Assessing Biomass Feasibility

Funding Assessment

Introduction

Funding Streams

Additional Support

Key Organisations

Funding Observations

References

Introduction

A successful funding application is often a crucial factor in whether a biomass project will actually proceed; the reasons for this are fairly straightforward. Firstly the capital costs of biomass combustion systems are significantly higher, in some cases by a factor of five, than standard fossil fuel technology¹. In all immature markets to instigate growth and a full exploitation of potential there needs to be a stimulus to dispel the relative uncertainty of investing in a system/activity which is not the ‘norm’. This applies to both suppliers and end users. Subsidies for capital investment have proven a successful method to overcome these factors and grow the biomass market in other European countries such as Sweden and Austria². An example of this within Scotland was indicated by Ron Hill (Energy Manager) of North Lanarkshire Council. When considering replacement options for existing heating systems the prospect of capital funding for a biomass system; coupled with the prospect of lower running costs and environmental benefits proved an attractive proposition (personal communication, 12th February 2007).

This section will outline the various funding options available for the different components of a project similar to that undertaken at Barony College i.e. for public sector/ academic buildings of a similar demand, located in Scotland and concentrating on heating primarily but also electricity. This will cover information regarding meeting capital costs, promoting supply chains (important when opening dialogue with potential suppliers), biomass research funds and also sources of assistance which may be useful when planning a project of this nature. Finally a list of key organisations in the biomass funding field and some observations on the funding climate for biomass will be presented.

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Funding Streams

In some cases these schemes may not be open for applications at the current time* (February 2007), however on the premise that they may be continued information regarding them has been included.

Scheme	Provider	Support Available	Eligibility	Contact Details
Demand Funding
Scottish Biomass Support Scheme (SBSS)*	Scottish Executive, Administered by Forestry Commission.	Max Grant £400,000 towards 40% additional instillation costs compared to a conventional system.	Organisations varying in size, public/private. Not householders or offered retrospectively.	T: 01349 860 919 W: www.usewoodfuel.co.uk
Low Carbon Buildings Programme. Phase 1, Stream 2B:	Carbon Trust	Supports biomass, principally boilers with or without CHP3. Will provide up to 40% of project costs and include energy efficiency measures and technical support from the Carbon Trust. Relevant for new build and major refurbishment projects.	Open to not for profit organisations. Will consider all forms of biomass. Open until 01/04/09.	T: 0800 915 0990 W: www.lowcarbonbuildings.org.uk
Low Carbon Buildings Programme. Phase 2.	Carbon Trust	Does not include energy efficiency measures or technical support. Funding up to 35% of project costs, not including VAT.	Not for private bodies.	T:0870 423 2313 W: http://www.lowcarbonbuildings phase2.org.uk/
Biomass Heat Acceleration Project	Carbon Trust	£5million fund over five years to make biomass heat in the UK more sustainable by reducing costs and addressing supply chain risks.	Biomass heating in the scale 0.2-2MWth.	T: 0207 170 7041 W: www.carbontrust.co.uk
Scheme	Provider	Support Available	Eligibility	Contact Details
Demand Funding
Green Energy Trust	Scottish Power	Supports the exploitation of renewable energy sources. Particular focus on education as regards renewable energy and community benefits. Will cover 50% of project costs up to £25,000.	Public sector and local authority organisations.	T: 0141 568 3492 W: www.scottishpower.co.uk
Scottish Community and Householder Renewables Initiative (SCHRI)	Energy Saving Trust / Highlands & Islands Enterprise	Will support automated woodfuel heating. Capital grants up to £100,000 with feasibility maximum of £10,000.	Community organisations (including universities and local authority) & householders	T: 0800 138 8858 W: www.est.org.uk/schri
Scheme	Provider	Support Available	Eligibility	Contact Details
Research Funding
Forest Research	Forestry Commission	Under the ‘Woodfuel Programme’ opportunities to assist in development of biomass industry in UK through producing guidance with forestry sector and universities.	Doesn’t include biomass from joinery residues, straw, grasses and recycled material.	T: 0138 786 0264 W: www.forestry.gov.uk
Agri-Industrial Materials Scheme	DEFRA	Will support supply chain assessment and development. Mainly focused on energy crops however.	Universities, public and private R&D institutions	W: www.biomatnet.org
Supply Funding
Scottish Biomass Support Scheme (SBSS)*	Scottish Executive, Administered by Forestry Commission.	Will provide up to 40% of the additional costs incurred when entering the biomass supply chain, depending on circumstances and activity.	Organisations of varying size both public and private. Not householders and funding not offered retrospectively.	T: 01349 860 919 W: www.usewoodfuel.co.uk
Farm Business Development Scheme	Scottish Executive	Will fund diversification enterprises or expansion activities. Also covers processing of forest products. Will cover 50% of costs to £25,000 maximum.	Farms	T: 0169 845 6329 W: http://www.scotland.gov.uk
Anaerobic Digestion Funding
The two schemes below both offered support for anaerobic digestion products and are now closed; from research there does not appear to be any other schemes in support of anaerobic digestion at the current time.
Transforming Waste Scotland*	Big Lottery Fund	Funding to develop solutions for waste management. £30,000-240,000 grants.	Closed for applications as of 2004.	T: 0141 222 5645 W: www. transformingwastescotland. org.uk/
Organics Capital Support Programme*	WRAP	Aim to reduce biodegradable municipal waste. Capital support for anaerobic digestion (30%).	Closed as of 02/2006.	T: 0808 100 2040 W: www.wrap.org.uk

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Additional Support

In addition to the schemes outlined above there are several other schemes and polices which will make undertaking a biomass project more attractive.

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Key Organisations

The following is a list of key organisations within the biomass funding field:
Forestry Commission, Carbon Trust, Scottish Enterprise, Scottish Executive, Energy Saving Trust, Government Bodies i.e. DEFRA, DTI.

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Funding Observations

From researching the plethora of different funding schemes which are / have been available to support biomass it becomes clear there is a lack of continuity and clarity as regards the identification of a suitable scheme. This arises due to the fact there are many different factors each scheme must address in terms of what is funded. Each scheme can differ in terms of: -

Furthermore many of the schemes identified only run for a specified period and may have been discontinued. Barony College would have been eligible for funding under the Community Energy Programme (a £60million fund for public sector district heating projects) had this scheme not been withdrawn in 2006. In addition a funding stream may continue to be available but the window for applications closed i.e. the SBSS had a final deadline for 2007 applications of 2nd February. In conclusion it is shown that finding a funding stream that will match all the elements of a particular project is a complex matter.

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Footnotes