Welcome to the October issue of our bioenergy market review. This month has seen heightened scrutiny of energy bills, in the wake of rising bills and the forthcoming launch of the UK Governments Energy Bill.

1. NNFCC Market Review
Bioenergy Issue Seven, October 2012
E
when Anglo-Swiss company INEOS Bio
ach month we review the latest
opened their first-of-a-kind waste-to-
announcements and news from
ethanol gasification plant in Florida instead
across the bioenergy market. This of Teesside, earlier this year.
service is exclusively for our business
members. But there is positive news from the UK –
particularly following the outcomes of the
Foreword Renewables Obligation review – with a
number of investors and power companies,
Welcome to the October issue of our such as gasification specialists Nexterra
bioenergy market review. This month has Energy and infrastructure providers The
seen heightened scrutiny of energy bills, in Spencer Group, looking to invest in the UK.
the wake of rising bills and the forthcoming
launch of the UK Governments Energy Bill. The key for the Government will be to find
the correct balance between keeping
This month utility companies, like British Gas down costs for taxpayers during an
and Npower, increased their standard economic recession and encouraging the
energy tariffs by more than £80 for the investment which could bring us out of
average household, leaving some recession.
consumers asking can we afford to
continue supporting emerging technologies Read on for the latest market news.
like biomass.
However, the Government also recognise Highlights
that the UK renewable energy sector
Page 2 Policy News
employs close to 1 million people and is
one of the few areas in the economy Page 2 Dedicated Biomass News
showing significant growth.
Page 4 Gasification News
There is a real danger that without Page 6 Biogas News
government support, companies will take
their investment elsewhere, as was the case
Page 8 Events
NNFCC Market Review, October 2012, Page 1 of 8

2. Policy that can be charged to energy customers'
bills, via an existing power called the levy
Energy policy negotiated as coalition control framework (LCF), with a fresh cap
currently being negotiated to begin in 2015.
leaders meet to discuss green
agenda In return, Davey would get a new carbon
target – to virtually eliminate emissions from
Senior coalition figures met on the 17th electricity generation by 2030 – written into
October for talks about the UK's stalling the energy bill due to be published in early
energy investment program, amid growing November. That target has had the backing
political concern about the rising cost of of some major energy companies and the
customer bills and threats by power renewable energy industry. However, there is
companies to pull out of the UK because of growing political pressure over the rising cost
delays. of consumer fuel bills.
Sources on both sides of the coalition said Click here for more information.
that both the Prime Minister David Cameron
and his deputy, the Lib Dem leader Nick
Clegg, were frustrated and worried by the
continuing dispute, particularly following a
series of warnings by major investment Dedicated Biomass
companies that they might quit the UK.
In early October seven global electricity and
nuclear giants, including Alstom and
Mitsubishi, threatened to reassess their
investment plans because lack of decision-
making and threats to axe key green targets
had raised the "political risk" of the UK.
A senior Conservative told the Guardian that
David Cameron is now personally re-
engaging with the green agenda,
recognising it as one of the few growing parts
of the economy. Furthermore, Clegg has Drax to invest £700 million upgrading
acknowledged top level concern about the its boilers to use biomass
continuing delays, telling MPs in response to a
question about how uncertainty was Drax plans to spend as much as 700 million
damaging for investment that: "This is not just pounds through 2017 upgrading its boilers at
about whether we think it is right for the Selby, according to Chief Exective Dorothy
environment, but about what is right for our Thompson. The move would make Drax the
economy. The green sector employs close to largest cleam-energy generator in Western
1 million people, was growing at about 4 per Europe.
cent or 5 per cent last year and is one of the
few sectors that runs a trade surplus." The utility plans to convert one of the site’s six
units to burn wood pellets by June 2013. It also
Sources familiar with the negotiations said a intends to switch two more units to wood at a
likely deal would give the chancellor more later date. Each unit will burn about 2.3 million
leeway on the decision to limit the subsidies tons of biomass annually, meaning the
NNFCC Market Review, October 2012, Page 2 of 8

