Biomass Power Generation

Nigel Adams Excerpts

Wednesday 20th March 2013 Westminster Hall

[Nigel Adams (Selby and Ainsty) (Con)]

It is a pleasure to serve again under your chairmanship, Mrs Main. I am delighted to have secured this topical and important debate. I fear that other distractions in the House might limit the number of participants, but I am pleased that hon. Members have taken the time to attend. It is particularly important as we debate the Energy Bill, which will shape our country’s energy profile for decades to come, as well as the emerging biomass industry and the entire UK renewable sector.

My constituency is home to two of the country’s largest coal-fired power stations, Drax and Eggborough; I refer hon. Members to my entry in the Register of Members’ Financial Interests. Between them, they supply 11% to 12% of the UK’s electricity supply or, to put it in terms that most people would understand, enough power for 9 million homes. They are essential national assets, with the flexibility to provide dispatchable electricity—electricity when it is needed—which is critical to the nation’s security of supply. Both stations have well-developed plans to convert some or all of their generating units to burn sustainable biomass over the next few years.

It is crucial to appreciate the difference between biomass and biofuels, which one or two journalists who have written articles recently do not seem to understand. Arguments laying concerns about the destruction of rain forests at the feet of the biomass energy industry are simply inappropriate and wrong and have no part in the biomass industry either now or in future. Those arguments relate to liquid biofuels, which should not be confused with solid state biomass, which has robust sustainability criteria. To imply that protected rain forest wood can be used for power generation is simply wrong. Woody biomass, which is made into the more energy-dense and transport-efficient pelleted form used as fuel by stations such as Drax and Eggborough, is sourced mainly from residues, thinnings and less marketable wood, which is not of sufficient quality to be used for other, higher-value applications.

Bioenergy is a relatively new market, and the demand is welcomed by those in the hard-pressed global forest products industry, particularly where more traditional markets are in decline, as it provides the additional income that they need to continue investing in sustainable forestry management. Growing and harvesting trees provides family-supporting jobs for millions of men and women. Aside from the economic and social aspects, work in forests brings environmental benefits.

I will focus on the role of biomass in UK energy security. I know that energy security is a subject close to everybody’s heart, including that of the Energy Minister. The regulator Ofgem’s recent warning of a capacity crunch—we could have a capacity margin of only 4% as early as 2015—should set alarm bells ringing. It could have disastrous impacts on the cost and reliability of electricity for consumers, particularly the fuel-poor and businesses that are already struggling to remain competitive. Due to other regulations, approximately 12 GW of existing coal and oil-fired plant will be retired. One third of our coal-fired generation will close by 2016, and potentially more in the second half of this decade as further legislation and taxes start to bite.

In readiness for the impact of the closures, there is an urgent need to bridge the capacity gap. Even given the welcome announcement yesterday concerning Hinkley Point, new nuclear projects will not start generating until the 2020s, nor will offshore wind on any scale. Consequently, the low-cost solution of converting our existing coal-fired grid-connected plants to renewable, sustainable biomass can and should play an important role in keeping the lights on in the short to medium term.

In the next few weeks, Drax will convert its first unit to burn sustainable biomass rather than coal, and within the next few years, three of Drax’s six units will have been converted to burn sustainable biomass. I welcome the recent announcement in the Budget that £500 million will be invested in carbon capture and storage at Drax, in partnership with Alstom. The news is incredibly welcome in my constituency, and we look forward to seeing how the trial works. I thank the Minister and the Secretary of State for all their efforts to ensure that Drax had the project.

[Graham Stringer (Blackley and Broughton) (Lab)]

I congratulate the hon. Gentleman on securing this important debate. He has twice used the word “sustainable” to describe biofuels. “Sustainable” is only accurate if one discounts how much carbon dioxide is released from the soil when the trees and vegetation are moved and how many significant journeys will be made to take the biomass from North America to this country. Does he accept that?

