Drax investigated while Lynemouth looks to a renewable future19 February 2016
In early January, the European Commission (EC) announced that it had opened a formal (Phase 2) state aid investigation into the award of an investment contract to UK plant owner/operator Drax for its third coal-to-biomass unit conversion. This is the next step in the process for obtaining state aid approval and is “in line with expectations”, says Drax.
The investment contract was awarded to Drax under what is called the Final Investment Decision Enabling ("FID Enabling") scheme for renewables. This is a temporary scheme introduced by the UK government to avoid an investment hiatus in the low carbon power generation technology sector as the UK support mechanism transitions from the old Renewables Obligation mechanism to the new "Contracts for Difference" (CfD) regime. The investment contracts are essentially "early" CfDs, intended to provide reassurance for investors ahead of full introduction of the new CfD system.
As well as the Drax third-unit conversion, investment contracts under FID Enabling were awarded to two other UK biomass projects, conversion to biomass of RWE's Lynemouth coal fired power plant and construction of MGT's dedicated Teesside biomass CHP plant. The investment contract for the MGT project received EU state aid clearance in January 2015 and that for Lynemouth received state aid approval in December 2015.
Two of the six units at Drax (originally a 6 x 660 MW coal fired plant) have been converted to 100% biomass under the old Renewables Obligation support scheme.
Last coal at Lynemouth
On 22 December 2015, after 43 years of operations, Lynemouth power station burnt its last coal. The plan is now to move towards full conversion to biomass generation, assuming a favourable final investment decision from plant owners RWE. In its converted state the biomass fuelled facility will have an installed capacity of 390 MWe (net), 420 MWe (gross).
Lynemouth power station has generated electricity from coal since 1972. The plant was originally built, owned and operated by Alcan with the purpose of providing a secure energy supply for the production of aluminium at the adjacent Lynemouth smelter facility. RWE bought the power station in December 2012, forming a new company, Lynemouth Power Ltd, to take over the operation of the plant
To mark the last coal burn one of the longest serving employees, Peter Kay, shift engineer, was asked to open the unit 3 generator electrical circuit breaker (see photograph), thus removing the unit from operation on coal for the final time. Peter began working at the station on 5 September 1977 and "so has witnessed the station begin and end coal fired generation and now prepare to enter a new chapter with the move towards low carbon biomass generation", said Lynemouth Power Ltd.
RWE says it "plans to take an investment decision on the conversion to biomass for the Lynemouth power plant in 2016", noting that all activities to support the project are continuing, including contracts for the engineering of the conversion and arrangements with local ports and rail companies for movement of biomass supplies to the station.
Commenting in December 2015 on the receipt of EU state aid approval for the Lynemouth conversion project, Andree Stracke, chief commercial officer of RWE Supply & Trading GmbH said, "We welcome this confirmation of government support for biomass power generation, which provides a reliable base load to complement other renewables such as wind and solar. We are working towards full conversion and power production from 100% biomass within 18 months."
The conversion from coal to biomass will allow the station to operate under new tighter EU emission regulations (Industrial Emissions Directive), which came into force on 1 January 2016, RWE noted.
(Originally published in MPS January 2016)