3. company will need to source 7.5 million tons next month after Peel Energy appealed
of biomass by 2017. against the council's decision.
The utility has hired farmers and foresters, The Environment Agency has concluded in a
designed special railway carriages and is report that experts are satisfied the facility
investigating building wood pellet plants in would not put people at risk. It has granted
North America. Drax is also building four silos the developers an environmental permit,
out of plastics, foam, steel and concrete, with which would allow them to go ahead with
conveyor floors, capable of holding 700,000 the plant if planning approval is granted.
metric tons of biomass.
Click here for more information.
Click here for more information.
Spencer Group win contact to convert
Rugeley coal-fired power station to
biomass
The Spencer Group has won a contract to
develop a concept for converting the
Rugeley coal-fired power station into a
biomass plant and will now carry out a Front
Source: MITIE
End Engineering Design study.
The work, which is being carried out in
New energy centre at Waitrose
conjunction with Morgan Sindall, aims to Bracknell opened by Minister of State
develop concept engineering and design for for Energy and Climate Change
the planned conversion of the coal fired
power station to biomass, before Rugeley The Minister of State for Energy and Climate
choses a company to carry out the work. Change, Greg Barker, opened the advanced
new energy centre at Waitrose Bracknell on
Currently, Rugeley burns coal to produce Monday 24th September.
approximately 1GW of electricity. The power
output is enough to meet the needs of The low carbon energy centre – developed
approximately 500,000 homes. by MITIE – uses sustainable local woodchip to
power, heat and cool the store. This will help
Click here for more information. replace 69 per cent of the stores electricity
and 84 per cent of its gas demands.
Peel Energy Trafford plant plans
backed by experts The energy centre will contribute £150,000 a
year to the local economy in the form of jobs
The Environment Agency has backed the and purchasing of local supplies. The
building of an energy plant in Greater woodchip supplier to Bracknell will be able to
Manchester after councillors rejected the create five additional jobs as a result of the
plans amid health fears. process from the forest to delivery.
Trafford Council rejected plans for a biomass It is the second energy centre developed as
incinerator in Davyhulme due to "significant a partnership between MITIE and Waitrose
public concern". A public inquiry will be held which will help the John Lewis Partnership – of
which Waitrose is a trading division – deliver a
NNFCC Market Review, October 2012, Page 3 of 8

4. 15 per cent absolute reduction in operational £2 million bioenergy innovation
carbon dioxide equivalent emissions from a scheme open to applications
2010/11 baseline by 2020/21. The first energy
centre at Waitrose East Cowes came online in
Sustainably sourced bioenergy could
March this year.
contribute around 8-11 per cent to the UK’s
total primary energy demand by 2020.
Click here for more information.
However, more investment is needed in
research, development and demonstration
DECC introduce voluntary pre- projects to drive forward innovation and
registration scheme for bioenergy improve efficiency, from methods used to
generators harvest plants for energy production to the
systems used to generate power from these
The UK Department of Energy and Climate sources.
Change (DECC) has announced a new
voluntary scheme, encouraging enhanced Many British wetland areas are currently
co-firing and biomass conversion facilities to maintained to provide an environment for
pre-register under the Renewables wildlife but the harvested material from these
Obligation. sites could also be used to produce energy.
Now the Government has launched a £2m
In announcing the voluntary scheme the scheme aimed at encouraging innovation in
Government have opted not to enforce a bioenergy production on wetlands.
mandatory requirement to pre-register co-
fired or converted biomass facilities, which Click here for more information.
was proposed in the recent Renewables
Obligation (RO) banding review.
The Government had proposed mandatory Gasification
pre-registration of units as a way of
forewarning regulators over the amount of Veolia calls for UK government to
biomass power generation that could be “actively discourage” gasification
expected from enhanced co-firing and
biomass conversion. In a new “waste manifesto” the firm said ATT,
which includes gasification and pyrolysis,
The news is a welcome boost to the biomass should be “actively discouraged” by
co-firing and conversion industry, as Government because it is unable to achieve
mandatory pre-registration could have the same energy efficiencies as traditional
delayed deployment of new biomass power incineration.
by eroding investor confidence.
The manifesto said Veolia’s energy recovery
DECC say the scheme is not explicitly linked facility incinerators could achieve 25-30 per
to 'triggered reviews' of support and is entirely cent efficiency as well as having the ability to
voluntary. DECC will now write to generators export heat. It called for Government action
asking them to provide information on their as soon as possible to consider introducing a
intentions over the forthcoming Obligation tax on this disposal.
period, which will then inform the level of
support in the Obligation. The manifesto, called “Making sustainable
cities a reality”, was the company said, “an
Click here for more information.
NNFCC Market Review, October 2012, Page 4 of 8

