14:30 The Minister of State, Department of Energy and Climate Change (Andrea Leadsom)

Since April 2014, generating stations with a capacity of 1 MW and above, using solid or gaseous biomass, have been required to report on whether they meet greenhouse gas emissions and land use criteria. The draft order consolidates previous changes and makes compliance with the greenhouse gas emissions and land criteria mandatory for generating stations using solid or gaseous biomass in order to receive support under the RO. The measure will ensure that renewable generation from home-grown or imported solid or gaseous biomass receives financial support only if that biomass delivers genuine greenhouse gas emissions savings compared with fossil fuel, and if it is sourced from land that is sustainably managed, not from land with a high biodiversity value or carbon stocks.

Biomass power generation is already required to meet a greenhouse gas savings target of at least 60% compared with the EU fossil fuel average, and that target will become tighter in 2020 and in 2025. The draft order introduces a new methodology for calculating an annual average greenhouse gas emissions figure for all biomass used by a generating station, excluding certain types of waste. The purpose of the calculation is to ensure that generators are not penalised if an individual biomass consignment exceeds the greenhouse gas target due to circumstances beyond their control, such as bad weather increasing transport distances. That is subject to the provision that each individual consignment of biomass must not exceed an overall ceiling. The provision prevents mixing extremely high emission consignments with lower emission consignments as a means of washing through fuel consignments with an unacceptably high greenhouse gas value.

Ofgem will regulate compliance with the mandatory greenhouse gas and land criteria. Generating stations using biomass that have a capacity greater than or equal to 1 MW must prepare and submit an annual sustainability assurance report compiled by a third party auditor or verifier. Equivalent sustainability criteria are included in the first bioenergy contracts for difference, which were awarded in 2014, and are comparable to those set out in the renewable heat incentive scheme regulations, with some differences to account for the smaller scale nature of the heat market and the fact that most biomass supported under the renewable heat incentive is expected to come from UK sources.

The renewables obligation has played a key part in delivering our renewable energy goals. With some exceptions, the renewables obligation scheme will remain open to new capacity until 31 March 2017 to allow a period of transition to the contract for difference and capacity market schemes, which are expected to provide support for large-scale renewables in a more cost-effective and targeted way. The consolidation and changes set out in the order will keep us on a firm path as we complete that transition.

I am sure that members of the Committee will appreciate the value and importance of introducing mandatory biomass sustainability requirements, which, put simply, mean that generators will receive support under the renewables obligation only for using biomass that comes from a sustainable source and delivers real greenhouse gas savings. The policies in the order relating to regaining support under the renewables obligation following termination of an investment contract in certain circumstances, and moving between the capacity market and the renewables obligation, will ensure a smooth and fair transition for generators and consumers alike.

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