RES cancels £300m biomass plant blaming poor government policy

Independent renewable energy developer RES has blamed a lack of government policy clarity for its decision to stop work on a £300m ($502m) biomass plant in the UK.

RES has pulled the plug on the project at the Port of Blyth (pictured) in Northumberland, England, because of what it calls “the government’s inconsistent support for dedicated biomass energy over the last two years”.

The company said that this stance, coupled with “increased uncertainty over the UK’s energy policy under the government’s Electricity Market Reform process, has critically undermined the investment case” for the plant.

RES said the decision to pull out of building the plant will mean “the loss of hundreds of millions of pounds of investment into the Blyth estuary and wider Northumberland economy, 300 construction job opportunities and 50 full time, long-term operational jobs”.

Chief operating officer Gordon MacDougall said that despite local support, the plant faced “insurmountable investment barriers due to uncertain government energy policy”.

He added: “It’s bitterly disappointing for RES that we are unable to bring this exciting project forward.  However, the gradual erosion of support for dedicated biomass leaves us with no other option.”

RES said biomass technology has been “increasingly marginalised by the UK government in a series of policy developments over the last two years, including the introduction of a cap on dedicated biomass under the Renewables Obligation”. 

The company said this cap represents “a radical downsizing in government ambition for the technology from a target of 4000 MW in 2011 to a cap of 400 MW in 2013, long after the industry had invested significant sums in developing projects on the back of [government] ambitions”.

And RES said that the “government’s preference for the conversion of existing coal-fired power stations to biomass over dedicated biomass generating capacity is at odds with the urgent need to bridge the looming capacity crunch in the UK energy system”.

MacDougall added: “Without a consistent approach to energy policy, investors and developers will be deterred from delivering the billions of pounds needed to ensure the nation’s energy infrastructure is able to keep the lights on and secure cost effective electricity for British homes and businesses.”

Dr Nina Skorupska, chief executive of the trade group Renewable Energy Association, said the decision on the Port of Blyth plant was “a bitter blow for RES, the Northumberland economy, energy security and out climate change objectives”.

She said “recent government actions have eroded investor confidence in the biomass sector”.

March 2014 Top Ten Stories

  1. GE rows in behind innovative energy storage project
  2. Another step forward in ambitious Chinese nuclear strategy
  3. RES cancels £300m biomass plant blaming poor government policy
  4. Progress installs over 60 gensets for STOR solution in UK
  5. Major Vietnamese plants shut after gas leak
  6. World’s biggest power producer announces $20bn write down
  7. GE aims to drive home the advantage of distributed power
  8. Former nuclear regulatory chief advocates end of nuclear power
  9. China rushes to develop thorium power potential
  10. More delays as Finnish nuclear blame game continues

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