Biomass Power Generation

Ian Swales Excerpts

Wednesday 20th March 2013 Westminster Hall

[Ian Swales (Redcar) (LD)]

I congratulate the hon. Member for Selby and Ainsty (Nigel Adams) on not only securing the debate, but his comprehensive review of the industry, and its opportunities and issues. My speech will be short because I was aware that, given his expertise, he would cover many of the points that I might make.

There is no doubt that biomass should be an important part of our energy mix. It is the fourth largest energy resource in the world after coal, oil and gas, and of course none of those is renewable, so it is the largest source of renewable energy in the world. However, this is yet another area in which the UK is playing catch-up. The Renewable Energy Association estimates that the industry employs about 2,000 people in the UK, compared with 60,000 in France and 68,000 in Germany. The technology is well established and many countries are exploiting it fully.

My constituency is in the Tees valley and, rather like the hon. Gentleman’s, it is becoming something of a Disneyland for green technology. Specifically on biomass, the advanced manufacturing technology centre, the Centre for Process Innovation and the Department of Energy and Climate Change are part-sponsoring anaerobic digestion research there, and Northumbrian Water has built a £60 million anaerobic digestion plant in the constituency. We have the largest bioethanol plant in Europe working on wheat. At the large Wilton chemicals site, Sembcorp has converted its power station to burn mostly timber. Across the river, Air Products is building a gasification of waste plant and is already planning its next one to make biofuels and even chemicals.

This morning, I was at the Department for Business, Innovation and Skills meeting Korean investors, including Jang Do-soo, the president of Korea South-East Power, which wants to invest in a 300 MW biomass power plant at Teesport. That will involve spending £500 million and follows the signing of a memorandum of understanding in Seoul some months ago, which was attended by a Foreign Office Minister and the UK ambassador. So far, so good, but we keep hearing inconsistent messages from DECC.

I could not attend the meeting of the all-party group on biomass on 26 February, but I was very impressed by the comprehensive notes arising from it—that is another compliment to the hon. Member for Selby and Ainsty, who chairs the group. At the meeting, the Minister repeated his belief that a new-build dedicated biomass plant is more likely to use domestic rather than imported biomass, yet at the same meeting, he referred to 700 million acres of forest in the US alone. The meeting was attended by the Virginia Secretary of Agriculture and Forestry, who is keen for exports. I have been lobbied by the US industry, which is desperately looking for greater use of its commercial timber plantations, as we heard earlier. Surely there is a place for efficient port-based biomass investment to support our base load of electricity in this country. I accept that that might be limited, but surely we should have one or two such facilities.

Some commentators do not seem to understand that wood is a crop just like any other. Sustainable forestry is no different from any other sort of farming; it simply has longer time scales. The industry needs sustainable supplies, because if it puts a substantial amount of capital on the ground, it cannot go round the world looking for spot purchases. A sustainable operation needs a source of sustainable feedstock because the investment is very long term.

I am disappointed about today’s announcement on carbon capture and storage. Teesside came third on a list of two in the CCS competition, but I still believe that it will eventually get a network.

[The Minister of State, Department of Energy and Climate Change (Mr John Hayes)]

I appreciate my hon. Friend’s disappointment, but I assure him that while we have taken two projects forward, we remain extremely committed to carbon capture and storage generally. I had a meeting this morning specifically to look at how we can work with the other projects involved. There must be a feeling among all those involved in CCS that everyone is a winner.

[Ian Swales]

I thank the Minister for his intervention, which is exactly the sort of response that the Teesside consortium is looking for, so I am sure that his comments will be noted. I thought that the weight of process industry on Teesside was unlikely to be given due regard in the competition, because that was not one of the criteria, but as we have 18 of the largest 30 carbon emitters in the country, excluding energy, a Teesside project should go ahead at some point. I am pleased by the Minister’s response and I believe that there will be another meeting on the matter with his Department on Friday.