[Nigel Adams]

Yes. The biomass that we use must come from sustainably managed forests, by which I mean forests where growth is at least equal to harvest. Nobody is saying that biomass is carbon-neutral; it is low-carbon. We must ensure a neutral, or ideally a positive, growth-drain ratio. The hon. Gentleman makes a particularly good point, to which I shall come later in my remarks.

[Andrew Percy (Brigg and Goole) (Con)]

I am a bit alarmed by the comments that seem to be against biomass. There is another issue of sustainability, of course—sustainability of jobs. It would be worse for our constituents if the conversion to biomass did not proceed, and those constituents of ours who work at dirty coal-burning power stations were suddenly thrown out on to the unemployment register. Sustainability is not just about what we burn; it is also about jobs.

[Nigel Adams]

I could not agree more with my hon. Friend and neighbour. We are fortunate in our neck of the woods; unemployment has fallen considerably in the past couple of years. Funnily enough, as it happens, I had a meeting yesterday with Shepherd Building Group, one of the main construction partners helping Drax convert its biomass plant, and Shepherd told me that more than 1,000 jobs are being generated or safeguarded by the project, and more than £700 million in investment is being made to realise it. We must bear that in mind. The hon. Member for Blackley and Broughton (Graham Stringer) makes a valid point, but we must remember that people’s livelihoods and jobs are on the line.

[Kate Green (Stretford and Urmston) (Lab)]

I congratulate the hon. Gentleman on securing this debate, which is important to my constituents because an application is in train for a new biomass plant in Davyhulme. One issue is that not all the biomass that will be used is necessarily virgin forest. In the case of the Davyhulme plant, it is proposed to recycle already-used woods. Does he accept that if those woods have been treated with varnishes and paints, it creates a rather different picture for the potential carbon impact?

[Nigel Adams]

Yes, that is a fair point. I will make a number of points later in my remarks about the sustainability of the raw material.

[Andrew George (St Ives) (LD)]

While the hon. Gentleman is covering the issue, it would be interesting to hear his comments and advice, because I know far less about it than he does. To achieve the capacity that he is describing, what proportion of source would be imported? Has he seen any comparisons involving the wide range of organics that might be introduced into anaerobic digestion, as an alternative to the materials that he has described?

[Nigel Adams]

Drax and Eggborough power stations, if their plans are realised, will need 15 million tonnes of that material, the majority of which, it is fair to say, will come from abroad in a pelletised form. The UK simply does not have the forestry or the raw material. It is worth pointing out, however, that those are coal-fired power stations and that the vast majority of the coal—in fact, every bit of coal going into Eggborough—is imported.

Eggborough, as the Minister knows, is in the final stages of some detailed talks with the Department of Energy and Climate Change. The project is shovel-ready for full conversion of all four of its 500 MW units; the first unit could start generating exclusively from biomass in late 2014, if we get things right. Can the Minister reassure us that he will monitor and facilitate the progress of the second conversion project, which is important for my constituency and the UK, as it passes through the internal DECC processes? Over the next few years, as a result of the projects, the predominantly coal-fired stations will become predominantly sustainable biomass-fired stations, providing a significant contribution to the UK’s targets for renewable energy, protecting thousands of jobs, as mentioned by my hon. Friend the Member for Brigg and Goole (Andrew Percy), and enabling hundreds of millions of pounds of investment in the stations, as well as the enormous investment and job potential in the upgrading of our ports and railways to facilitate them.

Sustainable biomass is an essential part of our renewable energy mix: it is low cost, low carbon—if sustainably forested—and, importantly, it fuels reliable, predictable and dispatchable generation. Its availability is not exposed to the day-to-day vagaries of the Great British weather, so it can provide electricity when needed rather than when the weather permits. Also, unlike almost all other renewables, biomass does not require us all to pay for stand-by fossil fuel capacity for the times when the sun does not shine and the wind fails to blow.

