Energy Bill

Viscount Ridley Excerpts

Monday 28th October 2013 Lords Chamber

[Lord Berkeley (Lab)]

I support the amendment in principle, but I am concerned. The noble Lord, Lord Cameron, has made some interesting points. I have been told that the biomass market, as we see it today, probably has a life of about 10 years. Investment is going into ports at both ends for the wood, as well as in shipping lines and transport from the ports. I declare an interest as chair of the Rail Freight Group. A lot of investment is going into new wagons or converting coal wagons to keep this stuff dry, because if it gets wet it is not very nice. The message in the industry is that they have got 10 years and then the nuclear power station at Hinkley point, and perhaps others, will be on stream, after which there is no guarantee of what will happen.

If that is the case and if, in the interim, the furniture industry of which the noble Lord, Lord Jenkin, spoke, is decimated, that will not be very good. We will have had 10 years of biomass but no furniture industry after that. I do not know whether that is the case. There are clearly many millions of tonnes of biomass in other parts of the world, but there are problems certifying where it comes from. Also, I am told that if it comes in pellets you cannot convert it to woodchips and vice versa. I would hate to see an industry like that decimated just for 10 years of using local biomass which then proves to be uneconomic and where the plant closes down.

[Viscount Ridley (Con)]

My Lords, I wish to speak briefly in support of the amendment. I think I am right in saying that the Secretary of State has expressed a view similar to that of the amendment. Speaking to the BBC on 18 July, he said:

“Making electricity from biomass based on imported wood is not a long-term answer to our energy needs—I am quite clear about that.”

We are in a bit of a bind here, because the Department of Energy and Climate Change has said it expects about 90% of the biomass that will be burned in power stations to be imported. However, the wood panel industry is clear in saying that even if 10% of what is going to be burnt is produced domestically, it will have a devastating effect and could displace a lot of the wood panel industry, which it estimates would increase carbon emissions by about 6 million tonnes, because if you are burning something today instead of incorporating it into a piece of furniture, you are turning it into CO₂ much sooner. Making furniture also produces carbon emissions, but considerably less—about one-quarter or one-fifth of the amount.

Perhaps I may also take this opportunity to ask the Minister for clarification on my Written Question earlier this year about carbon dioxide emissions from burning biomass. It is clear that in the short term, biomass is about the highest carbon dioxide-emitting fuel there is. If you recapture that over a period of 35 or 40 years for softwood, and rather longer for hardwood, one can in the long run perhaps make the case that biomass is carbon neutral. However, all the calculations that I have seen show that because of the need to drive off water, and due to its chemical composition—there is a difference between cellulose which has hydrated hydrogen in it as opposed to coal which does not—the use of biomass will increase our carbon emissions over several decades. I thought that that was the period we are most worried about, so I am a little puzzled about the current dash for wood, as I call it.

[Baroness Verma]

My Lords, I am grateful to my noble friends Lord Jenkin and Lord Roper for tabling the amendment and prompting debate on the issue of using UK-sourced woody biomass for electricity.

The amendment would give the Government powers to set limits on the amount of UK-sourced wood used by each biomass power plant. As I outlined in Committee, one of the aims of the Government’s bioenergy strategy is that any support should consider the consequences of policy interventions on the wider energy system and economy, including non-energy industries. It is the Government’s view that where this and the other aims listed in the UK Bioenergy Strategy are met, bioenergy can make a significant contribution to meeting our renewable energy, energy security and emissions-reduction needs at low cost.

We have taken a number of measures that we believe are sufficient to ensure that the biomass policy meets this aim. The department made an assessment of the amount of woody biomass that may be available to the UK without significant impacts on other sectors. We then made an assessment of the amount of UK woody biomass that is likely to be used by electricity companies, which was well within the forecast availability. We have since then put in place measures to monitor these forecasts and their level of accuracy. We asked large-scale electricity generators using woody biomass to disclose to us on a voluntary basis the amount of UK wood that they estimate they will procure and use over the next five years, and we require this information to be signed off by the company’s board. We are pleased to say that all the operators responded to our request for information on their wood procurement. The department has now aggregated and published this data, and we will undertake to do this annually. The data provided by the operators supports the original forecast of wood use for electricity. Domestic wood supplies will not be their target.

In addition, we have aggregated the results of the sustainability reports that generators are required to provide to Ofgem. We have also now published on the website this aggregated data for the years 2009 to 2012. They also support the original departmental estimates of wood use for electricity and show that wood demand has remained within, rather than risen above, the 1.3 to 1.6 million oven-dried tonnes per annum. As well as these specific measures covering UK wood, the Government have made a number of proposals to limit the amount of biomass power that will be brought forward. We have limited the government support that can be claimed by former coal plants until 2027 under the contracts for difference.