CCS leads me to talk about something that I do not think the hon. Member for Selby and Ainsty mentioned. Biomass with carbon capture and storage is one of the very few technologies that can sequester carbon dioxide from the atmosphere for carbon-negative power. If we think about the problems we have in the world, how big a prize is that? We should seriously consider that combination of biomass with CCS, and the resulting sequestration.

I know that the Minister wants investment in infrastructure, which is a key aspect of current Government policy. The Teesport biomass plant is shovel-ready—I met the investors again this morning. I hope that it will receive his full support, but if his Department wants to cap such investments, will it please provide absolute clarity to investors so that time is not wasted, and we can all move on and think of something else to do? I repeat that the investors in such projects are receiving mixed messages.

[Jackie Doyle-Price (Thurrock) (Con)]

It is a pleasure to serve under your chairmanship this afternoon, Mrs Main. It is also a pleasure to follow excellent, well-informed speeches by two strong advocates for biomass and its potential for power generation.

I have long felt that biomass was the Cinderella of renewable energy. Although lots of subsidies have been thrown at wind and solar, the development of biomass capacity has been rather left to flourish by itself. As a good Conservative, with a clear understanding of the limits of Government, I feel it is probably better off for that. However, I am really grateful to my hon. Friend the Member for Selby and Ainsty (Nigel Adams) for securing the debate, as it is high time that the potential of biomass generation is fully recognised by Government, so that sufficient effort can be made to secure a regulatory environment with the certainty that my hon. Friend the Member for Redcar (Ian Swales) referred to, which facilitates its expansion.

I know the Government believe that biomass can play an important role in the future UK energy mix, and that is set out in the bioenergy strategy. They recognise that it is a dispatchable technology that has the ability to produce low-carbon energy quickly and, as my hon. Friend the Member for Selby and Ainsty pointed out, in response to demand—that is, it is not dependent on weather conditions that can affect other renewable technologies, such as, most notably, wind.

I am proud to represent Tilbury, which is in my constituency and has what is currently the world’s largest dedicated biomass power station. The history of Tilbury is interesting, because the power station was until very recently coal-fired, and it has been generating sufficient power for the whole of Essex for the past 50 years. However, the large combustion plant directive finished off Tilbury as a coal-fired power station, and I know that my hon. Friend the Minister will be very aware of how much impact the directive is having on our power generation capability. That really brings into stark relief the need for more certainty around the regulation and future environment for biomass, so that we can unlock investment in what is a very good technology for generating low-carbon power.

At its peak, Tilbury employed 750 people—today it employs 250, all in very highly skilled jobs—and it generated more than 1,000 MW, which is enough to power 1 million homes. In its 50 years of operation, it never breached its environmental licence. That prompts the question, although we implement EU directives with very good intentions, in terms of reducing emissions, when we look at the detail of the impact, are we really hitting the right things when we are looking at tackling climate change and environmentalism? I just put that out there. It is not unusual for the European Union to get things very badly wrong. As I said, the directive had the effect of finishing off Tilbury, despite the fact that Tilbury only ever breached its emissions limits when the A13 was full of traffic, which tells us exactly where the air contamination was coming from.

Faced with the need to close the plant, RWE npower—the owners—decided to be imaginative, and instead of running on coal until they had to close, they decided to make the groundbreaking decision to explore the potential for conversion, so that they could learn by doing and transfer that learning to developing biomass in future. What they did was not only groundbreaking but risky, and they deserve congratulations for their pioneering work on developing the ability to convert coal-fired stations to biomass. As a result of that conversion, Tilbury is now the world’s largest dedicated biomass power station, having burned coal for the last time in March 2011. I lament the departure of coal, but it is still exciting to witness what has been happening at Tilbury.

The station burns wood pellets, and in response to the intervention by the hon. Member for Blackley and Broughton (Graham Stringer), those pellets come by ship from America. That is, as he will probably recognise, a sustainable way of transporting them. As my hon. Friend the Member for Redcar mentioned, where we have power station infrastructure located at portside and the ability to transport by ship, it makes that method of power generation very sustainable.

