Planting the idea of cheaper fuel with eye on environment

May 8 2008 by Karen Dent, The Journal

As businesses try to cut their power bills – and their carbon footprint – Karen Dent speaks to the companies that consider biomass to be a burning issue.

THINK of alternative energy and solar, wind and water power may immediately spring to mind. But the green revolution is not confined to harnessing the elements, and one of the big growth areas in the North East is the development of power from burning wood.

Far from being an ecological no-no, burning processed wood pellets, known as biomass, to generate power is an important part of the green revolution. Unlike fossil fuels, wood is a renewable, sustainable energy source that is 90% carbon neutral. Waste wood products can be recycled for use as biomass.

Crucially, from a business point of view, it can potentially halve energy bills.

Businesses obtaining power from renewable sources are also exempt from the Government’s Climate Change Levy, introduced to cut the carbon footprint left by industry.

But opting for a biomass boiler is not a cheap option, according to Athole McKillop, a partner with Land Factor, a firm of chartered surveyors which manages the Allendale estates near Hexham in Northumberland.

He oversaw the installation of a biomass boiler at Bearl, a former farm steading converted into 10 offices. The development’s 115kw wood-chip-burning boiler heats 15,000sq ft of office and ancillary space.

“I think it’s something people should be considering in the right circumstances. I would certainly be recommending it as something they look at but it’s not going to be the right solution for everyone,” he says.

“Like-for-like it can cost four or five times the equivalent of an ordinary fuel boiler. There are significant upfront capital costs.”

Bearl’s biomass boiler was installed in November 2006 and has made real inroads into the office complex’s fuel bills because the estate already produces timber.

“The estate has been growing trees and harvesting them for many years. This is just using the timber as a different product,” says McKillop. “It is adding value to what the estate is doing. It was a good opportunity to utilise that as green heat.”

He believes the biomass boiler is an added attraction for businesses considering office space at Bearl, especially as interest in green issues increases.

But he said: “If anybody is thinking about it, it needs to be carefully planned – the boiler, fuel storage, fuel handling and delivery takes up more space.”

Businesses can apply for grants to help them meet the capital costs of converting to biomass power. Defra runs a biomass energy grants scheme which can fund around 30% of the cost of installing the equipment.

NEWHeat, a free service supported by regional development agency One NorthEast, sends out teams to businesses to look at their needs, assess whether biomass heating is right for them and produce a feasibility report.

Project director David Clubb said: “Around 90 businesses have had site visits and around 12 of those have gone on to express an interest. The technology is fine for use for domestic level right up to industrial users. We are specifically targeting businesses and social enterprises.”

The current high cost of oil means he is finding it easier to persuade businesses to consider wood-burning systems – especially if they are extending their premises or looking to replace their old boiler anyway.

“Fuel costs have probably doubled in the last two years,” he said. “At the end of the day, most businesses are interested in increasing profits and cutting costs. A couple of sites now have boilers where they have good local wood for supplies.”

In addition to advising the team at Bearl, NEWHeat also worked with the new Sainsbury’s supermarket at Alnwick which has installed a wood-pellet boiler to heat the store. Other clients include Matfen Hall Hotel in Northumberland, which is looking into installing a 500kw wood-chip system to heat the hotel and pool, using wood from its estate.

Biomass energy is also utilised on a larger scale. Helius Energy is one of a number of renewable power companies based on Teesside, which operates biomass projects in the UK and South Africa.

The Middlesbrough company is currently awaiting final planning permission for its flagship 65mw power station at Stallingborough near Immingham, Lincolnshire, which would be able to produce sufficient biomass energy to power 120,000 homes.

It has also revealed plans for a £24m renewable energy plant in Moray, Scotland, after signing a deal with the Combination of Rothes Distillers (CoRD) to develop a 7.2MW power generator burning woodchip and by-products from the distillery. In addition to heating the distilling site, the plant would produce additional power to be exported to the National Grid.

And UK Wood Recycling (UKWR), which is also based in Middlesbrough, supplies around 80,000 tonnes of biomass fuel annually to the SembCorp Biomass Power Station.

Also known as Wilton 10, the plant is the UK’s first purpose-built wood-burning power station.