Fortum to operate and maintain Tees Renewable Energy plant in UK

Published 17 August 2016

Fortum has signed a 10-year deal with MGT Teesside for operation and maintenance (O&M) of 299 MW biomass-fired combined heat and power plant to be located in North-East England.

The construction of the power plant is due to start immediately and be completed by 2020.

“This significant O&M agreement is well in line with our vision to be the forerunner in clean energy. Fortum has long experience on biomass-fired combined heat and power plants. We are happy to give our customers access to our expertise by providing O&M services and that way support the increase of renewable energy production in the UK,” says Antti Malve, Head of Sales, Expertise Sales, Fortum.

“We are happy to start co-operation with Fortum in our project. Fortum can offer us a world-class operation and maintenance concept and valuable experience as an owner and operator of biomass-fired power plants,” says Ben Elsworth, CEO of MGT Teesside.

The parties have agreed that they will not disclose the value of the agreement.

Fortum is a significant user of biomass in its own operations in Finland, Sweden, the Baltic countries and Poland. In 2015, altogether 5.1 TWh of biomass (2.6 million m3) was used in Fortum’s power and heat plants. Biomass accounts for one fourth of Fortum’s heating fuels in the EU area.

For Fortum the Teesside agreement means continuation of a long history of O&M services in the UK. Prior to this agreement Fortum has been involved in 13 different O&M contracts in the country.

Source: Company Press Release

Future of Scotland’s renewable energy industry ‘at risk’

The future growth of Scotland’s flagship renewables industry could be choked off by swingeing subsidy cuts from Westminster, a committee of MPs has warned.

An estimated 21,000 people now work in the green energy sector north of the Border, which produces almost 30 per cent of the UK’s renewable electricity.

Environmentalists hit out when the UK government announced an end to lucrative subsidies for onshore windfarms last year.

The Scottish Affairs ­Committee has today ­published a report into the renewable energy sector in Scotland which warns that its successes could now be undermined by changes to UK ­government policy.

“We have urged the government to clarify the future ­support which will be available to the renewable sector, and set out how they will work with the Scottish Government to develop a clear, long-term plan that will allow renewable energy to remain a central part of the energy mix,” committee chairman Pete Wishart said.

But the report points to “serious concerns” among many Scottish residents about the impact of onshore wind ­turbines on the environment.

Graham Lang, chairman of anti-turbine alliance ­Scotland Against Spin, said: “It vindicates the thousands of Scots who are opposed to the unlimited expansion of onshore wind farms.’

There has been “significant growth” in renewables in ­Scotland with electricity production from sources as diverse as wind, hydro and biomass attracting significant investment, the report finds.

Mr Wishart said policy changes by the UK government have “weakened investor confidence in the renewable sector, and put at risk opportunities for future growth.”

A spokesman for the new Department for Business, Energy and Industrial Strategy said UK government support has helped the success of Scotland’s renewables.

He added; “We’ve been completely clear that our commitment to the industry will continue with the announced £730 million funding package for future renewable energy projects.”

GE to Highlight Solutions for Turning Waste to Energy at UK AD & Biogas Conference

TREVOSE, PA.-July 5, 2016-GE (NYSE: GE) will showcase its waste-to-energy technologies, products and services designed to help the food waste industry enhance recovery from its anaerobic digestion (AD) facilities at the UK AD & Biogas conference.GE will be exhibiting at stand K205 at the UK AD & Biogas conference July 6-7 at the National Exhibition Centre in Birmingham, West Midlands. The show brings together the world's leading technology and product suppliers under one roof. GE will feature the products that optimize biosolids and biowaste AD facilities from the reception floor to renewable energy.Highlights of GE's technology portfolio that will be on display at the conference include:Re:Sep* pretreatment separates packaging, contaminants and grit to generate a clean organic slurry. The Re:Sep process can receive a wide variety of waste streams and separate the organics with high efficiency into a clean organic slurry and a separate reject contamination stream resulting in the perfect feed substrate for AD.Hydrolysis Pasteurization Digestion achieves high-efficiency conversion of food waste to biogas yielding high biogas yields, stabilized digestate, shorter retention times and lower carbon footprint.AD technologyis designed to recycle biosolids and biowaste into methane and valuable byproducts. GE's Monsal* AD technologies use bacteria in the absence of oxygen to break down matter to create biogas. The biogas can be combusted or oxidized and used for heating or with a gas engine to produce electricity and heat. It also can be compressed and used as fuel for vehicles or as a fertilizer.Digestion products-From mixing systems to heat exchanges to sludge treatment, GE's digestion products work in concert to provide a holistic solution that takes anaerobic treatment to a new level. GE's digestion products achieve optimal energy balance to maximize system yield and performance.Jenbacher* gas engines achieve efficient energy conversion for converting biogas into power and heat.About GEGE (NYSE: GE) is the world's Digital Industrial Company, transforming industry with software-defined machines and solutions that are connected, responsive and predictive. GE is organized around a global exchange of knowledge, the 'GE Store,' through which each business shares and accesses the same technology, markets, structure and intellect. Each invention further fuels innovation and application across our industrial sectors. With people, services, technology and scale, GE delivers better outcomes for customers by speaking the language of industry. GE PowerGE Power is a world leader in power generation with deep domain expertise to help customers deliver electricity from a wide spectrum of fuel sources. We are transforming the electricity industry with the digital power plant, the world's largest and most efficient gas turbine, full balance of plant, upgrade and service solutions as well as our data-leveraging software. Our innovative technologies and digital offerings help make power more affordable, reliable, accessible and sustainable.For more information, visit the company's website at Follow GE Power and GE's water business on Twitter @GE_Power and @GE_Water and on LinkedIn at GE Power.* Trademark of General Electric Company; may be registered in one or more countries.GE - General Electric Company published this content on 05 July 2016 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 05 July 2016 16:25:06 UTC.Original document

Will biomass CHP be side-lined under CfD?

