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Tuesday, February 09, 2010
Tuesday, February 09, 2010
Latest Procurement News
Posted: Tuesday, November 17, 2009, 9:06AM
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KNOWLEDGE MANAGEMENT TAGS
"Governance", "Corporate Social Responsibility", "Supply Chain Management"
Critical supply chain issues threaten UK biomass power plans
Plans to increase the use of biomass for UK power generation will fail unless critical supply chain issues are resolved, experts have warned.The UK government's Department for Energy and Climate Change (DECC) has set a target for 15 per cent of the nation's renewable energy to be generated by biomass by 2020.
By 2014, power companies such as Drax Group and MGT Power plan to bring seven large-scale biomass power generation facilities on line generating a total of 2,100 MW - enough to power 600,000 homes. And the UK government's Carbon Reduction Commitment (CRC) incentivises public sector organisations such as Aberdeen City Council to invest in additional small-scale biomass boilers.
But according to a new report from independent research firm Verdantix, the biomass industry finds that critical supply chain problems will block planned investments. Investments in biomass equipment risk failing to meet operational targets as UK biomass supply will only meet 5 per cent to 10 per cent of projected demand by 2014 and large volume imports face significant supply chain risks, the study reported.
"The UK government, power generators and city councils have ambitious plans to scale-up the use of biomass for renewable power generation" said James Pinney, the Verdantix analyst who led the research.
"Our research with industry insiders shows that UK biomass supplies will only meet small-scale demand, typically within a 60-mile radius of the biomass facility. The low volume of UK supply means that every year power generators will import millions of tonnes of wood chips, elephant grass, palm kernels and olive pellets to feed their huge biomass facilities. But uncertainties surround the reliability and cost of importing biomass from countries like Canada, Malaysia, Russia and Sweden."
The Verdantix report recommends trading networks to deliver large volume imports. EDF Trading, Energy Crop Company and Lantmännen Group operate businesses that manage the cultivation, processing and/or distribution of biomass fuels. These firms will play a key role in securing reliable supplies of imported biomass for the UK market, according to the study.
The research also suggests maximising yield of UK biomass sources and enhancing biomass processing. It goes on to note that it will be necessary to improve local biomass logistics services.
Procurement Tags - Corporate Social Responsibility, Governance, Supply Chain Management
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