Stockport Homes commissioned APSE to undertake some work on the biomass supply chain. The Renewable Heat Incentive (RHI) that came into force last year is a feed in tariff for heat production, covering biomass boilers, solar thermal panels and heat pumps but has so far been significantly less attractive than the Feed in Tariffs. Currently the budget of £860m is well under-spent, meaning that these projects are attractive.
Stockport Homes have already committed to fitting up to five district heating systems for its social housing (having won CESP funding) and is cognisant of the necessity to have some certainty about the supply chain for example where the biomass feedstock comes from and how much it costs.
There are both economic issues (price) and carbon issues (travel / delivery) associated with biomass. There are various ways that the supply chain can be secured and biomass is a particularly good area for joint action amongst different authorities. The idea has been floated of local authorities pooling their woodland or other potential land, growing trees or energy crops and then putting production facilities (chipping or pellets) in place and transport to supply the biomass boilers.
The business case for biomass boilers, have been very strong, with payback in about six years and significant savings thereafter. On a recent business case in Scotland for a secondary school, the savings were virtually £1million over 20 years from a single boiler costing £850,000 that would pay off after six years. Many authorities are looking at this area now and one County Council in the central region has set up an in house biomass operation.
APSE recently completed phase three of the project which looks to provide an opportunity to review the Midland Woodfuel’s supply contract arrangements and develop a strategic plan of the remaining work that is scheduled to be completed in 2015.