The confirmation of subsidy levels for biomass generators will create opportunities for firms in the Scottish forest supply sector, Energy Minister Fergus Ewing has said.
He said the Scottish Government’s decision to raise a proposed 10MW subsidy ceiling for wood-fuelled electricity generation from biomass to include projects with an installed capacity of up to 15MW would balance business opportunities for forestry managers with the need to avoid damaging native woodland.
The announcement also confirms that larger-scale generators will only receive subsidies through renewable obligations certificates if their plants act as combined heat and power (CHP) operations.
Forth Energy a partnership between Perth-based SSE and Forth Ports has plans to build CHP large-scale biomass plants at Dundee, Grangemouth and Rosyth, with the trio likely to generate a total capacity of up to 300MW of electricity and 260MW of heat if developed.
The proposals have been opposed by environmental groups, who cite likely subsidy support running to many millions of pounds and concerns over efficiency and emissions.
All three are in the consenting process, with a report on likely emissions from the proposed Dundee plant, prepared at the request of the city council, due to be released in the near future.
Mr Ewing said the Government had “consulted widely” with industry and stakeholders, and that increased initial costs would ultimately help consumers save money.
“We have made clear our concerns over competition for a finite supply of wood, and our belief that there should be a greater focus on biomass in smaller-scale energy projects wherever possible,” he said.
“We are removing support for those biomass stations over 15MW that do not provide good quality combined heat and power.
“This is a slightly higher ceiling than we had proposed, but our forecasts for additional supplies of wood in the market-place mean that new capacity which might be built will not affect existing users and indeed will create opportunities for businesses in the forest supply sector.
“Sustainable biomass provides huge opportunities for the people of Scotland jobs in construction, jobs in the plants and in the forest supply sector, reduced emissions and reduced energy bills,” he added.
“Providing the forest supply sector with new markets will also allow them to plant more trees.”
He said Scottish Government estimates suggested bills would be almost £100 cheaper by 2020 if renewables and energy efficiency measures were adopted.
“Estimates suggest the renewable obligation currently costs domestic consumers between £15 and £20 a year, and that this could rise to £53 per year by 2017 but that bills in 2020 will be £94 cheaper with renewables and energy efficiency policies than without,” Mr Ewing said.
Forth Energy said it was committed to providing CHP from “low-carbon renewable energy plants”, which would be more environmentally-friendly than fossil-fuel alternatives and generate jobs in Scotland’s communities.
“We stand alongside the Scottish Government in the belief that, when used at a larger scale, sustainably-sourced biomass fuel is best suited to the production of both heat and electricity and can play an important part in Scotland’s future energy mix,” a spokeswoman said.
“We are also confident in the additional benefits CHP plants could bring to local areas, including major economic investment and jobs.”
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