Energy giant RWE has announced that it is suspending work on a biomass plant at Tilbury:
RWE npower has suspended development of a dedicated biomass power plant at Tilbury Power Station blaming lack of detail in the Energy Bill and difficult market conditions.
The company announced the move in a statement released yesterday, confirming work would be halted while "options on project feasibility are assessed and reviewed".
A few days ago, I highlighted Robert Wilson's research on the scope for unmothballing conventional power plants. While RWE's decision on Tilbury might make the need for unmothballing an even more pressing question, there were some other issues in his article that appear relevant. One of the documents he cited, an Ofgem assessment of likely future capacity, reveals that a very large proportion on new capacity is expected to come from biomass (purple in figure below); the contribution from wind (puce for onshore, brown for offshore) is monumentally pathetic.
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Click for full sizeThe reason for this is that these are de-rated capacities, ie downgraded to take into account their likely operating performance. Thus all those wind turbines that are alleged to power small cities are, quite properly, counted as only being able to power large villages (from time to time).
So, investors in biomass plants are very nervous, yet the government is relying on them to provide a large chunk of new capacity. Are the contradictions in government energy policy coming home to roost?