The remainder of the hours that Tilbury has under the large combustion plant directive means that it can only generate from biomass until next year. It seems crazy that, having converted from coal to biomass, we still have to close the plant. However, RWE has big ambitions and wants to invest in a new facility to replace the existing station, having learned many lessons from the conversion. We are hopeful that the necessary permissions will be achieved and that the project can go forward, so that Tilbury can continue to keep Essex’s lights on.

It is fair to say that the conversion is less efficient than coal, but it is still pretty efficient. As I said, under coal-fired generation, the plant generated more than 1,000 MW, and now it generates 750 MW. That is a significant contribution to the national grid, and much more than the wind turbines that my hon. Friend the Member for Selby and Ainsty referred to. The conversion has, however, had a significant environmental impact, with a 70% reduction in greenhouse gases. That illustrates just how powerful converting existing infrastructure could be in terms of meeting our objectives on climate change.

During the conversion, RWE was faced with many challenges—technical, operational, and health and safety—but much has been learnt and the company would be very happy to share its expertise with the Government and more widely. The operation of Tilbury to run on sustainable biomass has had a big impact on the UK’s ability to meet its targets. That illustrates the potential of biomass generation to give a new lease of life to existing power stations, which, without conversion, would have to be decommissioned, but are sitting on top of connections to the national grid. As we look at further investment in energy capacity, connections to the grid are an important expense to deal with.

With over a third of our existing generating capacity due to close by the end of this decade, clearly, more investment in renewable and low-carbon technology is required—and quickly—so that, in future, we have a secure energy supply, a lower-carbon energy supply and, as my hon. Friend the Member for Selby and Ainsty said most eloquently, an affordable energy supply. That is why we need to unlock the supply challenges quickly, because without increasing supply, the impact will be on price, and our most vulnerable consumers will be hit. We need, therefore, to tackle the problem.

As I mentioned earlier, the beauty of Tilbury as the location for a dedicated biomass station was its suitability for transporting the wood pellets by ship, as that made it particularly sustainable. As my hon. Friend mentioned, there has been a lot of misinformation about the sustainability of biomass generation, with much scaremongering that burning wood pellets will mean the end of our forests. However, nothing could be further from the truth. I have had conversations with representatives of the forestry industry in the United States, and they are very excited and keen to satisfy the demand that this country might have for further biomass generation. It was suggested in some briefings only this week that Government plans would involve the burning of up to six times more wood than the entire UK forestry harvest, but that is totally misleading, because we are looking beyond our tiny island for supply. It can be achieved in a very sustainable way.

The ability to tap into that demand has given sustainable forestry a whole new lease of life. As we have increased the recycling of paper, the demand for forest products has altered, which means that there is a desire to look at new sources of demand. Over time, that will only accelerate, so I really do not believe that the wood panel industry has anything to worry about, in terms of the future of its supply.

[Ian Swales]

My hon. Friend is making an eloquent case regarding sustainability. Does she agree that it is interesting that even the Royal Society for the Protection of Birds is now saying that properly managed sustainable forests are valuable ecosystems in themselves and should be encouraged?

[Jackie Doyle-Price]

Yes, the RSPB’s comments are welcome, but it really needs to join things up. As we know, a little knowledge is often a dangerous thing, and it does not take much investigation to realise that some of the fears put out by the so-called environmental lobby, once they are unpicked—

--- Later in debate ---

[Graham Stringer]

The hon. Gentleman makes a valid point. The trees and forests of this country certainly could not be a sustainable supply, given the level of burn that there would be.

I am reminded a bit of Aneurin Bevan’s comment that we live on an island made out of coal and surrounded by fish, and it would take fools to damage our food or energy supply. I do not know what has happened in the past 30 or 40 years.

[Ian Swales]

The hon. Gentleman makes an interesting counter-argument. Previous speakers in the debate have cited north America as an example, but he will be aware that the paper and pulp industry has long imported biomass, mainly from Scandinavia. The power project to which I referred in my speech is in detailed talks with the Finnish industry as one of its main suppliers.

