Norbord calls on the government to amend biomass subsidies
Published: 14 October, 2016
Biomass power plants already receive government support, but the industry wants more. However, the type of technology used to convert coal-fired power stations to biomass is not currently eligible to bid for the new subsidies.
Norbord believes that there are several reasons why this technology should not receive subsidies but that the most basic is that wood is, fundamentally, very different from other renewable energy sources such as wind and solar power.
According to the company, subsidies distort the market for timber and applying the same incentives to wood as to wind or solar power generation is nonsensical.
Norbord is one of many manufacturers for whom wood is the principal raw material and depends upon the ability to buy materials competitively in a free and open market. As a manufacturer, Norbord burns process residues to generate 75% of its heat energy from on-site biomass plants for which it receives payment under the government's Renewable Heat Incentive.
However, this payment does not get close to offsetting the impact of wood price increases resulting from subsidies paid to biomass power stations.
Norbord says the government needs to amend the existing subsidy process to remove this unfair incentive, and must not cave in to biomass energy companies who want even more public money to subsidise their businesses.