Extracts from NATTA's journal
Renew, issue 159 Jan-Feb 2006

6. Green heat- AEAT says- 4.7%by 2020

An AEA Technology report for DTI/DEFRA, ‘Renewable Heat & Heat from Combined Heat & Power Plants- Study & Analysis,’ looks at the potential for earth energy heat pumps, solar thermal water heating, biomass, energy from waste, anaerobic digestion and landfill gas technologies. It indicates that ‘green heat’ from such sources could contribute an additional 6.0 TWh a year to the heat market by 2010, rising to 34.9 TWh/a in 2020- 4.7% of UK heating demand. That would avoid the release of 2 Mt of carbon equivalent per year, or 1.2% of current total UK carbon emissions.

This seems rather small, and it says that in fact an opportunity exists to supply a lot more- an additional 88.9 TWh a year by 2010, rising to 91.9 TWh by 2020 (12% of UK heat demand). But it says that constraints on market share and the rates at which markets can be penetrated reduce these levels.  It says that ‘The cost of supplying heat to the residential sector from renewable energy is high compared with the costs of heat from conventional sources, even when projected technology cost reductions to 2020 are included’. It put the cost by 2010 as up to £1,085 for biomass, £4,204 for solar, per tonne-equivalent of CO2 avoided, based on gas substitution. But it notes that ‘for the commercial and industrial sectors heat from biomass, EFW and anaerobic digestion are more competitive,’ with the cost by 2010 as low as £35/tonne of carbon for biomass for industry and £364/tonne for commercial users- for whom solar still remains high- at £3319/tonne.

The report recommends that DTI/Defra consider delivering support under a mechanism similar to the Renewables Obligation for green electricity. However, it says that given the high costs in the residential sector ‘it would be better to include renewable energy in this sector within schemes aiming to support low carbon measures in the residential and small scale commercial sectors on a technology neutral basis so that consumers could opt to install RE as one of a range of options, if they choose to’. 

Commenting on the problems of take up of green heat options, it talks of ‘a lack of awareness of the opportunity and confidence in the technology and commercial infrastructure’ and says that ‘to stimulate the market for heat from renewable energy, some continued financial incentive is required that to some extent insulates projects from fuel price volatility and creates a level playing field for heat as opposed to electricity producing projects’. It recommends government support of £5-20/MWh to produce ‘significant carbon savings at a relatively low cost’ in the commercial sector. The residential sector would need more- £50/MWh. It felt the support should be equivalent to that for electricity producing renewables, ‘so avoiding the current market distortion in favour of electricity generation’.

* The report also looks at the heat potential of combined heat & power systems, and concludes that the technical potential is for an additional 183 TWh a year, ‘though much of this is likely to be uneconomic to exploit’.

...but Biomass Task Force says- 7% by 2015

In its new report the Biomass Task Force concludes that fuel from forestry, crops and waste could reduce UK carbon emissions by almost three million tonnes a year if used to provide heating. It says that although renewables currently account for 1% of the heat market, with the package of support measures and actions they set out, ‘it should be possible to increase the renewables share of the heat market to 3% and 7% by 2010 and 2015’.

They recommend grant support to develop biomass heating at a cost of £10-20m p.a., and, on supply chain development, they propose a further round of the Bio-energy Infrastructure Scheme with funding of £3.5m. In addition, to promote green heat in the public sector, they suggest that each government Department, RDA, GO and local authority ‘should publish ambitious carbon targets for 2010 and 2020 for the use of renewable heat, electricity and CHP in its buildings, with the direct use of renewable energy being preferred to the indirect use of renewable energy by way of contracts with electricity suppliers. Targets should include schools, hospitals and other buildings in public ownership.’ 

They add ‘To ensure progress Ministers should detail the percentage of energy supply the Government expects will be developed from biomass by 2010 and 2020, while establishing the proportion that should come from the public and from the private sectors’.

Task Force chair Sir Ben Gill, said: ‘We estimate there could be 20 million tonnes of biomass available annually. Heat has been the forgotten part of the energy debate- enough waste heat is emitted from our power stations to heat the country one and a half times over- but our findings show that producing heat either alone or in CHP plants is by far the most efficient way of using biomass. There are many renewable sources of electricity but biomass is the only widely-available source of renewable heat. Heat generation accounts for 40% of our national energy consumption. At a time of rising oil prices, biomass heating is fast becoming an attractive economic option. And it is a cheaper way of cutting carbon emissions than many other options.’

The Task Force wants ‘a single capital grant scheme to grant aid all biomass heating boilers and the heat element of CHP biomass-fuelled plants. We propose that the grant be fixed at 40% of capital expenditure of the boiler or CHP equipment, including the associated infrastructure needed, for 5 years and that progress be reviewed after 4 years. This approach would yield rapid increases in activity. An alternative approach by way of a Renewable Heat Obligation has been suggested to us, but we consider the idea to be unworkable.’

Reactions

This conclusion was not well received. Friends of the Earth pointed out that the idea of a renewable heat obligation had been recommended by the Royal Commission and commanded a lot of support- it was included in a private members bill being introduced by Mark Lazarowicz MP. The Country Land and Business Association said: ‘The grants available for renewable heat have in the past been stop start, and cash limited. The Renewable Obligation provides a far better model, and has successfully increased private investment in the electricity sector.’  The Renewable Power Association added: ‘We have a market-based obligation for renewable electricity, and expect one for transport fuels to be announced shortly (it was -see below).  But renewable heat has been left out in the cold.’  The RPA wants a system of revenue-based support to create a level playing field with electricity.  Stewart Boyle from Wood Energy Ltd said: ‘Capital grants do help this sector, but they do not allow us to plan long term, as grants can be withdrawn as we have seen with Clear Skies. A Renewable Heat Obligation would allow serious long-term planning and development of this sector. The Task Force have rejected this option far too prematurely and based on little analysis.’

 However DTI Energy Minister Malcolm Wicks was clearly keen on grants: ‘We have already shown our commitment to biomass through the £66m Bioenergy Capital Grants’ but he said the DTI would examine the report “to see how we can further develop this technology for the future”. The Task Force asked for a response by June.

  Report:  http://www.defra.gov.uk/farm/acu/energy/biomass-taskforce/index.htm