British leaders are making some truly bizarre decisions in an effort to reduce carbon dioxide emissions and comply with European renewable electricity mandates. For example, they are converting a coal-fired plant to burn wood chips that are shipped from the United States. A wood burning plant qualifies under the European rules for meeting electricity generation mandates from renewable energy for the purpose of reducing carbon dioxide emissions from energy producing sources. But this move is sheer lunacy for it will increase rather than decrease emissions while increasing the price of electricity to consumers. Yet the British parliament has whole-heartedly embraced the move. Have legislators gone mad?
The British Drax Plant and Its Conversion
The Drax plant in Yorkshire, England is one of the biggest coal-fired power plants in the world with an almost 1,000 foot-tall flue chimney, 6 boilers, and 12 very large cooling towers. It consumes 36,000 tons of coal each day, providing 7 percent of the country’s electricity. Starting next month, the plant will be converted to burn millions of tons of wood chips a year, costing £700 million ($1.085 billion). [i]
Most of the wood chips will travel 3,000 miles across the Atlantic Ocean, coming from trees downed in the United States. Drax is building 2 plants in the United States that will turn the wood from trees into chips that can be transported by ship to Yorkshire and then hauled to the power station by railway trucks. In order to prevent spontaneous combustion, the wood chips must be stored in domes where the humidity is controlled before they can be pulverized into powder. (Wood is 1,000 times more prone to spontaneous combustion than coal.)
Despite the fact that coal is the least-expensive source of electricity generation in England, the owners of the Drax plant realized that a recently instituted carbon tax on fossil fuels would put them out of business if they continued to burn coal eventually making their electricity become twice as expensive. The political incumbents in Britain decided last year to give any coal-fired power station that switched to ‘biomass’ the almost 100 percent ‘renewable subsidy’ that owners of onshore wind farms get.
A British Carbon Tax and an EU Mandate
A new carbon tax introduced in Britain on April 1 is applied to every ton of carbon dioxide produced during electricity production. While the tax is starting out low, it will increase each year, making the cost of generating electricity from coal double within 20 years, at which point it will no longer be economical for Drax to generate electricity from coal. Along with the carbon tax, the British government will also be subsidizing electricity produced from its list of ‘carbon neutral’ power sources that will further increase consumer electricity bills.
The U.K. carbon tax is defined as a carbon price floor (CPF) that will increase from 16 pounds per metric ton of carbon dioxide ($24.80) in April 2013 to 30 pounds per metric ton ($46.50) in 2020, in constant 2009 prices. The resulting carbon tax is calculated as the difference between the carbon price floor, adjusted for inflation, and the European Union allowance (EUA) price, which is the 12-month average settlement on the European Climate Exchange for the relevant EUA futures contract. The tax for this financial year is 4.94 pounds per metric ton of carbon dioxide ($7.66) and in 2014/2015, it is 9.55 pounds ($14.80). IHS CERA calculated the 2015/2016 rate at 18.29 pounds per metric ton of carbon dioxide ($28.35) resulting in an annual doubling for two successive years.[ii]
The conversion of the Drax plant to wood chips will significantly contribute to meeting a target imposed by the European Union (EU) that commits Britain to producing almost a third of its electricity from ‘renewable energy’ within seven years. Upon completion, Drax will have the capability to generate 3,500 megawatts of electricity from a qualified renewable source, contributing more than a quarter of the EU target for the use of renewable energy. The reliability of the converted Drax plant along with its size will produce far more generation than the country’s wind farms.
The Issues the U.K. Politicians Aren’t Confronting
The energy policies that the United Kingdom has put in place have consequences that will affect the lives of its citizens and their pocketbooks. The country’s energy policies mean the electricity will cost more, that electric supplies may not be sufficient to meet future demands, and that little will be achieved in emissions reduction because of actions of other countries and the consequences of biomass conversions on the life cycle of the fuel.
It will cost two to three times as much for Drax to generate about the same amount of electricity from wood as it does from coal, i.e. fuel costs will double or triple. The government is providing a subsidy that will eventually be worth over £1 billion a year that make the Drax conversion to ‘biomass’ economical. But for electricity consumers in Britain, bills have already increased by over £1 billion ($1.55 billion) a year because of subsidizing wind farms; the Drax subsidies will increase them even more.