[Graham Stringer]

In a stable world economy, crossing the Atlantic or the North sea is not a problem, but a secure energy supply really means being able to do things here, and there is a risk to our energy security from moving from fossil fuels, of which we have hundreds of years’ supply, to biofuels. I just want to make that simple point.

Another point that has not come out much in the debate is the problem of toxicity. I have tabled several parliamentary questions on the matter in the past year or so. According to an answer of 23 May 2012, at column 701W, the burn of biomass in 2010 added to the atmosphere 160 tonnes of chromium, 130 tonnes of arsenic and 16 tonnes of hexavalent chromium, all of which are damaging to health and likely to reduce people’s life expectancy, although the figures are not completely available.

[Graham Stringer]

I know from my hon. Friend’s constituents, who have written to me, that there is great concern about these problems in Stretford and Trafford, so I wanted to bring that to hon. Members’ attention, because it has not yet been discussed.

Finally, I think that the carbon debt is slightly greater than the hon. Member for Selby and Ainsty said, partly because some new trees will be used. Interestingly, to hit the European 2020 targets, the carbon must be back in a tree by 2020, so if we are dealing with trees that take 10 or 20 years to grow, biofuels should not count towards the target, because that will not have happened. I think there is a bit of a fiddle going on.

[Ian Swales]

The hon. Gentleman is repeating one of the great fallacies about the industry, on which I think that the hon. Member for Selby and Ainsty (Nigel Adams) touched. Let us say that there is 20-year cropping of a stand of trees, with a 20th taken out and replanted. All the evidence shows that the overall carbon in that stand of trees at the end of the year will be the same, or will even have increased, despite the cropping, because all the other trees will have become bigger. The idea that when one tree is taken out—

[Mrs Anne Main (in the Chair)]

Order. I ask for brief interventions because we are short of time.

[Ian Swales]

Thank you, Mrs Main.

[Graham Stringer]

It is a complicated equation, although I accept what the hon. Gentleman says. There is also the question of the carbon that comes out of the earth, however, and the black carbon, which is a product of the combustion and also leads to global warming. It is a very complicated equation, so it is simply wrong to say that the process is carbon-neutral.

Although I have the greatest respect for the case made by the hon. Member for Selby and Ainsty, we are dealing with a subsidised industry that would not have been established without two European directives, one of which is counter-productive, while the other is deindustrialising the country. People’s health is being damaged and, in the round, the policy is not a good one.

--- Later in debate ---

[Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)]

It is a pleasure to speak under your chairmanship, Mrs Main. I congratulate the hon. Member for Selby and Ainsty (Nigel Adams) not just on securing the debate, but on the comprehensive way in which he dealt with the issues in relation to biomass. To start with, he is right to make the distinction between biomass and biofuels. The Minister, I am sure, will recall that on 6 March we engaged in the discussion on the Renewables Obligation (Amendment) Order 2013. Certainly the hon. Member for Brecon and Radnorshire (Roger Williams) was present as well. I do not know whether anyone else here was. Possibly the hon. Member for Redcar (Ian Swales) was; I am not sure. The debate touched on a range of issues, but it focused particularly on biomass and biofuels, and I did reflect that there was sometimes in that discussion a degree of confusion and overlap between what people were talking about, so the hon. Member for Selby and Ainsty was right to make the distinction between the two at the outset of today’s debate.

This debate is important. I am conscious of the time and I do want to give the Minister time to respond to the wide range of points that have been made during the debate—some specifically on biomass and some slightly more wide-ranging—but I just want to reflect on the point that the hon. Member for Selby and Ainsty made in relation to the perhaps liberated comments made by the soon-to-be former chief executive of Ofgem when he talked about the capacity crunch recently. While not wishing to disrespect that opinion, I am sure that he will be aware that there are a number of different views about what the level of capacity will and will not be. That is one scenario, but it is important to highlight that similarly expert commentators have painted other scenarios. We need to reflect on them all, to see where we are going with our wider energy policy.

