UK Biomass as Fuel Stobart Biomass Products Ltd (SBPL)

Transcription

1 Piers Harden 2012

2 UK Biomass as Fuel Stobart Biomass Products Ltd (SBPL) SBPL Established in March Originally a Joint Venture between Stobart Group and A W Jenkinson Forest Products Ltd. it is now owned 100% by Stobart Group FTSE 250 company. Stobart Biomass Products Limited was created to meet the current and future demand of the UK and European biomass markets SBPL acts as a central consolidator as well as producer, specialising in sourcing and distributing biomass to customers in the form of processed recycled waste woods, virgin chip derived from forestry and RDF from municipal waste streams on a long term contractual basis SBPL took over AHS Energy in June 2010 UK contracts secured with Iggesund Workington and Helius CoRDe for over 250,000 tonnes in total

3 SBPL in 2012 SBPL currently supplies over 150,000 tonnes of forestry woodchip per annum into UK Biomass power stations on 3-10 year contracts. SBPL already supplies 100,000 tonnes of RCF into Belgium. SBPL supplies 400,000 tonnes of low grade RCF by ship into European biomass plants on long term contracts. First RDF shipments starting December 2011 to Sweden and Denmark which should reach over 100,000 tonnes in SBPL operates port facilities at Avonmouth, Shoreham, Hull, Cardiff, Liverpool, London and Plymouth plus processing at Selby. In Addition to supplying waste wood and virgin fibre, SBPL started supplying RDF (refuse derived fuel) and TDF (tyre derived fuel) in 2011.

4 SBPL UK Enquiries Category Summary ( 000 tonnes) Contract Type Virgin RCF Active In Negotiations 5404* Small Scale Total Dormant * Imported wood enquiries over 50% of this for port CHP plants RDF

5 UK Biomass as Fuel The Challenges - The Market Biomass WID Market new to all players in UK Creation UK Market; Delays in ROC and RHI Announcements - Large Scale - Small Scale European developments changing flows Alternative renewable energy solutions European market price variances

6 UK Biomass as Fuel The Challenges The Materials Existing market quality requirements - Waste wood: A, B or C - RDF; calorific, size - Virgin; moisture, size - Logistics to support New materials to the market Infrastructure development Volumes and Sustainability criteria

7 UK Biomass as Fuel. Future Demand for Woody Biomass in UK SPBL are currently dealing with enquiries for over 20m tonnes of woody biomass sourced from within UK. Planning applications for coastal developments indicate demand for imported biomass exceed 25m tonnes. = Total potential demand exceeds 40m tonnes. The preference is for virgin wood ( non WID ), but many projects are unspecific about the type of biomass required. Blending will be increasingly common. As woody biomass is committed, the trend is for flexibility towards waste based fuels.

8 UK Biomass as Fuel. Current Biomass Prices (moisture content as delivered). Current spot market delivered prices for UK biomass products * Virgin sawmills wood chips tonne Arboricultural wood chips tonne Grade C recycled wood tonne (* Depends on specification, location, haulage costs, volume, timing etc.) Long-term contract delivered prices for UK biomass products^ Virgin sawmills wood chips tonne Grade C recycled wood tonne Arboricultural wood chips tonne + (*Depends on long term price risks, penalty clauses, indexing etc. as well as volumes, competition specification, location, haulage costs, volume, timing etc.)

9 UK Biomass as Fuel. Sustainability (This presentation was written before the conclusion of the Statutory Consultation on the Renewables Obligation Order 2011) The EU Renewable Energy Directive (RED) requires sustainability criteria to be applied to Biomass as a condition of eligibility for RO support from 2013, as follows: must result in a greenhouse gas emissions saving of 60% compared with fossil fuels must not be made from: raw material obtained from land with a high biodiversity value; from raw material obtained from land with high carbon stock; raw material obtained from land that was peatland in January 2008, unless cultivation of the material does not involve draining previously undrained soil.

10 UK Biomass as Fuel. Sustainability Continued However, biomass manufactured from wastes and residues is excluded. The information on sustainability submitted by operators must be independently audited at least every year. Operators will also have to continue reporting to Ofgem on additional information relating to sustainability criteria, as they already do under the 2009 ROO. Imported biomass is likely to be subject to greater scrutiny issues such as tropical rain forest destruction, indigenous peoples, shipping distances etc.

11 Renewable Heat Incentive (RHI) for Biomass Heating; Summary The RHI was introduced on Monday 28 th November 2011 as an incentive to use biomass (wood fuelled) boilers and other renewable heat technologies for non domestic biomass installations. The first phase of the RHI is targeted at commercial, industrial and domestic community heating projects. Tariffs will be paid to the owner of eligible non-domestic biomass installations at agreed rates and the heat must be metered. It s been a long road since the REA led the campaign to have the legal powers for the RHI added to the Energy Act 2008 Total value of first phase of the RHI is 860m

12 Renewable Obligation Certificates The banding for the rocs has been extended to 2017 with some changes *For example Dedicated biomass Current: 1.5 ROCs/MWh Proposed changes: 1.5 ROCs/MWh to 31 March 2016; 1.4 ROCs from 1 April 2016; changes proposed to exclude biomass conversions and to add fossil-derived bioliquids Dedicated biomass with CHP Current: 2 ROCs/MWh Proposed changes: 2 ROCs/MWh in 2013/14 and 2014/15; changes proposed to add fossil derived bioliquids, to exclude biomass conversion and to close this band to new accreditations from 1 April 2015 This means a dedicated biomass plant being accredited in 2015 gets 1.5 ROCs for 20 years from that point.

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