Unlike many other renewables it’s a base load solution - not dependent on sun and wind - and we have a plentiful supply of waste wood in the UK which needs to be recycled in one way or another. Landfill isn’t an option.

But as we move from the Renewable Obligation Certificate (ROC) scheme with the Renewable Heat Incentive (RHI) to Contracts for Difference (CfD) it looks like biomass renewables may be getting side-lined in the bid for subsidies. That can’t be good.

So what are CFDs?

As part of the government’s electricity market reforms to increase the percentage of energy from renewable sources and to reduce carbon emissions, a new system of long term contracts in the form of CfD has been introduced to replace the earlier ROC scheme. The purpose is to incentivise investments in new low-carbon electricity generation in the UK by providing stability and predictability to future revenue streams for investors.

Under the scheme electricity generators will bid for and enter into CfDs with the Low Carbon Contracts Company (LLCC) a government-owned business which will manage the contract. This will enable a generator to stabilise its revenues at a pre-agreed level (the Strike Price) for the duration of the contract. The whole idea is to subsidise and encourage investment by reducing a generator’s exposure to volatile wholesale prices and at the same time protect consumers from overpayment.

Albeit somewhat complicated as these things tend to be, it sounds good so far, at least on paper, providing it leads to an equitable framework of support to all renewables to ensure we achieve a desirable balanced energy mix.

We are currently transitioning from ROCs, which will finally close to new projects on 31 March 2017, subject to some grace period arrangements. From that point generators will be required to bid for CfD funding in competitive auctions for millions in annual government funding, split across three pots:

  1. established technologies such as onshore wind and solar
  2. less established technologies including offshore wind and biomass CHP
  3. biomass conversion

First CfD auctions

The first CfD auction round took place earlier this year and the early signs already are that onshore wind will dominate to the exclusion of biomass CHP, smothered by a process that appears to favour big business. If solar PV fared poorly, biomass CHP was worse.

Of the 27 renewable energy contracts awarded five were waste-related. This included three advanced conversion technology (ACT) or gasification projects and two energy-from-waste projects. But the Pot 2 allocation was totally dominated by two offshore wind projects totalling 1,162MWe and it meant that no CfDs were awarded to biomass CHP projects which were effectively squeezed. It was also notable that budget wasn’t allocated for Pot 3 biomass conversion projects at this stage.

Negative signals

Already this is sending a signal to potential investors who will be unwilling to invest time, energy and capital in planning potential biomass investments if the CfD process remains unsupportive. This is despite the fact that biomass CHP utilising domestic virgin and waste wood is an excellent way of generating local electricity and heat, and one that is far more efficient than electricity generation on its own.

What’s more, UK waste wood is an abundant resource. An estimated 10 million tonnes are produced every year, including forestry residues and other sources. By contrast, a typical medium sized CHP plant can convert 6,000 to 80,000 tonnes of British waste wood (including grades A, B & C, forest thinnings, stumps and bark) and other low quality waste wood into 170,000MWhr of renewable thermal energy, each year. Currently it’s a resource we are squandering - much of it exported to the benefit of biomass projects in Northern Europe.

According to Dr Tim Rotheray, director of the Association of Decentralised Energy, “the design of the (CfD) scheme currently makes biomass CHP near-uninvestable.”

Part of the reason is that biomass CHP is dependent on its heat consumer. Under the RO scheme if a CHP plant lost its heat consumer it would continue to receive some subsidies as a renewable electricity producer. Under CfDs all support for both renewable electricity and heat drops to zero if the heat consumer moves away.

The picture may change once the next budget allocations are made and the next round of auctions takes place, but we are already seeing delays here, and therefore further uncertainty. The way funding is split into different competing pots isn’t helping.

Of course, of the 27 projects that secured contracts in the first round it’s going to be very interesting to see how many of these were realistic auction bids and whether they can in turn progress these from paper to real projects, in terms of financing at least, when the 12 month deadline to submit their Milestone Requirements Notice is up.

Even before the CfD scheme, which now forces competing technologies to bid for funding, attracting the right investment to carry projects forward was challenging. It’s not that investors aren’t hungry to invest. As a provider of both fuel handling and combustion solutions for biomass CHP we spend our time talking to almost as many interested investors as we do project owners.

They look predominantly for proven technology, certainty over fuel supply, planning consents, grid connections, heat consumers and a robust procurement method. With all these lined up projects have a good chance of proceeding, but not if government contracts are only available through an unbalanced auction system that pitches competing technologies unfavourably against each other.

So what’s to be done?

Either we continue down the route we seem to be taking and, in the process, ignore the goal of a balanced energy economy and the benefits of waste wood biomass solutions, or tweaks to the CfD are introduced to make it more open to smaller, independent generators as well as big business.

Government support to make it easier, not more difficult, is what will make a difference.

Matt Drew Saxlund MD

Matt Drew, managing director, Saxlund