The Wood Fuel Conference at Epsom on Thursday 15th October raised concerns over the governments ability to provide clarity and trust on energy subsidies to enable new technologies, projects and investment in the renewables sector.
True to form, the REA provided excellent information and insight to the mood of government with regards to supporting the renewables industry and a summary of policy changes the government has made since the election. Removal of Levy Exemption Certificates (‘LECs’) for all renewable power generation with 4 weeks notice only is one example. This change in direction has resulted in a 5% loss of revenue for some projects.
The REA also briefly mentioned that though subsidies may be reduced, legal compliance with sustainability requirements will apply and may possibly increase if taking account of recent legislative measures regarding renewable heat use.
Sustainability and the Need for Forest Management Plans
The Forestry Commission reiterated the need for forest management plans and the fact that both forest management plans in compliance with the UK Forestry Standard (UKFS) and felling licences are means to show wood harvested from such forests meet the RHI and RO sustainability criteria. The point of 42% of UK woodland being held by private landowners, as stated by the CLA, with no assurance of forest management plans being in place, means that wood purchased from private landowners cannot be assumed to be sustainable as their is no legal precedence to have forest management plans. The CLA urged forest owners to develop forest management plans with sustainability measures to satisfy the sustainability criteria in the RHI and RO.
Frustration with the Biomass Suppliers List (BSL)
Many attendees vented their frustration of the Biomass Suppliers List and the ability of Gemserv to process applications promptly and be responsive. Gemserv’s stated that they could not foresee the number of applications that were to be made and had over 1,000 applications in September 2015 alone. Though a quick calculation of the number of wood suppliers, RHI claimants and potential overseas producer-traders may have given an indication to Gemserv that in fact they would be dealing with numbers in the thousands, opposed to hundreds.
The logic of the RHI sustainability criteria applying in the winter fuel season, i.e from the 5th October opposed to spring and therefore April 2016 has evidently lead to a number of rash applications made just prior to gearing up for distribution of wood fuel. The Biomass Suppliers List has led to notable bottlenecks in RHI authorised supply and a distortion of competition. Evidently those listed at a strong competitive advantage at present.