Utility Week

14 | 29TH JUNE - 5TH JULY 2018 | UTILITY WEEK Policy & Regulation Market view T he dra Clean Air Strategy, launched on 22 May for consultation until 14 August 2018, has a hidden warning for biomass burning. Until now it was seen as a low- carbon alternative to coal, but it seems sup- port for it from the government – or at least, the Department for Environment, Food and Rural Affairs (Defra) – may be wavering. The dra Clean Air Strategy states that future energy, heat and industrial policies will together improve air quality and tackle climate change. The government will ensure the transition from coal-fired to cleaner power sources will improve air quality wher- ever possible and make it cost-effective to do so. It will "conduct a cross-departmental review into the role of biomass in future policy for low-carbon electricity and heat, focusing on the air quality impacts". We do not know exactly what this will entail, but we are told that the proposed way forward will be set out in the final Clean Air Strategy, due to be published in April 2019. Why could this be bad news for biomass? The dra Clean Air Strategy cites biomass in particular as a technology that creates tension between decarbonisation and air pollution: "Biomass burning can support decarbonisation but, without appropriate abatement, it will increase levels of air pollu- tion, unless it involves a switch away from a dirtier fuel such as coal." On the surface, Defra seems to be saying that biomass burning has air quality issues, but let's unpick this statement. There are two caveats: "without appropriate abatement" and "unless it involves a switch away from a dirtier fuel such as coal". Carbon negative Two days before the dra Clean Air Strat- egy was published, Drax – the world's largest biomass power station – issued a press release announcing it was piloting a new bioenergy carbon capture and storage (BECCS) project. This uses a solvent devel- oped by Leeds University spin-out company C-Capture to "scrub" the carbon dioxide from the gas released by burning biomass, effectively making the process of burning biomass to make electricity carbon-negative – taking more carbon from the atmosphere than it puts in. The Clean Growth Strategy last October had identified BECCS as a technology that could help achieve long-term decarbonisa- tion. So, if the pilot works, biomass burn- ing could support decarbonisation without increasing air pollution levels, and please both the Department for Business, Energy and Industrial Strategy (BEIS) and Defra. A week aer the dra Clean Air Strategy, the BEIS Committee launched an inquiry into carbon capture, use and storage (CCUS), to examine the government's commitment to deploying CCUS technology and whether it has a "plan B" to meet the UK's climate change targets should desired cost reduc- tions not materialise. The Clean Growth Strategy made a commitment to deploy CCUS at scale during the 2030s, subject to costs coming down sufficiently. The inquiry accepted written evidence until 22 June. Any time now we are expecting BEIS to open a £15 million "Call for CCUS Innovation" to offer grant funding for innovation projects that lead to significant reduction in the cost of capturing and sequestering carbon diox- ide. Up to £5 million will be allocated to each project, but this is really a drop in the ocean compared with the cost of such schemes. Switch from coal The dra Clean Air Strategy has had a lot of publicity for coming down hard on domestic wood-burning stoves, and most stories also picked up on the mention of a consultation on excluding biomass from the Renewable Heat Incentive scheme if installed in urban areas that are on the gas grid. We can see the logic of this: swapping relatively lower car- bon gas for possibly higher particulate emis- sions wood or biomass burning may not be the best option for reducing emissions. However, what has attracted surprisingly little attention is the promise of a consulta- tion on making coal-to-biomass conversions ineligible for future contracts for difference allocation rounds. This would mean any existing coal-fired power station that wanted to convert to biomass, would not be eligible for any government subsidy, given the clo- sure of the Renewables Obligation last year, and seems to go against the Clean Growth Strategy, and indeed Defra's own statement quoted above. Switching to biomass from coal, for power generation at any rate, will not increase levels of air pollution, as bio- mass is less polluting than coal. It will be interesting to see what this consultation pro- poses and how the industry responds. This highlights our central theme around the need for consistency across government. There seems to be a conflict between Defra's focus on air quality and the Clean Growth Strategy's focus on reducing carbon emis- sions and this will make all potential inves- tors in energy uneasy. There is a growing fear that the Brexit work is distracting govern- ment departments from other key areas – this could be another example. Richard Goodfellow and Paul Dight are partners in Addleshaw Goddard's energy practice A clash of clean interests? There seems to be a conflict between the government's focus on air quality in the Clean Air Strategy and on cutting carbon emissions in the Clean Growth Strategy, say Paul Dight and Richard Goodfellow. "Biomass burning can support decarbonisation but, without appropriate abatement, it will increase levels of air pollution, unless it involves a switch away from a dirtier fuel such as coal." DRAFT CLEAN AIR STRATEGY

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