A Very British Biomass CHP Issue
Dr Dan Wright, EBRI Research Associate asks why Britain is so far behind the rest of Europe when it comes to biomass heat generation through combined heat and power (CHP).
The British are very good at drinking tea, believing we will win the World Cup or European Cup every two years and complaining about the weather. We are also responsible for some important technological advances in energy, such as the steam engine and turbine. In addition to these, the commonly utilised unit to measure energy is named after the British physicist James Prescott Joule. However, when it comes to biomass heat generation, especially in the case of combined heat and power (CHP), we are somewhat the laggards of Europe. With Eurostat (2009) showing that the UK had the lowest level of renewable heat production, despite the fact that over approximately 50% of the country’s primary energy consumption is for heating purposes (incl. transport) (DECC, 2012). Furthermore, a recent report (DUKES, 2012) only reported a meagre 1% growth over the past 12 months and this was largely for natural gas systems.
Why are we so far behind our European neighbours, I hear you cry? There are several key, largely non-technical, barriers cited as to why we are struggling to deploy this highly efficient low carbon technology. The UK has benefited for many years from an abundant and low cost incumbent; North Sea natural gas reserves. Not only has this directly restricted the deployment of district heating networks (DHNs), it has also been the root cause of several indirect barriers that now restrict our ability to exploit the possible benefits of DHNs, such as: a lack of expertise and advisory personnel; very high retrofitting costs and a lack of a standardised procedure; and an array of negative, mostly habitual, end-user perceptions. Adding to this the need for long and secure heat off-take contracts to de-risk the lender’s exposure as it is possible that all your heat users could relocate (although unlikely, this has been said by a financier).
It isn’t all doom and gloom – unlike our weather. Biomass CHP systems economically make sense when a significant proportion of the heat can be used for space heating or hot water purposes. Furthermore, CHP systems are fuel type agnostic, we have just typically chosen to go with the low cost incumbent but this mentality is changing for two main reasons: the low cost incumbent isn’t that low cost anymore, as the average gas price for non-domestic customers has doubled in the past 8 years (DUKES, 2012), and; the current incentives for ‘renewable’ heat production and the proposed rate increases specifically for biomass CHP schemes economically improve the competitiveness of biomass. Moreover, within EBRI, we are working to further level the playing field by developing economic and risk management tools to support biomass CHP project development in the UK and within our partner regions.