News, Events & Industry Insights

Home>News>Company>2013>Jun

On- or off-site generation?

Richard Robey, sales and marketing director at Haven Power discusses the benefits to businesses of using biomass generated electricity as an off-site renewable energy solution.

Sustainability and renewable energy continues to be on top of the political agenda. More businesses than ever are becoming aware of the pressures being put on them to comply with environmental targets. In a report carried out by the Economist Intelligence Unit, 61 percent of businesses said that renewable energy will be ‘highly significant’ to their business strategy in three years’ time.

This may happen sooner than predicted, and businesses therefore need to be aware of the options available to them to ensure their energy strategy is as environmentally responsible as possible.

A business may look at onsite renewable power generation using technologies such as photovoltaic or wind. These methods are great for long term cost-saving with initiatives such as the FiT scheme incentivising businesses to install small scale (less than 5MW) electricity generating technologies. However, the power that is produced by these methods is intermittent as they depend on relatively unpredictable environmental factors such as sun or wind being available in order to generate power.

The simpler option is for businesses to purchase renewable electricity through a supplier such as Haven, in exactly the same way they have procured conventional electricity in the past. This solution is a simpler option for businesses with less disruption to premises, lower administration and maintenance and also offers a greater reliability of supply, something that onsite generation may not. Businesses which are subject to the Climate Change Levy will be pleased to hear that the electricity generated at Drax using biomass does not attract Levy Exemption Certificates and so reduces exposure to the Climate Change Levy.

For large businesses long-term security of supply is a key concern. This is where biomass generation steps into the spotlight. The long-awaited announcement by Ed Davey, Secretary of State for Energy and Climate Change, on the Renewables Obligation banding levels last year confirmed that 1.0 ROC/MWh will now be awarded for existing generating units that are fully converted to burn biomass. This was the support that our parent company, Drax was waiting for, and means that its plans to fully convert three of its six generating units to run on sustainable biomass within the next few years can go ahead. In fact, the first unit’s conversion has already been completed, with the second due to be converted by the end of the year.

Biomass has long been championed as ‘the fourth energy source’ and in fact, for years it provided more renewable electricity in the UK than any other renewable source. Electricity generation from biomass is an essential part of the renewable energy mix because it is low cost, low carbon and reliable. Importantly, biomass-fired generation is also flexible as it can respond quickly to changes in electricity demand on the National Grid.

A report recently released by Deloitte adds further weight to the argument that biomass is key to helping the UK meet carbon emission targets. The report confirms that converting old fossil fuel power plants to run on biomass could provide ‘reliable generation’ of energy supply .

In addition, DECC endorses the use of biomass as part of the UK’s energy mix within its UK Renewable Energy Roadmap, saying that around 30 percent of the country’s total renewable energy in 2020 could come from biomass heat and electricity.

However, the reliability of biomass generation is already gaining supporters, as it becomes a popular solution for businesses not wanting onsite renewable generation but still requiring a sustainable energy option to reduce their CO₂ emissions. We are also seeing some business customers looking to procure biomass power supply arrangements from their electricity supplier to supplement their onsite generation capabilities.

Sustainability of biomass is of course critical and all of Drax’s biomass is from sustainable sources. Drax monitors and controls its whole biomass supply chain to ensure that sustainability criteria are met.

As Drax’s supply arm, Haven is certainly seeing more customers requesting electricity generated from biomass than ever before. And, thanks to the Government’s support for Drax’s plans, we are well-placed to offer our customers a secure supply of renewable electricity now and in the future.

Procuring electricity generated from biomass is not going to solve the UK’s renewable energy conundrum alone – a mix of renewable energy sources are needed – but what it will do is provide a cost effective, reliable and realistic option to businesses (of any size) that are looking for renewable energy options and in turn helping the UK to meet its 2020 carbon reduction and renewable targets.

[1] Source: Deloitte http://www.deloitte.com/view/en_GB/uk/industries/eiu/751f578aacfca310VgnVCM1000003156f70aRCRD.htm

 

Haven Power news, events and industry insights.