5. opportunity for us to share our thoughts on UK year contract with Derby City Council and
waste and resources management policy”. Derbyshire County Council which is worth an
estimated £400 million.
In a section on end of waste Veolia said
Government should not reclassify waste RRS will invest £130 million in the new facilities
derived fuel. It said it was imperative solid at Sinfin Lane. These will comprise an MBT
recovered fuels (SRF) must remain classified as plant which will extract additional recyclable
waste because there will always be materials from residual waste and produce a
uncertainty: “If allowed to pass through the fuel called Solid Recovered Fuel. This fuel will
system as end of waste, it could lead to then be used by an on-site gasification facility
uncontrolled pollution of the environment.” to generate enough electricity to power
14,000 homes. This electricity is supplied to
The call came as rival firm Shanks is lobbying the national grid, offsetting the cost of the
Government to reclassify SRF as a product so facility and providing an additional source of
it can be sold to co-fire existing power plants. revenue for the councils.
Speaking to MRW last week, Shanks chief
executive Peter Dilnot said ministers had been Click here for more information.
“receptive” to the idea but that there were
“practical, technological and political Canadian biomass gasification
implications”. company shifts focus to UK in wake of
collapse in US gas prices
Click here for more information.
Canadian biomass gasification systems
supplier Nexterra Energy is targeting the UK
market after the collapse in US natural gas
prices damaged its cost proposition in North
America. Nexterra has been active in North
America since 2003, installing systems that use
its fixed-bed updraft gasification system to
convert waste feedstock into syngas. Since
then, the influx of cheap shale gas reserves
into the North American market has
drastically damaged Nexterra’s business
Source: Resource Recovery Solutions model, with natural gas prices falling to $2-3
million per million Btu.
Shanks receives planning approval for
Nexterra will now seek to expand in regions
Derby waste management plant
where natural gas prices remain expensive.
The UK will be its first key new market due to its
Resource Recovery Solutions (RRS) – a wholly
relatively high energy and gas prices and a
owned subsidiary of Shanks – has announced
readily available supply of waste feedstock.
that it has received planning approval for a
The gasification projects favoured in the UK
190,000 tonne per year Mechanical Biological
also fit well with Nexterra’s systems, which are
Treatment and gasification facility in Derby.
typically in the 2-10 MW range for electricity
The facility will divert up to 97 per cent of
and up to 40 MW for thermal energy. The
residents’ residual waste from landfill.
company hopes to sign its first UK project
contract in the first quarter of next year.
The Planning Inspectors decision enables RRS
to move towards the financial close of a 27
Click here for more information.
NNFCC Market Review, October 2012, Page 5 of 8

6. Spencer Group expects construction will
begin in early 2013, with the first phase – the
gasification plant – operational by late 2014.
Other elements of the integrated facility will
then be added in phase two, up to late 2015.
Click here for more information.
Source: Spencer Group Biogas
Energy Works gasification plant UK Government confirm anaerobic
receives state aid approval for £20 digestion projects below 5MW will
million grant remain eligible for ROCs
Following a public consultation the
The European Commission has announced
Government has decided against
that if the UK Government provides grant
implementing proposed plans to exclude
assistance for Energy Works it would be in line
anaerobic digestion installations below 5MW
with European Union state aid rules aimed at
from the Renewables Obligation from 1 April
ensuring fair competition, saying the
2013.
development would reduce greenhouse gas
emissions, contribute to the security and
It means that new generators building
diversity of energy supply, and pioneer
installations at the 50kW to 5MW scale will still
cleaner technologies, with potential for similar
be eligible to receive Renewables Obligation
facilities to be rolled out across Europe.
Certificates (ROCs), which can then be
The £20 million grant now hinges on approval traded with suppliers. ROCs are seen as a
secure and stable funding mechanism for
by the European Commission of the “Major
Project Application”, which is required for those investing in new anaerobic digestion
installations, and the change of heart has
grant-supported projects with a capital cost
of more than 50 million euros. been welcomed by the industry.
Click here for more information.
The Spencer Group, the company behind
Energy Works, has submitted this application
and a decision is expected within weeks. The New edition of industry-leading cost
complete development – which will include a calculator helps AD industry work out
25MWe advanced gasifier and 3MWt biogas costs and returns
anaerobic digester – will produce enough
electricity to power 25,000 homes; potentially The latest edition of the UK’s leading
cut waste sent to landfill by local authorities in anaerobic digestion cost calculator has been
Hull and the East Riding of Yorkshire by 90 per published by NNFCC; helping businesses to
cent; increase recycling; create 200 jobs in assess and understand the potential costs
the construction phase and 60 jobs once and returns of using AD as a way of
operational; regenerate a brownfield site; generating heat and power from organic
and enable other businesses to reduce their waste.
carbon footprint.
NNFCC Market Review, October 2012, Page 6 of 8

