Breakthrough Siwertell delivery for handling coal and biomass in the UK

British legislation is driving a shift away from coal-fired power generation towards lower-carbon alternatives such as biomass. This has created a strong demand for Siwertell screw type multi-fuel handling solutions

Siwertell has recently commissioned its first two ship unloaders ordered for coal/biomass handling in the United Kingdom.

Manufactured and assembled in Italy, the type ST790-D screw-type unloaders are equipped with slewable gantry tail conveyors.  They have been installed at the ABP Port of Immingham and will be used to unload imported biomass to fuel the Drax power station.  Drax is responsible for supplying around 7-8% of the UK’s electricity.

The client, ABP, approached Siwertell in 2013 after seeing a Siwertell unloader in operation at the Port of Liverpool, UK. ABP was impressed by its continuous, high capacity, dust-free operation and ease of use in wind speeds of up to 56 miles per hour (25m/s).  ABP had a strong relationship with Siwertell throughout the ordering, construction and commissioning phases, says Head of Projects at ABP, Simon Brett. “There was regular dialogue and site visits to enable us to establish our criteria for the machines.”

A low level of cargo degradation was an important requirement. Biomass needs careful handling, as the combustion process is adversely affected by fuel that does not meet the required specification. Furthermore, biomass degradation creates dust, which presents an increased risk of explosion and fire.

“Siwertell unloaders have an excellent reputation for minimal cargo degradation. This is supported by numerous tests carried out by independent surveyors, along with feedback from many satisfied customers,” says Lars-Eric Lundgren, Regional Sales Manager at Siwertell.

“Companies naturally want to minimise the fire and explosion risks when selecting machinery to handle this mix of fuels. To ensure safe multi-fuel handling, Siwertell unloaders incorporate safety features originally developed for its 4S safe sulphur handling system. Furthermore, the economic benefits of investing in unloaders that can handle both coal and biomass without adjustment should not be underestimated.”

Biomass supply chain

Immingham is already the UK’s largest dry bulk cargo port, handling in excess of 20 million tonnes of dry bulk commodities each year, including coal, iron ore, biomass and agri-bulks. The new Siwertell unloaders are a key part of the development of the Immingham Renewable Fuels Terminal (IRFT), which is fundamental to the evolution of the supply chain for biomass in renewable power generation.  The IRFT is designed as a multi-customer terminal, and Drax is the first customer to use the facilities. Wood pellets manufactured in the US are further transported by rail to the Drax power station 50 miles (80 km) away.

The IRFT has been designed to handle pelletised biomass arriving in dedicated self -trimming bulk vessels of between 25,000 and 50,000 dwt. At full capacity the terminal will handle about 6 million tonnes of biomass per annum, with the unloaders in almost constant operation. Mr Brett said that the unloaders are operating as expected to ABP’s satisfaction.

Conversion to biomass

In 2012 Drax announced its intention to convert three of its six generators to burn biomass. The first was converted in April 2013, the second in October 2014. Development of the IRFT has vital strategic importance for the Drax power plant. The third generator will be converted in the near future.

In addition to other UK and EU regulations and incentives (see box), low-carbon energy generators can participate in Contracts for Difference (CfD). Participants are paid a price for their electricity based on the difference between the average market price and the cost of investment made in low-carbon technologies. Drax used the CfD mechanism to apply for government funding for the conversion of two of its six units from coal to biomass. The company experienced the complexities of the British regulatory system, when its application was at first accepted, and then denied for the second of the two units. Drax successfully appealed against this decision, but in a further twist, the Department for Energy and Climate Change appealed the high court ruling and won, leaving the second unit ineligible for government funding.

Market potential

This is the first Siwertell unloader delivery to the UK for combined coal/biomass handling, says Mr Lundgren. “It may well be the first of many similar orders as the British government seeks to reduce the level of coal used in UK power plants. Pressure is building on UK companies to source more of their energy from renewable, low-carbon sources, and we anticipate a much greater demand for biomass used in combination with coal. This is true not just in the UK but in the wider EU and beyond.”

UK renewables obligation and EU emissions trading system

Drax, along with all other UK energy suppliers, must comply with the government’s renewables obligation (RO), which mandates that a certain proportion of the electricity supplied must come from renewable sources. The specific proportion is published annually on 1st October for the following financial year. The Office of the Gas and Electricity Markets (Ofgem) issues renewables obligation certificates (ROCs) to power generators, based on the level of electricity generated from renewable sources. These can then be traded with suppliers for a premium on top of the wholesale energy price. ROCs have no fixed value – the price paid is subject to negotiations between the generator and supplier. Electricity suppliers must submit their ROCs to Ofgem as evidence of their compliance with the RO. Any supplier that does not present a sufficient number of ROCs to Ofgem must pay a penalty, known as the ‘buy-out price’.

In addition to conforming to regulations on the level of energy generated from renewable sources, UK power generators must comply with EU-wide legislation on greenhouse gas emissions. The EU emissions trading system (ETS) sets a cap on the level of permitted greenhouse gas emissions from over 11,000 factories and power plants operating in the EU. Eligible companies can buy and trade allowances, permitting the emission of one tonne of carbon dioxide, or the equivalent amount of nitrous oxide or perfluorucarbons. Each company must be able to produce enough allowances to cover its emissions for the year, or risk paying a fine.

Initially, the introduction of the EU ETS led to considerable instability in the price of carbon, inspiring caution amongst potential investors in low-carbon technologies. In order to reverse the resulting decline in investment the UK government set a carbon floor price of, initially, £16 per tonne, and introduced measures to boost low-carbon investment via the climate change levy. This is a tax charged on electricity, gas and solid fuels such as coal. Businesses can benefit from relief under a climate change agreement (CCA) administered by the Department for Energy and Climate Change (DECC).  A target to reduce energy use and CO2 emissions is agreed within the terms of the CCA and, should a business meet its targets at the end of each two-year target period, it is permitted to continue to benefit from the discount on the CCL. The discount amounts to a 90 percent reduction of the CCL on electricity bills and 65 percent on other fuels.