By now Members will have gathered that I am immensely proud of and pleased with the progress we have made on biomass in Selby and Ainsty, which will soon be the renewable energy capital of Europe, as I am sure all will agree. We will have the potential for more than 4 GW of renewable generation in a five-mile radius, which is equivalent to some 8,000 of the large 2 MW onshore wind turbines or, put another way, to more than double the total realistic output of all the onshore wind turbines built in the UK by the start of this year.

I am, however, confused by some of the inaccuracies that tend to creep into the debate, often from those who should know better. To be clear, and as I mentioned earlier, biomass is not a zero-carbon technology but a low-carbon one. Emissions are associated with the harvesting and transport of biomass, and they must be extremely closely monitored. I fully support the Government’s efforts to ensure that mandatory sustainability standards are applied, as do Eggborough and Drax, which already insist on robust sustainability standards and criteria.

Most large-scale biomass generation in the UK will use wood, often by-products of other industries, such as forestry and sawmill residues together with non-commercial timber from thinning and forestry management operations. None of those sources cause land use change, which cannot be said of those used for biofuels such as palm oil; none of them results in lost opportunities for food production; and all of them generate substantial overall carbon savings.

[Andrew Percy]

Biofuels are important to the Humber, which has two bioethanol plants. May I encourage my hon. Friend to split biofuels into biodiesel and bioethanol, because the bioethanol production on the Humber is entirely sustainable and also provides an animal feed by-product? If he separates the two, we on the Humber will see that as helpful.

[Nigel Adams]

I hope that I have done so by making the point about the completely different product to be used to generate electricity at the power stations in my constituency.

The very process of managing a sustainable forest increases its ability to act as a carbon sink. Most of the biomass used for energy production in the UK will come from abroad, but it should and will come only from sustainably managed forests. In north America alone, the forest products industry harvests more than 500 million tonnes of timber per year, but demand for its products is declining. Unless the forests of the south-eastern USA get new production outlets, the health of those forests will decline.

We should note the scale of what we are discussing. I repeat: in north America alone, more than 500 million tonnes of wood is harvested every year. In only three selected regions of north America—the south-east, eastern Canada and British Columbia—it is conservatively estimated that a further 120 million tonnes could be sustainably harvested and utilised annually. Those figures put into some perspective the 30 million tonnes of wood that Drax and Eggborough need to produce the 15 million tonnes of pellets required.

In Canada, by providing a commercial use for the vast area of beetle-killed boreal forest—an area the size of England and growing year on year—we can help to turn what is currently a huge emitter of harmful greenhouse gases into a new carbon sink through clearance and Government-controlled replanting. Furthermore, the pelletising process enables us to ship the wood safely to the UK without any risk of importing disease, a subject that has been mentioned previously.

Some Members are aware of the so called carbon debt argument: because a tree burns in seconds but grows in years, there is somehow a carbon debt until a new tree has grown. The Department’s bioenergy strategy considered carbon debt in detail, however, and was explicit in its conclusion that, in situations where new forests are created, or existing forests have been under long-term management for production of timber and/or biomass, the harvesting of wood does not incur a carbon debt.

The biomass that Drax and Eggborough will use is to come from sustainably managed forests, which, as I said in response to an intervention, means that the growth must be at least equal to harvest, ensuring a neutral or ideally positive growth-drain ratio. In short, the sustainable management of trees in a productive forest means that they absorb more carbon than they would have done had the forest not been managed. In effect, such trees are building up a carbon credit as they grow. Can the Minister therefore reassure the House that the sustainability criteria for biomass, when the Government confirm them, will be based on the concept that a sustainably managed forest has a stable or increasing carbon stock, meaning that biomass from sustainable forest is at least carbon neutral?

