* RES had planned to build 100-MW biomass power plant
* Firm says government subsidies, policy inconsistent
LONDON, March 7 Renewable energy developer RES
has stopped a 300-million-pound ($500 million) project to build
a biomass plant in Northumberland, northeast England, due to
what it called inconsistent government subsidies.
The 100-megawatt (MW) plant was scheduled to be built at the
Port of Blyth, creating 300 construction jobs and 50 operational
jobs, RES said.
The company received permission to build the project from
the government last year.
"It's bitterly disappointing for RES that we are unable to
bring this exciting project forward, and deliver the significant
boost it would have represented for the Blyth and Northumberland
economy," RES Chief Operating Officer Gordon MacDougall said in
"However, the gradual erosion of support for dedicated
biomass leaves us with no other option," he added.
The British government rewards renewable energy plants,
including biomass stations, through a subsidy scheme and plans
to replace it with a guaranteed power price programme from next
The government introduced a 400-MW capacity cap last year on
new biomass projects under its main renewable energy subsidy
scheme, the Renewables Obligation mechanism.
"The cap represents a radical downsizing in government
ambition for the technology from a target of 4,000 MW in 2011 to
a cap of 400 MW in 2013, long after the industry had invested
significant sums in developing projects," RES said.
Sources of biomass include wood, plant-based materials or
municipal solid waste, which are burnt to produce heat or
Other utilities, such as German power company E.ON
, have shelved biomass investments over the past year
due to unfavourable regulation and biomass policy.
E.ON scrapped plans to build a 150-MW biomass-fuelled power
plant last year in southwest England.
Rival utility RWE also decided to close its
converted biomass power plant at Tilbury, east of London, due to
a forecast drop in power prices and a lack of investment from
the Germany-based parent group.
($1 = 0.5982 British pounds)
(Reporting by Nina Chestney; Editing by Dale Hudson)