7. The AD Cost Calculator is an essential tool in with indications that PAS 100 certification is
the arsenal of any developer looking to invest enabling producers to obtain higher prices
in AD, providing detailed annual financials from these markets.
over the life of an anaerobic digester. The
new version of the calculator uses the latest The study shows that 7.2 million tonnes of
incentives available for biogas combustion organic waste was recycled during this
and biomethane injection into the grid, it also period, compared to just over six million
includes variable retention times, monthly tonnes in 2009 and there are now over 1500
cash flow reporting as well as a number of people employed in the sector.
other improvements.
Click here for more information.
Click here for more information. New choice of biogas feedstock
crops
PDM granted planning permission for
4MW biogas plant Plant breeders, like Syngenta, are developing
varieties aimed specifically at the biogas
UK food waste recycler PDM's proposed market – these include improved "high
4.2MW biogas plant in the UK has been energy" maize as well as new lines of beet
approved, after Halton Borough Council ruled and cereal crops which can be grown on
in favour of the project on 8 October. land unsuitable for maize.
The £20 million project, to be built in Widnes, The energy value of the feedstock crops is the
Cheshire will be able to handle 90,000 tonnes key to maximising biogas production, as
a year of Merseyside-derived food waste and Syngenta’s Nigel Padbury explains:
generate enough biogas to power 8,000 “Concentrated power, in the form of high
Halton households. The food waste will also levels of maize metabolisable energy, is the
be used for compost. Forty new jobs will be route to optimising performance.” This means
created when PDM breaks ground on the breeding crops that produce more methane
anaerobic digester in November. Completion than typical feed crops when broken down.
is expected in late 2013.
Click here for more information.
Click here for more information.
German biogas growth grinds to halt
AD driving organics recycling sector
growth Rising corn prices and uncertainty about the
funding of biogas plants has halted the
WRAP’s latest survey of the UK organics growth of the biogas industry in Germany
recycling industry shows that growth in the according to German Agricultural Society,
number of permitted AD sites (48 in 2010) saw Deutsche Landwirtschafts-Gesellschaft (DLG).
the total input of organic waste processed via
AD top the one million tonnes mark. At the In 2005 there were 2690 plants in Germany
same time, composting showed some growth with a capacity of 1109MW. By the end of
with a total input of 5.44 million tonnes in 2010, 2011 this had risen to 7621 plants with 3185
up by 3.9 per cent on the 2009 survey. MW capacity. However, DLG warn that by
the end of 2013 there will be just 7895 biogas
Although agriculture remains the largest plants with a capacity of 3312MW; an
market for compost, increasing volumes are increase of less than 4 per cent in two years.
also going to higher value uses such as
professional horticulture and landscaping, Click here for more information.
NNFCC Market Review, October 2012, Page 7 of 8

8. Events
Gasification 2012, 21-22 Nov 2012 in
London, UK
www.wplgroup.com/aci/conferences/eu-
ecg2.asp
Source: Reuters ACI’s Gasification 2011 will bring together
senior executives from the oil refining and
power industry as well as technology
Biogas plant responsible for turning
providers and regulators to evaluate techno-
French honey blue economic progress to expand future
deployment of gasification.
Bees at a cluster of apiaries in northeastern
France have been producing honey in
The event will look at current and future
mysterious shades of blue and green,
market trends and developments across the
alarming their keepers.
globe as well as discuss key challenges and
opportunities in gasification projects focusing
Mystified, the beekeepers embarked on an
on cost & profitability.
investigation and discovered that a biogas
plant 4 km away has been processing waste
NNFCC members receive a 15 per cent
from a Mars plant producing M&M's, bite-
discount off the standard rate. Contact
sized candies in bright red, blue, green,
enquiries@nnfcc.co.uk for the discount code.
yellow and brown shells.
Click here for more information.
Credits and Disclaimer
NNFCC Market Review is edited by Dr Matthew Aylott for NNFCC members. Feedback is welcome.
The Review has been compiled in good faith and NNFCC does not accept responsibility for any
inaccuracies or the products or services shown.
NNFCC
The Bioeconomy Consultants
NNFCC, Biocentre, Phone: +44 (0)1904 435182
York Science Park, Fax: +44 (0)1904 435345
Innovation Way, E: enquiries@nnfcc.co.uk
Heslington, York, Web: www.nnfcc.co.uk
YO10 5DG.
NNFCC Market Review, October 2012, Page 8 of 8