Let me provide a few more basic facts about biomass generation. It is the only renewable technology able to supply base load renewable power at any scale. It is flexible and stable, and it has a continued role in balancing the grid with low-carbon generation. It is an essential part of the low-carbon energy mix and one of the only deliverable and affordable alternatives to the second dash for gas in which we might have to engage. Excluding biomass from the energy mix would significantly increase the cost of decarbonising our energy system. The Department estimates that sustainably sourced bioenergy could contribute around 11% to the UK’s total primary energy demand by 2020 and significantly more by 2050. Even taking into account the energy used to grow, transport and process the fuel, biomass-generated electricity produces substantially fewer emissions than are produced when fossil fuels are used.

Closer to home, I am mindful of the need to respect the effect of using biomass as a renewable fuel on other UK industries. The wood panel industry in particular is concerned about the impact on the historically low wood prices it has benefited from recently, but it should not have to worry because the wood that my power stations will use will come overwhelmingly, if not entirely, from markets in which it does not operate. The biomass industry relies on wood that no one else has a use for, certainly on that scale. It cannot pay the prices that the wood panel, paper, construction and furniture industries can pay, so instead of representing a threat to those industries, it provides a market for much of their previously unusable by-products that would previously have been burnt or put in landfill where they would degrade and emit carbon dioxide or, even worse, methane.

What about the benefits of biomass not just for electricity generation, but for the economics of the country as a whole? I am of the opinion that the biomass industry could generate infrastructure spending over the next three to four years alone of significantly more than £1.5 billion, leaving a lasting legacy of improvements to our ports and rail infrastructure while supporting thousands of jobs in the supply chain throughout the UK. That investment is needed now and should form part of the Government’s growth strategy.

I will come to a conclusion so that the debate can be opened to other hon. Members who have dragged themselves away from the Budget debate. I have stressed, perhaps overly, the conversion of my constituency’s two large coal-fired power stations to burn biomass, but that is just the first chapter, not the whole story, of the future of biomass. The conversion of existing fossil fuel plants is a speedy, low-cost first step in the transition from the use of carbon-intensive fuels to a greener alternative. It is an important part of what I see as a continuum in the use of biomass as a fuel source, which will also see new build, higher-efficiency power stations fuelled by a robust and sustainable fuel supply chain. Converting our coal-fired stations will not only see the country through an important transitional period, but will create a bridge to keep the lights on at the lowest possible cost. I suggest to hon. Members here today that on the grounds of electricity supply security, benefits to the economy and, most of all, emissions, sustainable biomass has a growing and valuable role and is a vital energy source for all our futures.

--- Later in debate ---

[Graham Stringer (Blackley and Broughton) (Lab)]

I want to make a few general points. First, I congratulate the hon. Member for Selby and Ainsty (Nigel Adams) on initiating this important debate. If I was in his situation and had in my constituency two major coal plants that would shut if they were not converted to biomass, I would take exactly his position.

I want to take a step back and give a slightly wider perspective on what is happening, in line with what the hon. Member for Thurrock (Jackie Doyle-Price) said about energy and climate change. I can think of no country in history that remained competitive while it had higher energy costs than its competitors. At the base of our present energy policy is a huge gamble that gas prices will increase and that therefore the investment that the Government are making will make alternative energy competitive. At the moment, however, it is not competitive, and we need to bear that in mind, particularly given the worldwide increase in shale gas.

The second point I would make about the conversion to biogas is that it has two drivers: one is bonkers and counter-productive, while the other should not be implemented. One is the 2020 directive from Europe, which is an attempt to achieve a 20% reduction in carbon dioxide emissions by 2020. On one level, that would be fine, but the measure deals with only one side of the equation—emissions. It does not deal with consumption, and the reason why the carbon budget in Europe and this country is going up is that we are importing machines and other products from elsewhere, which is why the amount of carbon dioxide in the atmosphere is increasing generally. The policy is not working and it is counter-productive—it is a deindustrialisation policy disguised as an environmental policy.

The other problem, which the hon. Lady mentioned, is the large combustion plant directive. I do not understand why this country must implement the directive by a particular date. In that respect, the Minister, who I think is excellent—I rather prefer his interpretation of the country’s energy policy to the Secretary of State’s—owes me, unusually, a letter. I asked him why we had not applied to extend the deadline for implementing the directive, which is allowable under its provisions. Perhaps he will tell us in his response.

