Interview: CO2 floor reform will not deter UK waste-to-energy

13 March 2014 12:48 Source:ICIS

Any reforms to UK carbon price support will not prevent plants that convert waste to clean gas for on-site electricity generation rolling out on a commercial scale, according to an industry expert.

Rolf Stein, chief executive of Advanced Plasma Power (APP), a British company developing the technology, said waste-to-energy price competitiveness against other forms of waste disposal and power generation gives it a head start in the renewables sector.

Stein foresees waste-to-energy being able to add up to 2GW of power to baseload margins in the long run, equivalent to roughly 6% of the UK’s electricity requirements.

He estimated demand far in excess of 100 full-scale plants exists, based on annual levels of waste entering landfill. Each would be capable of producing 17MW of electricity and approximately 20MW of exportable heat.

“Landfill capacity is declining and it’s very expensive to landfill,” said Stein. “As long as we can be competitive with the other options which we most definitely are, that’s the real driver here.”

Stein said APP’s technology can also compete with carbon-based fuels on a level footing.

Commercialisation of APP’s technology is set to take a significant step forward this summer, when construction is due to begin on a 7MW plant in Tyseley, Birmingham, pending funding being secured from the UK’s Energy Technologies Institute (ETI), in which the government is a 50% stakeholder.

“Once it gets over that commercialisation hurdle, we will be able to compete without subsidy with other brown sources of electricity. That can’t be said for all renewables,” Stein said.

Government role

Stein said it is the government-backed ETI’s funding of APP’s technology that could be the catalyst for it to take off.

“Maybe, the decision itself will give people sufficient confidence to look more seriously and to begin development work on projects earlier than otherwise would have been the case,” he said.

“There’s an outside chance it might even give people the confidence to buy the technology before the Tyseley project is built out.”

Stein said there is enough support available from the UK government for the waste-to-energy sector and that criticism from some quarters is unmerited, citing the landfill tax as one policy that has made APP’s enterprise profitable by driving away waste from landfill.

Stein also said the government’s strategy regarding contract for differences and feed-in-tariffs under electricity market reform is well-directed and regards the strike price for advanced thermal conversion generation, set at £155 (€185)/MWh for 2014/15 falling to £140/MWh by 2017/18, as fair.

Setting strike prices for numerous variations of low-carbon power generation technologies has been a delicate game for the Department of Energy and Climate Change. So far, much has been made of biomass and offshore wind subsidies, with both technologies set to make up a large proportion of the UK’s renewables capacity.

“We [the UK] remain pegged to offshore wind, which is fine; I think it works,” Stein said. “There will be a decrease in that level of support as there should be as the technology is more widely adopted and becomes more mature.”

On the dedicated biomass front, the government’s support was questioned only last week after a project developer pulled the plug on a 100MW biomass-fired electricity plant, claiming that “inconsistent support for dedicated biomass energy over the last two years” had undermined the investment case ( see EDEM 6 March 2014 ).

On a broader level, the government’s financial aid for renewables has come under scrutiny from the EU, most recently when it was revealed that the European Commission has launched a preliminary investigation into the legality of state aid involvement in the conversion of Drax’s coal-fired units to biomass ( see EDEM 25 February 2014 ). Henry Evans

By Henry Evans