Re g ula tory Drive rs for Bioma ss in the Unite d King dom BRE A - PowerPoint PPT Presentation

Re g ula tory Drive rs for Bioma ss in the Unite d King dom BRE A 2016 Inte rna tiona l Confe re nc e a nd E xposition Pa ne l Disc ussion F rida y, 11 Nove mbe r 2016 8:30 AM Pre se nte rs: T o dd K e rsc hb a um - V.P. Pro je c t De ve lo pme nt - Po we r, Sta nte c

UK Re ne wa b le E ne rg y Dire c tive – I ssue d b y the g o ve rnme nt in 2009 Compone nts of the UK’s prog ra m: F ue l dive rsific a tio n fro m fo ssil fue ls • Se c urity o f e ne rg y supplie s in the UK • I nve stme nt in ne w te c hno lo g ie s a nd industrie s • Use a wide ra ng e o f le ve rs to de c a rb o nize the e c o no my • Ob ta in 15% re ne wa b le g e ne ra tio n re so urc e s b y 2020 • F und sub sidie s thro ug h the Clima te Cha ng e L e vy (CCL ) •

UK F ra me wo rk fo r a c tio n T hre e ke y c ompone nts:  F ina nc ia l suppo rt fo r re ne wa b le s;  Unb lo c king b a rrie rs to de live ry; a nd  De ve lo ping e me rg ing te c hno lo g ie s

So me o f the Pla ye rs (b e fo re Bre xit) E urope a n E U Dire c tive s e .g . Union UK Gove rnme nt Re ne wa ble E ne rg y Dire c tive (E U) 2009 De pt. E ne rg y & Offic e Ga s a nd HM Re ve nue & Gre e n Clima te Cha ng e E le c tric ity Customs Inve stme nt Ba nk ( DE CC is no w the De pt. Ma rke ts of Busine ss, E ne r gy & (GIB) (HMRC) (OfGE M) Industr ial Str ate gy ) Se t up to a ttra c t Pro te c ts c usto me rs & E nsuring e ne rg y is: Ma na g e s L a ndfill ta x priva te funds a nd de live rs Go ve rnme nt Se c ure & re silie nt • “pump prime ” Cle a n & susta ina b le pro g ra mme s • Affo rda b le • Prime F unc tions

UK Re ne wa b le s Ma rke t E ig ht T e c hnolog ie s = 90% ta rg e t 2020 UK Re ne wa ble E ne rg y T a rg e t T ota l 216 to 225 T WH F e e dstoc k Pla ye rs Big E ne rg y Compa nie s e tc Virg in Ma te ria l: Wood • Stra w • MWH Proje c ts Wa ste Compa nie s Crops • 5 to 25 MWe De ve lope rs Wa ste Wood RDF & simila r Industry 3rd Annua l E uro pe a n Re ne wa b le E ne rg y Pro je c t F ina nc e Co nfe re nc e 2014, L o ndo n

F ina nc ia l Suppo rt fo r Re ne wa b le s • Ce rta inty o f Pa yme nts o f Re ne wa b le Ope ra ting Cre dits (ROCs) F o r e le c tric ity, inc e ntive pa yme nts mo nie s c o me o ut o f the L e vy Co ntro l • F ra me wo rk (L CF ) b udg e t whic h is a utho rize d a nnua lly Allo ws fo r third pa rty o wne rship • • Allo ws fo r third pa rty funding • Pro vide s c a pita l inve stme nt, jo b s a nd g re e n g e ne ra tio n a sse ts in the ne xt te n ye a rs to re pla c e a g ing g e ne ra tio ns a sse ts

Ob je c tive s o f ROC inc e ntive s Inc e ntive Me c ha nisms ha ve :  Re duc e d c o sts o ve r time fo r a ll te c hno lo g ie s  E nc o ura g e d inno va tio ns b o th te c hnic a l a nd fina nc ia l  Stimula te d e mplo yme nt in the UK re ne wa b le s se c to r  E nsure d the UK will me e t its 2020 ta rg e ts fo r the re ne wa b le po we r

De ve lo pme nt o f I nc e ntive Me c ha nisms • E a c h re ne wa b le te c hno lo g y g o t sa me inc e ntive , this fa vo ure d e sta b lishe d te c hno lo g ie s a nd did no t drive the ma rke t fo rwa rd. • Me c ha nism simply furthe r re wa rde d the sta tus q uo Orig ina l ROCs • Re vie we d in 2003 to 2006 le a ding to a me nde d ROCs, se e b e lo w 2002 • Ba nding intro duc e d whe re b y le ss e sta b lishe d te c hno lo g ie s re c e ive mo re inc e ntive s a nd vic e ve rsa • Ste e rs industry to wa rds inve stme nt in le ss we ll de ve lo pe d te c hno lo g ie s, impro ving the “mix” c o ntrib uting to the o ve ra ll re ne wa b le s ta rg e t Ame nde d • I nc e ntive s fo r e a c h te c hno lo g y re duc e d o ve r time in a ntic ipa tio n o f c o st re duc tio n & e ffic ie nc ie s. ROCs • Sc he me c lo se s a fte r Ma rc h 2017 2009 •As pa rt o f the E ne rg y Ma rke t Re fo rm (E MR) the Re ne wa b le Ope ra ting Cre dits (ROCs) a re b e ing pha se d o ut a nd re pla c e d b y a F e e d in T a riff tha t o pe ra te s o n a Co ntra c ts fo r Diffe re nc e b a sis (CfDs) •T his c ha ng e to o k the o ppo rtunity to mo dify so me o f the ROCs te rms, whic h so me c o nside re d o ve r g e ne ro us. •T he ne w CfD a ppro a c h a lso a pplie s to nuc le a r po we r E MR & CfDs •T he CfDs a re a llo c a te d b y a uc tio n o n c a 12 to 18 mo nth inte rva ls intro duc ing a c o mpe titio n e le me nt 2017

