The owner of what was once the U.K.’s biggest coal plant joined a growing list of companies jostling for position to fill a potential energy gap if the government drops plans for an 18-billion pound ($23 billion) nuclear station in Somerset.
Andy Koss, chief executive office of Drax Group Plc., said biomass is the U.K.’s most cost-effective form of energy on a whole-systems cost basis. The company, which converted three of its six units to biomass from coal, “stands ready” to convert the remaining three, he said.
Biomass would be “the cheapest” source of energy if all costs of running a plant were considered he said, including the need to balance the variability of other renewables as well as providing back-up capacity.
“Biomass can do baseload, it can do reliable and it can do flexible dispatch,” Koss said in a phone interview.
A brand new incineration plant would generate power at a mid-price levelized cost of $145 per megawatt hour, and a coal-to-biomass conversion would be “significantly cheaper,” according to Jonas Rooze, an analyst with Bloomberg New Energy Finance.
The benchmark levelized cost of energy estimate for the proposed Hinkley Point C nuclear plant is $187 per megawatt hour, the London based researcher said.
The findings add to the debate over whether Hinkley makes economic sense. With the cost of offshore wind turbines falling, renewable developers are promoting their technologies as a better way to get energy without the emissions that cause global warming.
Electricite de France’s Hinkley power plant “is not essential,” said Richard Black, director of the Energy &B Climate Intelligence Unit. “Using tried and tested technologies, with nothing unproven or futuristic, Britain can meet all its targets and do so at lower cost,” he said in a statement.
An ECIU report Friday showed the U.K. could save 1 billion pounds a year in 2030 by investing in a combination of 10.1 GW of additional energy efficiency improvements, 4.4 GW of offshore wind capacity and 11.2 GW of new demand response capacity, instead of Hinkley.
The London-based nonprofit group omitted biomass from the report “due to doubts that the volume of fuel needed would be able to be sourced sustainably,” said energy analyst Jonathan Marshall. It would also be difficult to calculate the cost of the plants as the government has said biomass conversion won’t be eligible for its upcoming clean-power auctions.
Koss is urging the government to hold technology-neutral auctions that would let different developers compete on cost. “We believe there is a very strong case to open up the second and third auctions and admit other technologies including biomass,” he said.
A spokesman for EDF Energy said the scenarios outlined in the ECIU report “are not credible alternatives” to Hinkley Point C.
“HPC’s cost is competitive with other large-scale low carbon technologies,” Ben Geoghegan said in an e-mailed statement. “It will generate electricity steadily even on foggy and still winter days across Northern Europe. It will play a crucial role as part of a future, flexible energy system.”
©2016 Bloomberg News
Lead image: Biomass fuel storage tanks at the Drax power station near Selby, U.K. Credit: Simon Dawson/Bloomberg