Government announcement major step forward for biomass conversion

Shovel ready projects can meet looming capacity crunch.

Eggborough Power Limited (currently supplying 3% of UK electricity through one of the UK’s largest coal fired power stations), welcomed today’s announcement by Government on certainty for biomass conversion projects.

Eggborough Power Station currently provides enough electricity for two million customers, supports hundreds of direct jobs and thousands more across a supply chain which includes rail, ports, logistics and engineering services. Incoming environmental regulation means many coal fired stations are currently considering whether to dramatically reduce investment leading to early closure, considerable job losses across the sector and vital capacity removed from the UK electricity grid. The alternative is to inject large sums of new capital investment converting to renewable power.

Biomass conversion is a highly cost-effective way of extending the life of existing infrastructure to meet urgent energy capacity needs as evidenced by today’s Ofgem report which forecast a potential capacity margin as low as 4% by 2015.

Eggborough has been working for almost two years on plans to convert to biomass power, providing a significant economic boost to UK PLC and shoring up security of supply when it will be needed most – before the 2020s. The project is worth upwards of hundreds of millions in investment, and will safeguard over a thousand jobs, with the potential for many more across the supply chain in key industries like ports, rail and construction.

Government has consistently said biomass conversion can make a cost-effective and major contribution to renewable energy. Today’s announcement by DECC includes a voluntary reporting mechanism for biomass projects to enable Government to monitor costs to consumers, whilst also boosting certainty of support levels for investors.

Chief Executive Neil O’Hara commented:

“Ofgem’s report today shows an urgent need for shovel ready projects to keep the UK’s lights on in 2015. Today’s announcement by DECC removes one of the major barriers for biomass conversion projects like ours, which is now one step closer to making a significant contribution to energy security, growth and jobs, and renewable power”

“With plant infrastructure already in place and ready to be converted, these projects offer a realistic and timely contribution to the capacity crunch looming for the UK in 2015.”