Re ne wa b le Ope ra ting Cre dits (ROCs) pa yme nts Unde r the ROCs re g ime g e ne ra to rs we re pa id a t a ra te o f: Pa yme nt pe r MWh e xporte d = AxB + C Whe re A = b a nding multiplie r fo r the te c hno lo g y in q ue stio n B = va lue o f a ROC a t the time in q ue stio n, the se a re a tra de d e ntity C = va lue o f e le c tric ity a t the time in q ue stio n, Ma rke t Re fe re nc e Pric e F o r wa ste wo o d g a sific a tio n pro je c ts, a c c re dite d b e fo re Ma rc h 2016 A = 2, B fo r April 2016 wa s ~ £41.80/ MWh a nd C wa s ~ £45/ MWh T he re fore pa yme nt pe r MWh e xporte d = £128.60, 20 ye a r te rm Compa re this with the CfD a uc tion strike pric e s in F e brua ry 2015 of £114 to • £120MWh, for g a sific a tion, 15 ye a r te rm

Unlo c king b a rrie rs to de live ry • Simplify E nviro nme nta l Appro va ls • Use e xisting e nviro nme nta l sta nda rds • L o c a l c o nse nt fo r pla nning a ppro va ls • Sta nda rd T e rms fo r Grid c o ntra c ts fo r inte rc o nne c tio n with e le c tric distrib utio n c o mpa nie s • OF GE M c e rtific a tio n a nd mo nito ring o f ROC’ s • Re ve nue b a c ke d b y lo ng te rm c o ntra c ts (15 -20 ye a rs)

Ove rsig ht o f ROC Susta ina b ility Guide line s a dministe re d b y OF GE M • F ue l c la ssific a tio n • L a nd Crite ria • GHG c rite ria • Ma ss b a la nc e (inc luding supply c ha in) https:/ / www.o fg e m.g o v.uk/ pub lic a tio ns-a nd-upda te s/ uk-so lid- a nd-g a se o us-b io ma ss-c a rb o n-c a lc ula to r

Pro mo te d de ve lo ping e me rg ing te c hno lo g ie s Adva nc e d T he rma l T e c hno lo g y • Ga sific a tio n • Pyro lysis • Pla sma / Hydro g e n Syng a s • Co mb ine d He a t & Po we r • Othe r c o ntro lle d the rma l pro c e ss • a pplic a tio ns

Suc c e ssful Prog ra m in the UK (E xisting a nd Pla nne d Bioma ss Proje c ts E xc e e ding 5 Mwe ) Bla c k =Ope ra ting Pla nts • Re d =Appro ve d Pro je c ts • Ye llow =Pro po se d Pro je c ts • Ora ng e =Pro je c ts in • Adva nc e Pla nning http://www.biofuelwatch.org.uk/wp ‐ content/maps/uk ‐ biomass.html

Sta nte c / MWH… Whe re we a re 1500+ PE OPL E 57 350K+MW OF F ICE S POWE R DE L IVE RE D 50M+ F IE L D HOURS

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Re ne wa b le E ne rg y E xpe rie nc e Bio ma ss, So la r, Wind, E ne rg y Sto ra g e , L a ndfill Ga s We Provide Expertise in Renewable Energy

Ac tive “Sma ll” Pro je c ts in the Unite d K ing do m- T yse le y & We lla nd 10 MW po we r pro duc tio n • F ue l is c o nstruc tio n wa ste wo o d a nd fib re b o a rd dive rte d fro m la ndfill • De plo ying Ne xte rra upflo w g a sific a tio n te c hno lo g y • Pro duc e s po we r e q ua l to c irc a 17,000 lo c a l ho me s • Circ a £50m c a pita l inve stme nt • 100 c o nstruc tio n jo b s a nd 19 full time jo b s • UK a c c e pte d a s c a rb o n ne utra l pla nts •

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T o dd.K e rsc hb a um@ Sta nte c .c o m Andre w.Hutc hinso n@ Sta nte c .c o m T ha nk Re fe re nc e site s: www.mwhc o nstruc to rs.c o m You! www.sta nte c .c o m www.c o g e nuk.c o m