Member News
By Anne McGuire MP - 16th March 2011
Last week's announcement on the Renewable Heat Incentive was an attempt to turn attention to decarbonising the heat sector. However, it has serious ramifications for the forest industries, introducing another incentive for biomass energy generation – largely produced from wood in the UK.
As chair of the all-party group for the Wood Panel Industry, I am well aware of the distortion that biomass subsidies are causing to the UK’s wood market, where supply is already struggling to meet demand. The wood panel industry produces two-thirds of the UK’s consumption of wood-based panels – chipboard, MDF and oriented strand board – wholly using UK-sourced, sustainable wood, both virgin and recycled.
The decision to exclude the wood panel sector's existing renewable heat capacity – responsible for a third of all UK industrial renewable heat – is a mistake because it will further undermine that industry's ability to buy wood. It will also threaten its existing renewable heat generation, based on its own process residues. DECC clearly has not taken concerns about wood sustainability seriously, as the RHI's Impact Assessment did not even mention potential impacts on the forest industries.
Biomass is unlike most renewable energy technologies because it has ongoing fuel costs and competes with an established market for its feedstock. Whereas an incentive for wind power principally discriminates against an equivalent fossil fuel energy generator, an incentive for biomass discriminates against industries that make excellent use of the same raw material (wood), turning it into low-carbon construction products and locking carbon up, often for decades. Therefore, the case for supporting biomass energy must be based on the highest possible environmental gains.
However, the government continues to provide substantial subsidies, through the Renewables Obligation (RO), for the large-scale generation of electricity from wood. This is a notoriously inefficient process, where over two-thirds of the energy is wasted, much through heat loss. Large biomass plants also consume vast quantities of wood. The Prenergy Plant being built at Port Talbot will consume around 3 million tonnes of wood a year – over a quarter of the UK’s entire annual wood harvest.
The government's response has been that other wood streams are available to support biomass energy growth, such as waste wood, brash and other peripheral material. If this material is feasible for bioenergy, why are the financial support mechanisms not geared specifically to incentivise their use? The introduction of the RHI without a serious impact assessment on wood processing suggests that DECC is in denial about the sustainability of the domestic and global biomass resource.
The best way to end market distortion and to achieve the best environmental outcomes is to end support for electricity only generation from wood and exclusively support good quality combined heat and power, heat generation and energy from low-grade wood waste. This would ensure high energy efficiencies, it would protect wood recycling, and it would reduce landfill. It would also greatly reduce the impact on wood processors, who play a vital role in carbon abatement through the manufacture and recycling of low-carbon, sustainable construction and furniture materials.
Anne McGuire has been Labour MP for Stirling since 2005. Parliamentary private secretary to Labour Party leader Ed Miliband, in 2010 she was elected unopposed to the public accounts committee.
Article Comments
Further to my last comment. I am in complete agreement about the comments on large scale biomass power stations. It is a dreadful waste of a renewable but limited resource and should never have been approved. All are relying on imported biomass rather than UK wood, but for how long will this be available? Much better to follow the Danish model of community scale CHP plants of 5 - 10MWe where the heat is used in local district heating and cooling.
But Anne McGuire, almost all those big biomass power stations around our coast were approved by the previous Labour Government. Where were you then?
Andrew Tolfts
17th Mar 2011 at 12:07 pm
I have very limited sympathy for the board mills. They have taken full advantage of their dominant market position over the last 25 years. Despite a recent recpvery in prices, probably due to wood fuel demand, in real terms standing timber prices are still half of what they were 25 years ago (FC standing sales index for 2010). It has not been possible for woodland owners (including the FC which we all own) to harvest timber profitably so woodlands have been left unmanaged with consequent impacts on biodiversity values and the people who work in the forestry sector. Why do you think we have consistenmtly failed to meet planting targets set by governments in all parts of the UK?
As a result of woodfuel demand timber prices are rising across Europe, from Scandinavia to Germany and Austria. Britain is no different in this respect to other countries. Its a new world and the panel mills must get used to it.
If prices rise and more woodlands are managed there are huge gains in the non-market public benefits that woodlands deliver. And woodland owners might be able to make a living.
Andrew Tolfts
17th Mar 2011 at 11:59 am
Have your say...
Please enter your comments below.