There is a subsidy and a cost to biomass. The hon. Member for Selby and Ainsty made a good case, and he gave two reasons for using biomass. One was jobs; as I said, I would make the same argument if I was in his situation. However, when we give an industry a subsidy, as is the case for biomass and the rest of the alternative energy industry, there is a cost elsewhere, as the hon. Member for Thurrock said. That subsidy could be costing jobs elsewhere, even though it may not be necessary.

The second reason that was cited related to security of energy supply, which I would always put at the apex of energy policy. One can argue about price and how energy is made, but if we do not have any, we have nothing to argue about. I remind the hon. Member for Selby and Ainsty that, in times of difficulty, whether that is to do with energy or anything else, an energy supply that comes across the north Atlantic is not totally secure.

[Nigel Adams]

The hon. Gentleman should consider where the fuel comes from now. We buy millions of tonnes of coal to fuel our power stations. It comes across in ships, and I imagine it is extracted through open-cast mining. That has been going on for years, so this is not a new phenomenon. Of course we must get the biomass from somewhere.

[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.

--- Later in debate ---

[Guy Opperman (Hexham) (Con)]

Everyone here would agree that the fundamental concept of biomass is a good thing. There can be no objection by any Member of Parliament or any constituent to the fundamental principle and support for it. However, as always with Government policy, including in the three years that I have been in the House, the consequences are not always what we would wish to see. I am faced with a situation—this is the third Minister in three years whom I have addressed in relation to biomass subsidy—whereby, on the one hand, the standard person who is buying timber, whether it is a furniture maker, someone doing wood panelling, a caravan maker or any other person using timber in any way, shape or form in this country to run any kind of business whatever, buys at a price that is unsubsidised by the Government. On the other hand, energy companies that wish to purchase timber in this country for use in a biomass energy plant are subsidised to a large and significant degree by the Government.

The consequences are very clear. First, the timber price goes up. Secondly, the energy companies have a competitive price advantage, which allows them to purchase timber at a cheaper rate than all other purchasers in the country. Every single person, save for an energy company, gets a different price. That, from a Conservative coalition, I find illogical and hard to believe, given that we are meant to be a free-market-based organisation. The reality is that the subsidy is distorting the market, raising the price of timber and, I regret to say to my hon. Friend the Minister, posing a severe threat not just to the wood panel industries, but to any utiliser of wood in this country.

[Nigel Adams]

I have the utmost respect for my hon. Friend. I just wonder whether he can tell me of a significant power generator in the country that is buying its timber to be pelletised from sources within this country.

[Guy Opperman]

In accordance with the time-honoured traditions of the House, I shall be delighted to write to my hon. Friend and give him chapter and verse. The honest reality is this: I cannot give him chapter and verse right now. However, he will be fully aware that there are only two places where a biomass energy company can purchase its timber product. It can come from this country—we have 12 million tonnes of timber, and a large proportion is going to British-based energy companies—or it can be obtained from overseas. My hon. Friend is making faces from a sedentary position along the lines that he disagrees with me. I manifestly do not accept that. In fact, I will definitely make the case—I would be interested if the Minister could comment, because he is very informed—that if there is in reality no energy company in this country creating biomass that is utilising—

[Nigel Adams]

rose—

[Guy Opperman]

I will not give way any more. The situation surely is this. On any interpretation, if there is no energy company in this country that is utilising domestic wood—

--- Later in debate ---

[Nigel Adams]

Significant.

[Guy Opperman]

If there is none or no significant one, why is a subsidy needed? If there is no utilisation, that is all the more reason why the Minister should take the dramatic point of view that we should get rid of the subsidy. With no disrespect, the energy companies cannot have it both ways. They cannot say, “We need a subsidy to buy timber in this country; that subsidy is to help us,” and, alternatively, “We don’t use it, so we don’t need the subsidy.”