Biomass Energy

Alan Whitehead Excerpts

Wednesday 24th February 2016 Westminster Hall

[Dr Alan Whitehead (Southampton, Test) (Lab)]

As hon. Members around the Chamber this morning have made clear, biomass has a substantial role to play in the move towards a low-carbon energy economy. Indeed, not only does it have a substantial role to play, but we should encourage the proper fulfilment of that role over the next period—I will come to that in a moment. We should also be clear about where biomass stands in the move towards a low-carbon economy and the extent to which it can play a role. In that respect, we need to be clear that, given the extent to which reasonable levels of feedstock can be provided to biomass over the next period—and, indeed, over the longer period, up to 2050—it can probably achieve penetration in the UK energy market of perhaps 12% or so.

I take that estimate from the Government’s UK bioenergy strategy, which the hon. Member for Coatbridge, Chryston and Bellshill (Philip Boswell) mentioned. We need to be clear that it is not the case that there is no strategy; there is a strategy—at the moment. Whether the present Government consider it to be their strategy now is another question, bearing in mind our discussions on the recent Energy Bill, for example, about the extent to which things that happened under the last Government really were or were not part of the Government’s strategy. Before we end proceedings this morning, I would be interested to know from the Minister whether she feels that her Government wish to continue to pursue that strategy, or whether she is in the process of writing a new bioenergy strategy for the future.

The existing strategy clearly places limits on the extent to which biomass can play a role in the move to a low-carbon economy. As my hon. Friend the Member for Ynys Môn (Albert Owen) emphasised, that underlines the fact that biomass has to play a role as part of a suite of technologies in order to provide the widest possible mix of energy over the next period.

We also ought to be clear that, as a low-carbon energy technology, biomass has to be just that: sustainable. As my hon. Friend and the hon. Member for Coatbridge, Chryston and Bellshill both mentioned, sustainability is not just about where we get our biomass feedstock from, but about how we use land for biomass production, and the extent to which biomass production may push out other forms of production, or, as my hon. Friend the Member for Ynys Môn mentioned, the extent to which it takes place on marginal land. In the UK, Drax, for example, is encouraging the planting of short rotation coppicing production, Miscanthus grass and various other things, which can provide a sustainable source of biomass for those undertakings. It is important that biomass is fully sustainable, and of course that comes into play in ensuring that imports of biomass are fully certified across the board, as far as their origin and how they are produced are concerned.

Having said that, biomass certainly can play a clear and substantial role and can perhaps produce 10% to 12% of the UK’s energy requirements in future. That also emphasises the point that biomass should not be set against other forms of renewable energy. In that context, I was a little concerned about the suggestion from the hon. Member for Selby and Ainsty (Nigel Adams) that biomass should, as it were, be advantaged against other forms of renewable energy, because of its relationship to system integration costs, as far as the network is concerned.

[Nigel Adams]

I apologise if that is how my remarks came across. What I actually want for biomass generation is a level playing field—for the industry to be able to bid on an equal basis, taking into consideration the full system costs of all technologies. That is all I want: an opportunity for the industry to be able to bid on a level playing field, in a fair way.

[Dr Whitehead]

I thank the hon. Gentleman for that clarification, but perhaps I can also make a little clarification for him. He mentioned the NERA and Imperial College London report about system integration costs. That is an important report, but he should also know that a similar report from NERA and Imperial College London was produced about three months before the report that he mentioned. It so happened that the client for the other report was the Committee on Climate Change, as opposed to Drax. The questions that were asked in the two reports, which had identical authors at almost identical times, were slightly different and therefore produced fairly different results for overall system integration costs. Essentially, one looked at how biomass would relate to the system as it stands; the other looked at how it might relate to system changes.

One thing I am sure the hon. Gentleman would endorse is the extent to which system changes have to take place to ensure that those changes in the mix are integrated into the system as a whole—so, the periods over which energy is sourced, and what happens with transmission charges and how they may be levied in future for a particular location.

[David Mowat]

I hear what the hon. Gentleman is saying. Does he not accept, though, that it is a fact that intermittent forms of energy require back-up and that there is an associated cost that is not reflected in the CfD structure at the moment, which I think is the point that was being made?

[Dr Whitehead]

The hon. Gentleman is absolutely correct. There are system integration cost differentials between different forms of renewable energy. My point is that, depending on which report people read, those are not the same as they might appear to be between renewables. Indeed, what is undertaken in how the system works as a whole can substantially mitigate the different costs, so that, as we evolve the system, we can be in a much better position to ensure that the suite of different renewables—which, as my hon. Friend the Member for Ynys Môn mentioned, is so important for future low-carbon deployment—can properly be deployed happily alongside one another, as a suite of measures to ensure that we move towards a decarbonised economy.

I recognise that we have limited time this morning, so I want to turn briefly to the point the hon. Member for Selby and Ainsty made about the level playing field that is necessary for biomass. It is undoubtedly the case, given the measures that are in place at the moment for the enhancement of renewable energy, that there is not a level playing field. There is an overall problem with that suite of measures because of the levy control framework and the extent to which hardly anybody is likely to get a contract for difference for their project over the next period. Indeed, the hon. Gentleman will be aware that some biomass plants got contracts under the early investment decisions, prior to the new form of CfDs coming into being. However, when it comes to the efficiency of biomass, allying that with CHP schemes to ensure that biomass can get 15-year contracts under the CfD arrangements, even if the heat source is not there for 15 years, is an important change that would need to be made to CfD arrangements for the future.

As for the renewable heat incentive, the fact that there are no guarantees for tariffs between commencement and completion of a project if a biomass plant is trying to go for RHI seems to be an omission for the future that should be rectified as far as their admission to those arrangements—

[Mr David Crausby (in the Chair)]

Order. Dr Whitehead, if we are not careful, we will not hear the Minister, and I really want to hear her.

[Dr Whitehead]

I appreciate that, Mr Crausby. I will bring my remarks to a close immediately.

My view is that it will be necessary to ensure a level playing field in the future arrangements for low-carbon energy; indeed, whether biomass should be accessible to the capacity market as part of those arrangements might be a consideration the Minister is thinking about. I will be interested to hear from her what arrangements may be made for CfDs and RHI for that level playing field to ensure that biomass plays the role that all of us here this morning want it to play in the future of renewables.