UK RWE Lynemouth coal to pellet power gets EU green light

UK Coal plant gets green light to burn wood pellets

Another of Britain’s remaining coal-fired power plants is to be converted to burn wood pellets mainly shipped in from North America, after the European Commission approved a £1bn subsidy contract for the project.

Lynemouth 420 MW power plant to be resurrected as a biomass plant after it stops burning coal at the end of this year. The plant is due to burn 1.5 million tonnes of wood pellets each year, mainly shipped in from the US and Canada as well as Europe. RWE Supply & Trading confirms plans to take an investment decision on the conversion to biomass for the Lynemouth Power plant in 2016. All activities to support project Lynemouth are continuing, including contracts for the engineering of the conversion and arrangements with local ports and rail companies for movement of biomass supplies to the station.

RWE’s Lynemouth power station in Northumberland is due to close by the end of this year under environmental rules, but has now green light to be retrofitted as a biomass plant following EU state aid approval for the consumer-funded subsidies. The decision came

The 420 megawatt plant, which produces enough electricity to power 450,000 homes, could be up and running again within 18 months, subject to a final investment decision early next year, RWE said.

Under the terms of the subsidy contract, awarded in April 2014, Lynemouth will be paid a fixed price of £105 for every megawatt-hour of biomass-fired power it generates until 2027 – well over double the current market price of power.

Any UK power units that keep burning coal will be forced to shut by 2025, under Government plans.

The decision also boosted Drax

The decision also boosted Drax, the Yorkshire coal plant that is awaiting state aid approval of a similar subsidy contract for the conversion of one of its units to burn biomass. Drax is in the process of converting from coal to biomass and was awarded a similar subsidy contract for the third of its six units, which it went on to convert earlier this year. If the contract wins state aid approval it would be more lucrative than the current ‘renewables obligation’ subsidy that the unit currently qualifies for.

UK Power generation 2014

UK Power generation 2014