The UK Government has announced its decision on the support levels given to renewable energy technologies supported under the Renewables Obligation (RO).
The DECC review has been broadly welcomed, with highlights including the government commitment to maintaining strong support for energy from waste CHP
Following strong industry representation, the Department of Energy and Climate Change (DECC) has confirmed that Energy from Waste CHP will retain 1 ROC per MWh of electricity generated, rather than the cut to ½ ROC proposed in the consultation.
The industry had been calling for the 1 ROC level of support to be retained to ensure that a pipeline of around 500 MW of new energy from waste CHP could still be built.
DECC’s announcement confirmed that bioenergy CHP will lose its RO uplift in 2015 – two years before the end of the RO. Whilst Government is proposing to replace this support with revenues from the Renewable Heat Incentive, investors remain sceptical over the value and certainty that of the new instrument.
Rejection of calls for a ‘bridge’ in the RO to 2017 has increased the urgency to establish a CHP ‘band’ under the RHI and confirm future budgets.
Alongside the announcement of the RO banding review, DECC has reaffirmed the Government’s position that gas will continue to play an important role in our electricity generation mix.
In stark contrast to the position on energy from waste, there are no incentives to ensure that a new generation of gas plant is built as CHP to mitigate emissions and limit use of fossil fuels.
Commenting on the announcement Tim Rotheray, Head of Policy at the CHPA, said:
“There is no question that this is great news for energy from waste CHP plant. DECC has listened to the industry’s representations on the need for incentives to drive efficiency and provided the reassurance that developers need. This announcement will be warmly welcomed by the many industries and communities that will benefit from new generation of renewable CHP delivering affordable, low-carbon heat and power.
“The challenge now is for DECC to extend this commitment to efficient use of energy to biomass- and gas-fired plant. Right now, what the industry desperately needs is the clarity that can make the RHI a bankable incentive. The right decision will ensure that we extract the full value of these important resources, keeping bills down for businesses, homes and communities.
“We also need swift action to plug the gaping hole in energy policy that is now apparent as the focus switches to gas. Without effective incentives for CHP, to match those now confirmed for Energy from Waste, then the opportunity to minimise the impacts and maximise the benefits of a new generation of gas plant will be lost.”
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