Burning demand for straw power

There is just one large-scale dedicated straw-fired power station in the UK at Ely in Cambridgeshire, using some 210,000t of mostly wheat straw per year.

However, development company Eco2 has just started construction of a similar sized 38MW power station at Sleaford in Lincolnshire and has also been granted planning permission for another facility at Brigg. Commercial operation at the Sleaford site should begin in January 2014, says David McDonald, operations director for Eco2.

Once complete, the Sleaford renewable energy plant will use around 240,000t of biomass a year, mainly large-bale (Hesston or Quadrant-type) wheat straw from within a 50-mile radius of the site. It will also be able to take straw from other crops, such as oilseed rape, and up to 40,000t of chipped wood, from willow coppice and clean, untreated wood.

“The majority of our fuel supply had to be in place prior to securing finances, so we’ve contracted 150,000t already, but we are looking to procure more fuel and will be taking straw from next harvest [2013].”

Together with these sites, there is a third smaller power station in East Yorkshire and, once operational, the four power stations will require around 750,000-800,000t of straw a year. In addition, Drax power station also burns around 80,000t of straw (wheat and oilseed rape) a year and Eco2 is applying for permission to build another 38MW straw-fired plant at Mendlesham in Suffolk.

Straw availability

A recent HGCA study suggests there is sufficient straw produced in the UK to supply the expanding energy market and meet existing demands from the livestock sector. It estimates around 12.2m tonnes of straw is produced each year, more than half of which (7.7m tonnes) is from wheat. About 30% is used for animal bedding on farm, 30% is sold off-farm (mostly for bedding) and about 40% is chopped and returned to the soil.

However, it recognises there is no simple answer to the age-old question of whether to chop or bale straw and says it will be largely be dictated by region given the relatively bulky nature of straw and expensive haulage costs.

Factors to consider

Additional revenue. The biggest draw for many farmers will obviously be the additional revenue that can be obtained from selling straw.

Most of the straw-for-power contracts are long term (eight to 12 years) and feature an index-linked price that is typically upwards of £40/t.

While it means farmers signed up to them will miss out on spikes in the open market price, it does offer an element of certainty for cash flow and budgeting.

“The price won’t reflect the volatility of the straw market, so some years suppliers will gain, others they’ll lose,” says Mr McDonald. “The main thing is that the contracts provide stability. I’d never recommend a farmer commits their entire straw tonnage to it, but at least its another option to consider.”

The HGCA suggests that selling a proportion at harvest may also help reduce the need to sell grain off the combine, allowing it to be stored and sold forward for later delivery, potentially for a higher price.

Impact on soil fertility. The loss of soil nutrients and organic matter from straw removal is probably the biggest factor for many growers choosing not to bale straw.

The Potash Development Association estimates that winter wheat or barley crops typically remove around 8.4kg of phosphate per tonne of fresh material (grain and straw), 10.4kg/t of potash and 2.6kg/t of magnesium. The straw alone is estimated to remove 1.2kg/t, 9.5kg/t and 1.2kg/t respectively.

To maintain soil indices, this total offtake will have to be replaced through artificial or natural fertilisers and the cost of doing so must be factored into any decision, says AICC chairman Mike Warner.

“You’ll probably also have to keep a closer handle on soil indices, so rather than sampling every four years, you might be doing it every two. This will also have a cost, which is in addition to bringing levels back to where they should be.”

Martin Lane from soil mineral specialists Field Science says it’s also important to consider other micronutrients. “The loss of P and K is easily calculated and restored, but there are 102 mineral elements in soil and it can be difficult to know exactly how much you’ve lost of other things.”

Impact on organic matter. Reduced organic matter being returned to soil is another important consideration and levels should be maintained through other means, says Mr Warner.

For Velcourt’s Adrian Whitehead, who manages 2,600ha of combinable crops around Sleaford, this is one of the main reasons for not signing up to long-term straw contracts.

“We bale once every four years in rotation and are using sludge to build organic matter. It’s something that’s been neglected in the past and we know that reduced organic matter can lead to higher nitrogen requirements.”

However, the HGCA report dispels the common belief that incorporated straw is worth more than the market price due to its nutrient and organic matter value. It suggests the nutrient value of wheat straw, including nitrogen, phosphate and potash is about £18/t. “Even at the lower end of the market value scale of straw at about £40/t for energy, or £140/ha, it leaves some margin for profit.”

Logistical considerations. The extra “hassle factor” of baling after harvest is somewhat harder to quantify, but is equally important, says Brown & Co’s Rob Meadley.

The main issue is the risk of delaying the establishment of following crops – especially oilseed rape – when waiting for fields to be cleared, in a “catchy” harvest.

Power stations normally want an even supply of material through the year and farmers are generally responsible for loading lorries when they come to collect straw, he adds.

“Any decision wouldn’t be purely financial, but would have to take into account these agronomic and operational factors too,” concludes Mr Whitehead.

Typical straw-for-energy contract terms 
  • Long term (8-12 years)
  • Some feature a break clause half way, others do not
  • Index-linked price – typically £40/t+
  • Minimum tonnage of 250-300t
  • Price based on 15% moisture – wetter loads accepted (up to 25%), but price reduced accordingly
  • Specific bale size dimensions – limited flexibility due to automated nature of power station processes
  • Some scope to negotiate straw collection depending on location
  • Fixed tonnage – farmers responsibility to supply in all years
  • Some leeway on annual volume (typically +/- 5-10%); force majeure may apply in exceptionally wet/dry years
  • Farmers responsible for bales up until collection – need decent storage site, space to load and insurance cover

Bailing straw for energy 
Pros Cons
Attractive revenue stream – check price covers additional costs Loss of nutrients and organic matter – needs replacing through other means
Long-term fixed price reduces volatility and aids budgeting Potential delays to establishment of following crops
Reduced combine fuel use from not chopping straw

 Contracts tie in growers for long period – be sure you can deliver

Cleaner stubbles could aid establishment of following crop

Ideally need area of hardstanding/barn to store bales and minimise stack wastage

May be reduced disease carryover from straw removal

Impact on other micronutrients/operational aspects difficult to quantify