmers from the crops they grow: they will simply be paid by area and can choose which crops they feel is best. However that could have meant that energy crops would lose out to so-called ‘permanent crops’, including short-rotation coppice, which could not be grown in this decoupled area. At the same time set-aside land would be entirely set aside, instead of being available for non-food crops (including fuel crops) as at present. Fortunately, as Earthed (July) reported, pressure to change the proposals were successful and biomass growers won two important changes. ‘First, set-aside would remain available for non-food crops, including fuel crops.  Second, SRC and miscanthus were designated as honorary non-permanent crops, allowing them to be grown in decoupled areas and making them eligible for a £45/ha annual carbon credit payment. That payment is subject to a maximum area of 1.5 m ha across Europe.’ The CPA reform is due to take effect in 2005, although countries can delay implementation for up to two years.

* See Jonathan Scurlocks review of the biofuels for vehicles issue in our Technology section .

RO adjusted for Biomass

New moves to encourage the greater use of biomass-powered generators were outlined by Energy Minister Stephen Timms in August. The proposals- published in a consultation document “Technical Review of the Renewables Obligation”- will mainly benefit farmers who grow energy crops and co-firing power stations, those which burn a combination of biomass and fossil fuels. The new support for co-firing with fossil fuels may not go down too well with some environmental groups- it has been one reason why some local projects have been resisted.  However in his introduction to the consultation, Timms says that the new proposals limit and progressively reduce the scale of co-firing, so as to avoid flooding the Renewable Obligation Certificates (ROC) market system- with fossil fuel enabled ROC’s! 

....and for small renewable projects

The Government also plans to allow small generators, like households or community buildings with solar panels or wind turbines, to benefit from the ROC’s market. Currently generators only qualify for certificates if they produce at least 0.5 MWh in a month. But it is proposed that, in future, smaller generators, who do not produce this much surplus in a month, will be awarded certificates based on their yearly output. Although the financial benefit may be modest, Timms said he felt that it would ‘send a clear signal to small generators that they are part of the renewables family’.

Overall he saw the proposed adjustments to the RO as providing “a significant boost for green fuel and the whole renewable energy market. Power generators and farmers now will have greater certainty when investing in energy crops as a fuel source. And even the smallest generator will also be able to benefit from the renewables revolution.”

A full review of the Renewables Obligation will begin in 2005/6 after the system has had time to develop and adjust to the impact of the European Emission Trading scheme, which begins in January 2005.

* The RO consultation runs until 21 Nov. The consultation document is at: www.dti.gov.uk/energy. Comments can be emailed to info@trro@dti.gsi.gov.uk.  There are certainly lots of issues e.g. is it wise to allow a bit of fossil fuel in to boost biomass ? And what about the possibility that municipal waste might also be allowed in?