Tilbury opened in 1967 as a 1467 MW coal-fired plant. It was scheduled to close under the EU’s Large Combustion Plant (LCPD) Directive, giving it 20 000 hours of operation from 1 January 2008.
However, in 2010 RWE decided to begin converting it to run on biomass for the remainder of its LCPD hours and it started operating in this capacity in 2011.
The biomass plant had a capacity of 750 MW has RWE said it delivered more than 10 per cent of the UK’s total renewable electricity.
Once the LCPD deadline ran out – which was yesterday – RWE had planned to close it for two years while it carried out a full scale biomass conversion, which the company said would have given Tilbury up to 12 more years of work.
However, the UK’s Department for Energy and Climate Change revealed earlier this year that the project was ineligible for the government’s contracts for difference, a new support mechanism for low carbon technologies, which forced RWE to last month take “the difficult decision not to proceed with the project, as it is no longer economically viable”.
RWE this week stressed that “Tilbury remains an excellent site for power generation” and said it was reviewing future plans for the site.
“The lessons learned from the successful biomass conversion will be shared across the RWE Generation portfolio, as RWE remains committed to exploring new energy technologies that can provide energy solutions that are both affordable and sustainable.”
In February 2012, the plant suffered a significant setback when wood pellets caught alight and a fire ripped through the biomass storage area of the plant, shutting the facility for months.
A recent report by analysts at Frost & Sullivan highlighted the market dangers to biomass plants.
‘Opportunities in the Biomass and Biogas Power Market in Europe’ stated that biomass plants will play a key role in Europe’s bid to hit its 2020 renewables targets.
However it warned that “deteriorating economic conditions in Europe have limited market expansion”.
“Countries have cut down or even stopped subsidies for power generation from biomass and biogas, jeopardising the prospects of plant owners.”
The report also highlights that a “lack of steady raw material supply in the region poses another challenge”.
It states that “high-demand customers are willing to pay more to keep their power plants running, which triggers a rise in feedstock and equipment prices, affecting profitability. The withdrawal of government incentive schemes further dampens revenues.”
Frost & Sullivan energy and environmental research analyst Ashay Abbhi said: “Biopower plants are increasingly preferred as a source for large-scale power generation owing to their low capital requirements. Their efficiency, longer operational times, and reliability further boost their popularity over other sources of renewable power generation.”
But he warned that “government support is necessary for technology development, especially as constant innovation will enable a reduction in capital expenditure”.
“For now, the conversion of coal power plants to biomass plants will be the strongest market trend as it requires far less investment than setting up a greenfield biopower plant.”
The report notes that the European biopower market is currently dominated by Germany and the UK but this will “slowly give way to opportunities in the developing Central and Eastern Europe markets”, with “Poland expected to be a hotspot”.