Development halted on UK biomass-to-energy plant

British renewable energy project developer RES has announced that it is ceasing work on its £300mn biomass power station project at the Port of Blyth in Northumberland. The decision follows the withdrawal of a key project partner due to ‘ongoing uncertainty’ in UK energy policy.

The company blames the government’s ‘inconsistent support’ for dedicated biomass energy over the last two years, as well as increased uncertainty over the UK’s energy policy under the Electricity Market Reform process. These have critically undermined the investment case for the North Blyth Biomass Power Station, says RES.

The 100 MW biomass-to-electricity project, which was granted development consent in July 2013, would have brought a long-term partnership with the Port of Blyth in terms of fuel transport, handling and occupancy, helping to secure further growth of this economic engine of the region, adds the company. Instead, the decision to end the project means the loss of hundreds of millions of pounds of investment into the Blyth estuary and wider Northumberland economy. 

RES’ Chief Operating Officer for the UK Gordon MacDougall stated: ‘Despite the support the project enjoys locally due to the significant benefits it would bring to the local and regional economy, the North Blyth Biomass Power Station currently faces insurmountable investment barriers due to uncertain government energy policy. It’s bitterly disappointing for RES that we are unable to bring this exciting project forward, and deliver the significant boost it would have represented for the Blyth and Northumberland economy. However, the gradual erosion of support for dedicated biomass leaves us with no other option.’

Biomass-to-energy technology has been increasingly marginalised by the UK government in a series of policy developments over the last two years, says RES, including the introduction of a cap on dedicated biomass under the Renewables Obligation (RO). The cap represents a radical downsizing in government ambition for the technology from a target of 4,000 MW in 2011 to a cap of 400 MW in 2013, adds the company.

The UK Renewable Energy Association Chief Executive, Dr Nina Skorupska, added: ‘The government used to have a clear policy of supporting the most affordable low carbon technologies, which saw biomass projects attract healthy investment. However, recent government actions have eroded investor confidence in the biomass sector. The result is project cancellations totalling hundreds of MWs and millions of pounds of inward investment.’