Greenspan Energy response to the Scottish Renewables Obligation review consultation

Posted on 16 January 2012

Greenspan Energy believes that Scotland should amend most of its bands and legislation with the rest of the UK, with the exception of Anaerobic Digestion (AD). In this instance Scotland should follow the precedent set by Northern Ireland to give 4 ROCs per MWh for plants with a net generating capacity no greater than 500kWe and 3 ROCs for plants with a net generating capacity greater than 500kWe.

Anaerobic Digestion is one of the few renewable energy technologies that can give predictable base load power throughout the year. Over a single year, an AD plant can provide almost three times the amount of power of a wind turbine of equivalent electrical capacity. We believe that base load and predictable power output should be promoted by Scotland as a great partner for wind turbines.

England benefits from a warmer, drier climate, and is able to grow higher yielding energy crops, such as maize silage; Scotland doesn’t have the climate to grow these crops. Typically 600 acres of farmland in England will produce enough maize to power a 500kWe AD plant; whereas a Scottish farm would need approximately 1,200 acres to grow enough grass silage to produce the same size of plant. Very few farms in Scotland would be willing to divert that amount of land to growing energy crops for AD.

Whilst some large scale Energy from Waste (EfW) AD facilities are now being developed, there are very few farm based projects either in operation or in planning in Scotland. With the right incentive in place we believe this would change.

The size of plant chosen by Farmers will be determined by a balance between economies of scale in the plant (a 250kWe AD plant costs 80% of a 500kWe plant) and available land for growing energy crops, which may form co-operatives with neighbouring farms. Based on this, the majority of farm based AD plants in Scotland will be between 250 – 500kWe.

EfW facilities are more expensive to build and operate than energy crop plants. However, a 500kWe EfW AD plant will receive an income in gate fees of £360,000 (12,000 tonnes x £30/t) per year whilst an Energy Crop AD plant will have input costs of £340,000 (17,000 x £20/t), and whilst the Feed-in Tariff provides a financial uplift for small scale farm based AD plants, it is not enough

In addition to the need for 4 ROCs, Greenspan Energy does not believe that any digression will be experienced in the AD market. The development of AD projects of this scale will always be a bespoke process, which means they will not benefit from the mass manufacture expected in other areas. Many of the other components (pumps, pipework, etc.) are standard industrial equipment that are already mass produced. Two of the core materials in the construction of AD plants (concrete and steel) are set to increase in price over the coming years, which would re-emphasise the view that the cost will not digress.

Northern Ireland decided to increase the level of support for AD after a call for evidence from the Energy Minister for the economic case of increased support. This resulted in twenty responses from industry stakeholders pressing the importance of the increased support through the RO to kick start the AD industry in Northern Ireland. The evidence was collated and presented for state aid approval, which was successful.

The new level of support came into effect on 1st April 2011, and after five months over sixty planning applications were submitted for AD. Greenspan Energy has had discussions with the Northern Ireland Energy Division who are comfortable with the decision they made to amend the support level, which they will sustain over the coming years.

If Scotland could build 100MW of AD by 2017, this will;

  • Create 450 full time construction jobs for 5 years
  • Increase employment through supply services such as: concrete and steel; engines and pumps; research and development; agronomy; service and maintenance; consultancy and planning
  • Create further employment by harnessing the excess heat produced in the process (greenhouses etc.)
  • Distribute generation, leading to distributed benefit
  • Safeguard rural employment
  • Align well with the 2013 CAP reform which encourages 3 crop rotation
  • Increase security of energy supply with 800GWh per annum of consistent electricity

We firmly believe that offering 4 ROCs per MWh for Anaerobic Digestion will drive this sector forward helping Scotland meet its renewable energy targets.