Those coal-fired power plants not converting to ‘biomass’ are being forced to close. An EU anti-pollution directive has resulted in the closure of several coal-fired power plants such as Kingsnorth in Kent, Didcot A in Oxfordshire and Cockenzie in Scotland with a combined capacity of almost 6,000 megawatts, which leaves natural gas to back-up wind power that cannot be relied upon to generate power when needed. For example, on a recent windless day, the country’s 4,300 wind turbines combined to generate just one thousandth of demand (29 megawatts).
But natural gas supplies from the North Sea are diminishing, making the country dependent on expensive natural gas from Qatar, Algeria, and Russia that will also be affected by the carbon tax when burned to produce electricity. Early in March, Britain’s supplies of natural gas in storage were down to 2 weeks of coverage–the lowest amount ever. The low electricity supplies are worrying some that the country may face major power cuts that it cannot endure due to its dependence on electricity not just for home heating, but also computers, traffic lights, and a whole host of other needs.
The irony of the situation is that Britain is moving away from coal as other countries which have been big proponents of reducing carbon dioxide emissions are moving to build more coal-fired power plants. Germany is building 20 new coal-fired power plants to back-up its wind and solar plants and to replace its nuclear plants; the first of which (2,200 megawatts) came on line last September. China, the world’s largest emitter of carbon dioxide, is building at least one coal-fired unit a week and is planning to build 363 more coal-fired power plants to fuel its fast growing economy. India is also planning to build 455 new coal-fired power plants to fuel its growing economy.
And then there is Japan, who is building coal-fired power plants to replace its nuclear power after the accident at Fukushima in 2011. Japan is currently using idled oil-fired power plants, but expects to build cheaper coal-fired power plants in the future. Tokyo Electric just added 2,600 megawatts of coal-fired generating capacity from two new plants that started operation this month. Other new coal-fired plants are expected to follow as Japan works on decreasing the time for processing permits from up to 4 years to a maximum of 12 months. In order to consume more coal, Japan is planning on revising by this October its Kyoto Protocol commitment to reduce carbon dioxide emissions by 25 percent from their 1990 level by 2020.[iii]
There is no carbon dioxide benefit to burning wood at the Drax plant.
But the real lunacy in the U.K. is the reasoning for converting the Drax plant to wood. The entire point is a belief that burning biomass would, on net, reduce carbon dioxide emissions, especially compared to coal. But that’s not the case in the real world, especially with the Drax plant. Any carbon reductions would take many years to be realized when dealing with the life cycle of the process of growing trees, making wood chips, transporting them to consumers, and combusting them into electricity. A researcher at Princeton University calculated that if whole trees are used to produce energy, they would increase carbon emissions compared with coal by 79 percent over 20 years and 49 percent over 40 years and that there would be no carbon reduction for 100 years until the replacement trees have matured.[iv]
The result of Britain’s energy policy is ever-increasing energy bills and likely power outages. According to the UK Daily Mail, Britain’s politicians “live in such a la-la land of green make-believe that they no longer connect with reality — and seem unable to comprehend the national energy crisis now heading our way with the speed of a bullet train. But the sad truth is that we ourselves should be neither laughing nor crying. We should be rising up to protest, in real anger, at those politicians whose collective flight from reality is fast dragging us towards as damaging a crisis as this country has ever faced.”
Unfortunately, the United States could follow in Britain’s footsteps if we are not ever vigilant in making our politicians aware of the energy system and how it works in this country. Germany’s residences already play 3 times what we pay for electricity and almost 20 percent of England is in energy poverty, providing more than 10 percent of their household income to non-transportation energy needs. We need to learn from their mistakes and insist our policy makers do so as well.
[i] Daily Mail, Eco madness and how our future is going up in smoke as we pay billions to switch from burning coal to wood chips at Britain’s biggest power station, March 8, 2013, http://www.dailymail.co.uk/news/article-2290444/Madness-How-pay-billions-electricity-bills-Britains-biggest-power-station-switch-coal-wood-chips–wont-help-planet-jot.html
[ii] Reuters, Britain’s carbon tax: unfair and ineffective, March 19, 2013, http://www.reuters.com/article/2013/03/19/column-wynn-carbon-uk-idUSL6N0CB4M820130319
[iii] Sydney Morning Herald, Japan turns back to coal-fired power plants, April 26, 2013, http://www.smh.com.au/business/japan-turns-back-to-coalfired-power-plants-20130425-2ihb0.html
[iv] Economist, Wood The Fuel of the Future, April 6, 2013, http://www.economist.com/news/business/21575771-environmental-lunacy-europe-fuel-future