Scottish Government threatens u-turn on biomass subsidy

The Scottish Government recently published draft proposals for biomass subsidies that could potentially see Forth Energy get a financial windfall of over £170 million per year.[1]

Campaigners from Friends of the Earth Scotland and Biofuelwatch claim these proposals threaten to undermine the Scottish Government’s rhetoric to rule out subsidies for large-scale inefficient biomass plants. Forth Energy, which pulled the plug on its plan for a large-scale biomass plant in Leith, Edinburgh last week, still plans to develop large-scale biomass plants in Dundee, Grangemouth and Rosyth. It is estimated these plants would reap over £170 million a year under the new proposals.

The SNP manifesto stated that they ‘share public concerns over the large-scale schemes now being proposed in some parts of Scotland’.[2] Subsequently the Scottish Government was vocal in its criticism of large-scale biomass and launched a consultation on the matter which closed in January.[3] The proposals published ten days ago, but which are still to be finalised, would leave significant support for large-scale biomass if adopted.[4] As well as the money Forth Energy would potentially receive in subsidies from the three biomass power stations they still want to build, Peel Energy, the company that is planning a coal and biomass power station at Hunterston in Ayrshire, would potentially get over £91 million a year from co-firing biomass if their proposal got the go-ahead. 

Friends of the Earth Scotland’s Policy Officer Francis Stuart said: 

“Government rhetoric on biomass has been positive and their position to support small-scale plants for heat has been the right one. Unfortunately however, these new proposals would provide a financial windfall for large-scale inefficient biomass plants like Forth Energy’s proposals for Rosyth, Grangemouth and Dundee. Scottish Ministers needs to go back to the drawing board and come back with proposals which rule out subsidies for large-scale biomass while supporting small-scale, locally sourced, biomass for heat.”

Emilia Hanna, Biomass campaigner at Biofuelwatch, said:

“The Scottish Government publicly condemned industrial-scale electricity generation from biomass, saying it was inefficient, used an unsustainable amount of wood, and threatened jobs in traditional wood industries, yet its draft proposes to continue offering heavy subsidies to big biomass which will see big industry profit at the expense of community renewables.

“Big biomass will mean a reliance on imported wood, causing more deforestation and undermining Scotland’s efforts towards energy independence. The public knows that big biomass in greenwash. The Scottish Government must take heed and change its draft legislation.”

The Scottish Government is expected to publish its final legislation on renewables subsidies at the end of March 2012, with the legislation going to the Scottish Parliament in the summer.

NOTES

[1] Forth Energy proposals for Grangemouth, Rosyth and Dundee have a capacity of 300 MW. Power stations standard number of operating hours is 8000 hours per year. Assuming Forth Energy’s 3 plants are given the go-ahead and operate at 8000 operating hours each (300MW multiplied 8000 hours), their proposals have a total output of 2400000MWh. Under the Scottish Government’s current draft proposals developers would get 1 ROC per 0.67MWh for electricity only biomass (See the draft legislation, part 5, see page 16 of http://www.scotland.gov.uk/Resource/0038/00387104.pdf). 2400000 MWh multiplied by 0.67 gives Forth Energy 3582089.55 ROCs. Based on an average over the last 12 months, 1 ROC is currently valued at ¬£47.7 (This is according to the e-ROC Track Record: http://www.e-roc.co.uk/trackrecord.htm). 3582089.55 multiplied by 47.7 = 17086567.2. So the three remaining biomass proposals would bring in ¬£17086567.2 per year until 2017 for Forth Energy. After 2017 the subsidy regime is set to change from with ROCs being replaced with a new subsidy regime through the UK Government’s Electricity Market Reform (EMR).

2] Page 34 of SNP manifesto: http://manifesto.votesnp.com.

[3] Scottish Government press release 30 October 2011: http://www.scotland.gov.uk/News/Releases/2011/10/28105521

[4] Draft order available at: http://www.scotland.gov.uk/Resource/0038/00387104.pdf

[5] Friends of the Earth Scotland is Scotland’s leading environmental campaigning organisation, an independent Scottish charity with a network of thousands of supporters and active local groups across Scotland, part of the largest grassroots environmental network in the world, uniting over 2 million supporters, 77 national member groups, and some 5,000 local activist groups – covering every continent. www.foe-scotland.org.uk

[6] Biofuelwatch works to raise awareness of the negative impacts of industrial biofuels and bioenergy on biodiversity, human rights, food sovereignty and climate change. Based in UK and US, we work with national and international partners to expose and oppose the social and environmental damages resulting from bioenergy-driven increased demand for industrial agriculture and forestry monocultures.www.biofuelwatch.org.uk