A consultation on the UK Feed in Tariff scheme could spell bad news for biogas CHP.
The Department of Energy and Climate Change (DECC) have released the consultation reviewing support for Anaerobic Digestion and microCHP under the Feed in Tariff scheme.
Implementation is set to take place in January 2017. Measures proposed include:
- Removing FIT support for large AD plants > 500kWeà‚
- Further reductions in support for small and medium scale AD
- A default quarterly degression on top of the 10% contingent degression when cap limits are hit
- Maintaining the 5 MWe deployment cap each quarter up to 2019, meaning only 20MW of new capacity could be added each year
- Introducing sustainability criteria in line with the Renewables Obligation and Renewable Heat Incentive, including a minimum GHG emission target and specified land criteria on non-waste feedstocks
- Restricting FIT payments to electricity generated from wastes and residues derived biogas only, or limiting payments to non waste and residue feedstocks up to 50% of biogas yield
- Independent annual auditing of feedstock sustainability to ISAE 3000 standard or equivalent for plants greater than 1MWe
The industry’s reaction is that these tariffs and feedstock restrictions could leave new developments achieving unviable rates of return, and force many operators to abandon AD projects and consider taking business elsewhere.
Lucy Hopwood, Lead Consultant of Bioenergy and AD at NNFCC voiced concern over the proposals, saying “DECCs recent modelling for the RHI Reform suggested ‘bigger was better’ in terms of carbon cost-effectiveness, but the FIT proposals don’t align with this. Removing support for larger plants, cutting tariffs for smaller plants and limiting feedstock to low-yielding or highly competitive wastes and residues is likely to stop new development at any scale. Despite what AD has achieved and could continue to achieve, not only in terms of renewable energy production, but also waste management, carbon reduction, energy security and baseload stability, the future looks bleak for biogas power”.
Dr. Kiara Zennaro, Head of Biogas at REA claims “In all likelihood, if these proposals are adopted we will see the end for many of the new AD projects planned in the UK. Correspondingly, we will miss a significant opportunity to decarbonise the agricultural and waste sectors whilst supporting the rural and circular economies.”The consultation is open until the 7th of July. NNFCC highly encourage any stakeholders involved in the AD industry to respond to the consultation, with evidence and examples to make the Government aware of how proposals could affect you and the wider industry.