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Putting it all together: Policy directions Cameron Maxwell, Business Development, FCS FEG Autumn Symposium, 8 September 2011 Forestry is always looking for a White Knight 2 Policy directions 3 Policy directions SG policy The Scottish Government would prefer to see biomass deployed in heat-only or combined heat and power schemes, off gas-grid, at a scale appropriate to make best use of both the available heat, and of local supply. 4 Policy directions Rationale • Heat is 50% of total energy demand • Make most efficient use of a finite resource • Biomass key to delivering 11% renewable heat target • can make a minor contribution to electricity baseload • off gas-grid ensures highest carbon savings • promote development of decentralised energy generation. 5 Policy directions Balanced approach • Timber processing industries: • low carbon products for construction etc • contribution to economic development • New income stream for forest industries • • • • Better returns for growers Development of supply chain More woodland management Encourage investment in new woodland • Heat – more incremental increase in demand • Local use 6 Policy directions Resource • Softwood production - 6.3m green tonnes • Sawmills • Wood panel • Paper and paperboard • Wood fuel - 1.6m green tonnes (40% recycled) • Production Forecast, 7.3m green tonnes in 2020 • UK 9.8m gt (2010), 11.8m gt (2020) 7 Policy directions Biomass demand 800,000 OTHER INDUSTRIAL AND COMMERCIAL HEAT ONLY <1,000odt/yr 700,000 INDUSTRY/COMMERCIAL (using 1,001 to 10,000 odt/yr) MAJOR INDUSTRY/COMMERCIAL (using >10,001 odt/yr) Woodfuel Use (odt) 600,000 500,000 400,000 300,000 200,000 100,000 0 2004/2005 2005/2006 2006/2007 2007/2008 2008/2009 2009 2010 forecast Forestry Commission Scotland: Wood Fuel Demand and Usage Update Report 2009. Hudson Consulting (www.forestry.gov.uk/scotland) 8 Policy directions Availability • WFTF update report published in March 2011 • Potential available resource • 0.8m green tonnes in 2010-11, • 2.4m green tonnes in 2017-21 • Increased harvest, forest residues, recycled wood • Renewable heat 2.8% (biomass 90%) • Additional 1m green tonnes in heat only plants would deliver additional 3% renewable heat 9 Policy directions Imports • May be a significant role for imported biomass • But global market is immature and likely to be volatile • Use dependant on: • price, availability and evidence of sustainability • Use should support maximum heat use and de-centralised energy production. 10 Policy directions Going forward • Renewable Obligation Banding Review • Review support for biomass to align with policy • Analysis: • Best use of wood fibre and wood fuel • Future wood fuel demand • Likely impact of the Renewable Heat Incentive • Proposals in planning • Energy forestry 11 Policy directions UK Government policy • Renewables Road Map • Significant role for biomass electricity • Enhanced co-firing, conversion, dedicated biomass • ROC Banding Review • Bioenergy Strategy/Bioenergy Review 12 Policy directions UK ambition (m odt) Biomass plant Dedicated biomass <50MW Dedicated biomass >50MW Solid biomass co-firing Solid biomass conversion Total biomass demand Scenario Low Medium high Low Medium high Low Medium high Low Medium high Low Medium high 2010 3 3 3 0 0 0 7 7 7 0 0 0 10 10 10 2020 5 6 7 5 6 15 1 1 1 0 6 14 11 20 37 2030 8 12 13 13 15 30 0 0 0 0 4 10 21 32 53 + 5m odt for the renewable heat target 13 Policy directions Demand for UK fibre (m odt) Biomass plant Scenario Dedicated biomass <50MW Low Medium high Dedicated biomass >50MW Low Medium high Solid biomass co-firing Low Medium high Solid biomass conversion Low Medium high Total biomass demand Low Medium high 14 2010 3 3 3 0 0 0 1 1 1 0 0 0 4 4 4 2020 5 6 7 0 1 2 0 0 0 0 1 1 5 8 10 2030 8 12 13 1 2 3 0 0 0 0 0 1 9 14 17 Policy directions UK biomass inputs 15 Policy directions Global resource 16 Policy directions Timber development • Green credentials • Renewable • Carbon substitution • Carbon storage • Incentivisation • • • • Promotion, Education R & D, new products, systems, Building regulations, embodied carbon. Concerns/conclusions • Scale of demand • Tilbury, Drax • Pellet plants • Georgia, USA – 1m tonnes • Russia – 2-3m tonnes • Canada – 2m tonnes • Electricity generators will go for most accessible material first • Ability to pay • DECC: 5-15% price increase to 2020 • Wood will travel 18 Policy directions 19 Policy directions