The European Commission has opened an in-depth inquiry into the UK’s plant to use public funds to pay for the conversion of a coal-fired power plant at Lynemouth in England.
The Commission has launched the inquiry in order to assess whether the UK tax payer is paying too much for the conversion to biomass power. Brussels said it would also check to ensure the project was in line with EU energy and environmental objectives.
The plant would have a capacity of 420 MW and would be fuelled by wood pellets, sourced from North America. It would get support from the British government in the form of a financial instrument known as a contract-for-difference.
“We remain hopeful the matter will be resolved, but this is disappointing as it further delays our ability to make an investment decision on the project,” a spokeswoman for owner RWE Supply and Trading told Reuters.
A Department of Energy and Climate Change spokesperson said the inquiry was a normal part of the Commission’s process and the government would work to resolve its concerns.
A Commission decision on whether to approve contracts is also still pending on another biomass project: Drax Group’s third biomass conversion unit (called Unit 1) at its coal plant in Yorkshire.
James Court, Head of External Affairs at the UK’s Renewable Energy Association told Power Engineering International: “We understand this is a routine part of the State Aid process and while there will be a delay, we believe the Commission will recognise the significant benefits biomass power can bring to the UK’s energy mix. Biomass power can deliver the most cost-competitive low-carbon baseload power and the UK needs more of it if we are to hit our 2020 targets in the most effective way for energy consumers”.
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