Mitsui Babcock Response to Energy Policy Consultation 9 4. RENEWABLES (ref para 2.9) 4.1 Biomass It was previously forecast that biomass should supply half of the anticipated renewables share of the power generation portfolio. Mitsui Babcock is seeking to develop its business in Biomass generation, but continues to find that project development is hindered by issues of economic viability, long planning approval timescales, uncertainty of fuel supplies and poor performance of flagship projects such as ARBRE. Biomass needs a long-term commitment and adequate subsidy and assurance on the supply of energy crops. Cofiring of biomass with coal in large power plants can achieve up to 20% reduction in CO2 emissions per MW generated. The technology is relatively inexpensive to install. The restriction on this market is the price and availability of fuel. There is a current problem that under the Renewables Obligation, from 2006, 75% of the biomass fuel must come from energy crops (as opposed to waste woodchips etc.). Because there is no certainty of availability of energy crops in sufficient quantities at acceptable prices generators must justify the economics over the period from plant start-up to 2006 and this is increasingly difficult as time passes and the deadline approaches.
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