Biomass Energy

Andrea Leadsom Excerpts

Wednesday 24th February 2016 Westminster Hall

[The Minister of State, Department of Energy and Climate Change (Andrea Leadsom)]

I congratulate my hon. Friend the Member for Selby and Ainsty (Nigel Adams) on securing this debate and, in particular on being such a champion of Drax. He and I have had many conversations about it. I am delighted to see my hon. Friend the Member for Cannock Chase (Amanda Milling) here supporting Rugeley, which is absolutely right. I have enormous sympathy for the people affected by yesterday’s incident at Didcot, which was a long-standing and good source of energy for the UK. It was a great tragedy.

Every hon. Member here will know that our priorities are to move to decarbonisation at the lowest cost while ensuring that lights stay on. This debate has shown that there are many ways of achieving that. I am grateful to the hon. Member for Ynys Môn (Albert Owen) for pointing out that a balanced energy policy is needed—the shadow Minister also made that point. It cannot be all or nothing.

The installed biomass capacity of all biomass technologies at the end of 2014 was 5.4 GW, which is no small capacity. Of that, biomass combustion was about 3 GW, landfill gas was 1 GW and energy from waste was coming up to 1 GW. That is impressive and the technology certainly plays its part, from potentially low-carbon dispatchable energy to uses in heat and transport biofuel applications and from extracting energy from waste products to injection of low-carbon gas into our gas grid.

It has been pointed out that we cannot go ahead without careful consideration of the effects, both positive and negative, that biomass can have on the wider environment. Unlike other renewable technologies, biomass cannot rely on an inexhaustible fuel like the wind, tides or sunshine. The fuels on which biomass is dependent need to be sourced responsibly and sustainably, and in a manner that realises the carbon and greenhouse gas savings that biomass is capable of delivering. Our renewable energy policy seeks to balance those considerations.

My hon. Friend the Member for Selby and Ainsty asked about CfD auctions. He will know that, in November 2015, the Secretary of State announced that if, and only if, the Government’s conditions on cost reductions are met, we will make funding available for three contracts for difference allocation rounds in this Parliament. The first, for less established technologies, is expected to take place by the end of 2016, and the technologies included will be offshore wind, wave, tidal stream, advanced conversion technologies, anaerobic digestion, dedicated biomass with combined heat and power, and geothermal. That is where we are right now. We will set out our further thoughts on that as soon as possible.

My hon. Friend asked whether I agree with the proposals in the NERA report regarding whole-system costs. I am often asked, and I understand why, whether Department of Energy and Climate Change is familiar with the full-life costs of biomass compared with other technologies. I assure him that we are very aware of the costs of balancing the grid from intermittent technologies that are not incurred from electricity generated from biomass. It is dispatchable, can be base load, is controllable and is very valuable. I confirm that my Department is looking carefully at whole-system costs, but the reports that he and the hon. Member for Southampton, Test (Dr Whitehead) mentioned consist of a subset of technologies and we must look carefully at whole-system costs.

My hon. Friend the Member for Warrington South (David Mowat) asked whether subsidies can be available for co-firing. I assure him that subsidies are still available through the renewables obligation. Fiddlers Ferry in his constituency has previously co-fired under the renewables obligation and can take advantage of that scheme until 2027.

My hon. Friend the Member for Cannock Chase asked how the correct mix should look going forward. I assure her that we recognise there are implications when looking at proposals to end coal generation. It is important to have clear consultation on that, which we will announce shortly. In particular, we will look at how that might impact on coal-fired power stations that are currently co-firing.

The hon. Member for Inverclyde (Ronnie Cowan) raised his proud point that Scotland is doing so well on renewables, but I remind him that, as my hon. Friend the Member for Selby and Ainsty pointed out, over 20% of the support under the renewables obligation as a whole goes to Scotland with far less of Great Britain’s population. Scotland received 24% of RO payments in 2014-15 and will receive significantly more than its per capita share, so it would be fair if the hon. Gentleman credited the UK Government and Great Britain’s bill payers with the Scottish Government’s achievements in renewable energy.

[Philip Boswell]

Will the Minister give way?

[Andrea Leadsom]

I am sorry, I will not give way.

The hon. Member for Inverclyde asked why the Government are cutting RHI support. The RHI budget to cover renewable heat schemes has been confirmed to March 2021, rising each year to a total of £1.15 billion. The hon. Member for Coatbridge, Chryston and Bellshill (Philip Boswell) referred to biomass CHP. We are considering our proposals for that for the forthcoming RHI consultation. We will refine our current policy so that it delivers improved value for money to taxpayers and targets biomass in line with the Government’s long-term approach to heat decarbonisation, focusing on large biomass and biomass for process and district heating, and to encourage deployment that is sustainable without subsidy in future.

The hon. Member for Southampton, Test asked about the bioenergy strategy published by the previous Government in 2012. It set out a direction for biomass and recommended supporting sustainably produced biomass to deliver real greenhouse gas savings cost-effectively and taking account the wider impact across the economy. A great deal has happened in the industry since it was written, but those recommendations remain compatible with our current intentions.

Finally, as many hon. Members have pointed out, bioenergy contributes to the UK economy, creates jobs in the fuel supply chain in harvesting, processing and transport, and creates opportunities for foresters, farmers and UK ports and railways. It remains and will continue to remain important, bringing many benefits to the UK in decarbonisation, security of supply and economic benefit. I remain of the view that, when sourced responsibly, biomass can provide a cost-effective, low-carbon and controllable source of renewable energy.

Question put and agreed to.

Resolved,

That this House has considered biomass as a source of renewable energy.