Select Committee on Trade and Industry Appendices to the Minutes of Evidence


APPENDIX 37

Memorandum by British BioGen

THE BIOENERGY CONTRIBUTION

  As a renewable carbon fuel, biomass, unlike other types of renewable energy, can be moved around and stored and may be commercially processed into a range of fuel products, including wood chip, pellets, bio-oil, biogas, methanol, ethanol and potentially hydrogen (for fuel cells) or even A-1 Jet Fuel. This makes bioenergy complementary to other, intermittent renewables and gives it a central role in an integrated and diverse renewable energy supply system. Bioenergy can be located where it is needed, fitting into the existing electricity distribution network. Bioenergy can generate as and when required with a high degree of reliability, which is particularly important under the new electricity trading arrangements. The scale potential of the biomass resource means that bioenergy can make a significant contribution to UK energy supply across all those markets currently served by fossil fuels—electricity, combined heat and power, industrial and domestic heat and transport fuel—utilising home-grown sources.

  Bioenergy projects are relatively small-scale, usually supplying electricity to distribution networks, below the regional connection to the national grid, as embedded generation. As well as limiting the cost and environmental impact of fuel transportation, generating locally has significant advantages in avoiding energy losses in long transmission lines and in reducing or avoiding the costs of reinforcing or upgrading electricity distribution systems. Smaller scale plants in a dispersed system also make less opportune targets for attack and disruption is more easily contained.

  The resource is substantial and comes in many forms; co-products from food production alone such as straw, waste vegetables and processing bi-products (starches and fibres) amount to nearly 30 million tonnes. Our timber industry harvests 10 million tonnes annually producing over five million tonnes of co-products. These resources are particularly suitable for electricity generation and bio-ethanol production. There is a real interest from oil and car companies to utilise bio-ethanol as a blending ingredient for petrol for largely environmental reasons. To place this resource potential into context—four million tonnes of biomass could today replace 10 per cent of total UK petrol demand with no modifications to distribution infrastructure or cars.

  Furthermore, a considerable amount of biomass enters the so-called waste stream—whether from household food waste or from garden/arboricultural arisings. Current estimates of this resource are in the range 20-30 million tonnes annually. Again, this resource can be used for transport fuel or for electricity/heat production.

  Historically agriculture and forestry provided most of our energy and as fossil resources become more difficult to access they will again have to rise to the challenge. The total UK farmed area is 18 million Ha with wheat production the most important crop, utilising about two million Ha from which we also get 12 million tonnes of straw co-product. As well as the co-products dedicated energy crops have substantial potential, discussions with the CLA and the NFU suggests that an estimate of land potential for energy cropping of between 25-30 per cent by 2020 is appropriate and probably conservative. If we take as a working assumption that five million Ha of agricultural land will be available for this purpose (this figure also consistent with ETSU estimates) this could produce nearly 200 Twh of electricity or more than 50 per cent of current consumption.

  The industry is in its formative stages but growing fast—it is already the most important renewable in the UK energy mix with biomass heating competitive with most fossil fuels. The conversion technologies are developing fast and range through combustion, gasification, pyrolysis and various novel bio-processing methods.

  To summarise, bioenergy is indigenous, renewable and can replace all the current energy functions performed by external fossil sources. Its realisation is small scale and dispersed—and being fuel based, predictable. It can work in combination with other fossil fuels including petrol, diesel, coal and gas.

POLICY ISSUES

  The bioenergy industry is poised to engage with the UK energy market in a significant way. This contribution could be considerably increased with a modest shift in land use and the reclassification of all the substantial biomass streams entering the UK economy as biofuel resources instead of wastes, thus realising the substantial potential of bioenergy to provide a variety of secure fuels with the added benefit of reduced greenhouse gas emissions. There is a major opportunity for Government to engage in the reform of UK and European agriculture and to create a self-sustaining rural economy, containing the drift to external sources of carbon fuels.

  The creation of a renewable fuels resource base will have a positive effect on UK emissions and reduce external dependency. Market entry barriers are however formidable. These can emanate from the dominance of scale such as the transportation fuel markets or structural as is the case of electricity generation where the value of local generation is not recognised by the market. There is a clear need for Government intervention to assist industry in its early development.

Required Policy Responses

  Overarching Policy

    —  Government to recognise that bioenergy is a big idea, which requires a co-ordinated policy with the attention of a political champion and an overall direction and co-ordination of policy across all relevant ministries to ensure that resource development and market development go hand in hand.

  Trade Policy

    —  Market stimulation initiatives are required in the heat, electricity generation and transportation markets;

    —  the ongoing structural reform of the electricity generation market needs to increase the value of embedded generation.

  Environmental/Waste Policy

    —  The barriers to the accessibility and productive utilisation of biomass resource streams from the so-called "waste sector" need to be removed;

    —  re-orientate policy to focus on resource productivity as a key driver.

  Agricultural Policy

    —  to place bioenergy at the centre of CAP reform and conceptualise it as part of the solution to the Government's objective of a more robust and less subsidy-driven agriculture.

  Planning Policy

  This is the biggest barrier to renewables development generally. This issue will have to be confronted both in terms of fundamental structural reform of the planning system and positive advice and promotion of renewables contribution to a "living working countryside" which is delivering environmental benefits and energy security to be enjoyed by all.


 
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