Brussels, 02/12/2015 (Agence Europe) - On Tuesday 1 December, the European Commission announced that it had approved British aid to support the conversion of Lynemouth coal-fired power station to run solely on biomass.
The project, which was notified in December 2014, could generate 420 MW of electricity produced exclusively from wood pellets. The British government is planning to support the project in the form of a premium paid on top of the market price of the electricity generated (contract for difference). The project will receive aid until 2027 and, according to UK estimates, will generate about 2.3 TWh of low-carbon electricity per year. The plant is to use approximately 1.5 million tonnes of wood pellets per year, mainly imported from the United States, Canada and Europe.
The Commission opened an in-depth investigation in February of this year to assess whether the terms and conditions of the UK support, and in particular the financial calculations and estimates regarding key cost parameters, would avoid overcompensation. Its investigation reassured it over this point. The Commission found no evidence of the existence of competition distortion on the global wood pellet market. The Commission also found that the measures will not cause undue distortions of competition on the market for other wood-based products. (Original version in French by Élodie Lamer)