Biomass Power Generation

Jackie Doyle-Price Excerpts

Wednesday 20th March 2013 Westminster Hall

[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—

[Mr Hayes]

I am grateful to my hon. Friend for raising the issue of wood panels, as other Members have. I am determined to do right by the wood panel industry. The Government are engaged with the industry and I shall say a little more about that, but it is right that we listen to the industry, take into account its circumstances and ensure that our policy has no unintended consequences. However, as far as the other people that my hon. Friend mentioned are concerned—I sometimes describe them as bourgeois liberals, do I not?—their malevolent, malign, mischievous opinions will be isolated by this Minister.

[Jackie Doyle-Price]

I thank the Minister for those comments. I agree that we need to take the wood panel industry with us. I suspect that, with more understanding and dialogue, it will come with us, because the case has been made that we can supply the demand for biomass without impacting the industry’s supply unduly.

[Guy Opperman (Hexham) (Con)]

I apologise for arriving late for the debate, Mrs Main. I congratulate my hon. Friend the Member for Selby and Ainsty (Nigel Adams) on securing it, and thank my hon. Friend the Member for Thurrock (Jackie Doyle-Price) for taking my intervention. I should declare an interest as a member of the all-party group for the wood panel industry, and I have an employer in the industry in my constituency. I absolutely endorse all the points that have been made thus far, but I would make two points to my hon. Friend. The first is that the timber price has gone up by well over half—

[Guy Opperman]

Will my hon. Friend comment on the fact that the timber price has gone up by at least half since we have had the domestic subsidy?

[Jackie Doyle-Price]

All I can say is that RWE is planning on making a significant investment, and it has invested in its supply chain. The issue that my hon. Friend raises really will not impact on its ability to run the dedicated biomass facility in Tilbury. I would also point out that timber is not the only commodity that has gone up in price in recent years. I really do not think, therefore, that the issue that my hon. Friend raises will be any impediment to further exploitation of this technology.

I look forward to Tilbury rising again and reopening with new permissions and with a brand-new facility. I hope the Minister will look at coming to visit in due course to see how plans are progressing. I am really pleased that RWE remains committed to Tilbury and that, despite having to close its existing facility, it still wants to invest in power generation on the site.

I know the Minister does not require too much encouragement in this regard, but I would like to highlight how much this issue illustrates what happens when Governments fail to fight our corner in Europe. I can see a situation coming down the track very quickly where we will be forced to buy more and more electricity from France, in particular, because the regulatory system has favoured nuclear over coal. We all want cleaner, greener energy, but we need to keep the lights on, and we need to make sure that people can afford to heat their homes. For our own energy security, therefore, we need to make the most of the potential of biomass as an energy source, given its generating potential, and given how much more of our domestic demand we will be able to supply.

I implore the Minister to make every effort to ensure that rapidly deployable capacity, in the form of biomass conversion, comes on stream as quickly as possible. In that respect, I cannot add much more to what my hon. Friend the Member for Selby and Ainsty said in his opening remarks.

I want to make a final point about investment. As a country we rely heavily on private capital to achieve the investment in power generation that we need to meet our energy needs after 2015. As my hon. Friend the Member for Redcar said, to achieve that, industry needs long-term certainty to encourage investment, particularly in a world where capital is finite and the market environment very competitive. In addition, we are dealing with energy companies that are global in their reach, and they can easily go and invest their capital elsewhere.

It is telling that coal-fired power stations are being built in Germany, when we have made coal completely uneconomic in this country. When we are dealing with private investors and expecting them to invest billions of pounds so that we can keep our lights on, we must recognise that they are not in it for charity, and we must enable them to facilitate that investment in the best way we can. To put it bluntly, the Department has, hitherto, been not enough about energy and rather too much about climate change. I believe that really has to change, and I know that if anybody will facilitate that change, it is my hon. Friend the Minister.

--- Later in debate ---

[Guy Opperman]

I accept that. We all understand that to kick-start energy policy, there must be subsidy—no one disputes that—and there has been, in a multitude of different energy fields over a long time, under successive Governments, that process. However, just as the Government have reviewed the subsidy that exists in relation to solar or other types of energy production, so the Government have an obligation to review the extent to which they subsidise domestic wood. I shall go further than that and say this. In this context, it is having an impact on jobs. There is no question in my mind about that. It is also having an impact on the consumer, because as with all energy, there is a degree of subsidy, and that subsidy is coming from the consumer. The consumer is paying, through Government subsidy, for the consequences of the energy production. Therefore, to say that it is without any adverse consequences whatever would be simply wrong.

[Jackie Doyle-Price]

The area that my hon. Friend is opening up now—the impact on consumers—is a very important one across the wider perspective of energy policy. The reality is that we need to invest in generating capacity, and biomass will be an important ingredient of that. If we do not do that, the price of energy for consumers will go up, because we will be having to buy that power on the open market.

[Mrs Anne Main (in the Chair)]

Order. I remind the hon. Gentleman that the winding-up speeches will start in just under four minutes.