The hon. Member for Redcar referred to the decisions announced today on carbon capture and storage. I was interested to hear the Minister’s response, particularly on the two projects that were not included in the announcement in the Budget today. If we are serious about CCS, we need to ensure that we get the long-term support regimes—such as those we are discussing in the Energy Bill, which is awaiting its Report stage—right. That will ensure that those two projects—and the Hatfield project, which was not successful in the New Entrants Reserve 300 funding scheme, because it did not get the go-ahead for match funding from the Treasury—are not completely lost and that we do not lose opportunities in those areas and in the export potential of our technological and academic lead in the industry.

The hon. Member for Thurrock (Jackie Doyle-Price) talked about the power station at Tilbury, the impact it has had and its contribution to the national grid since its very recent conversion. She also made an important point about the cost of grid connections. It is about not only the financial cost, but the time it takes energy sources to be connected to the grid, particularly in the less populous parts of the British isles. There are complications, and concerns about the time some sources take. Her important points add to the case for making biomass part of the balanced mix, particularly because, as is sometimes described, it can be used during a transitional phase, while other sources are developed further. I do not think that biomass is completely ideal, but we do not live in a completely ideal world and we have a significant energy challenge to meet over the next few years.

The hon. Members for Hexham (Guy Opperman) and for Montgomeryshire (Glyn Davies), who do not necessarily have negative perspectives, drew attention to some areas of concern with biomass. They both pointed out that they are not opponents of biomass, but they wanted to draw the House’s attention to some of its consequences. I shall pick up from where the hon. Member for Hexham left off. I do not do so as some sort of “bourgeois liberal”, “chi-chi” commentator or whatever other phraseology the Minister uses to keep those behind him happy in debates, but from the serious perspective of the potential consequences for other industries. I am sure that the Minister will recall that I touched on the specifics when we discussed the topic in Committee.

I discussed some of the consequences with my right hon. Friend the Member for Stirling (Mrs McGuire), who is a colleague of the hon. Member for Hexham on the all-party group on the wood panel industry. The issue is what is, and is not, waste. We hear a different interpretation of waste when we talk to the wood panel industry, as opposed to when we talk to other industries, such as the furniture industry. There needs to be a decent level of engagement between the Government and the industry, because they have different data that show very different things—the impact on price is just one factor that needs to be explored properly. The Minister said earlier this afternoon that he intended to ensure that there was that level of engagement. It is important because anyone’s starting point with biomass is that it needs to be sustainable and focused on genuine waste products—products that cannot be used in any other meaningful way, such as in furniture or in the wood panel industry, which can use lower-grade wood than the furniture industry. I am sure that he is well aware of those points.

[Ian Swales]

The hon. Gentleman is right to flag up the differences in data. Is he aware that the Renewable Energy Association says that there has been a 15% fall in wood prices in real terms since 1996?

[Tom Greatrex]

Indeed, and I was about to quote from its figures. The hon. Gentleman is right and he makes the point about the different interpretations. In debates about different aspects of energy policy, sometimes differences of view are over-interpreted and elaborated on by people with an ideological objection, which is regrettable. In this case, if we go into the detail of the different sets of data, to establish exactly what the impact is, it would be good for the industry and good for the energy supply going forward.

The last time we discussed this, in a Committee, I asked the Minister some questions. He gave a commitment, but he did not answer other questions precisely or completely, so I would like to give him the chance to do so, because there is a slightly different audience this afternoon. When he met the all-party group, he agreed to write to generators requesting information on their biomass sourcing intentions for the next five years. I want to press him again on whether the correspondence has begun and whether the information is back from the generators. They are important data, particularly, as he knows, in relation to the differentiation between imported and indigenous supply, which brings us back to the points the hon. Member for Hexham made about the industry.

The Minister said that he will look again at the option of differentiating support for imported and indigenous products. Will he come back to that point? He also said that he would establish a working group with the wood panel industry and that the letters would go out before the end of the month. We are not quite, but almost at the end of the month, and he made the commitment at the beginning of the month. Has he been able to do it yet?