The government today (July 27) claimed it had provided certainty for investors in technologies such as energy-from-waste and anaerobic digestion as it confirmed that the system guaranteeing consistent subsidies for renewable energy technologies, known as ‘grandfathering', would apply to biomass plants.
The announcement means that facilities using EfW and AD, as well as dedicated biomass and technologies, such as gasification and pyrolysis, to treat waste will be able to receive the same level of support under the Renewables Obligation (RO) system of subsidies as they did when first accredited, for a 20 year period.
With no other renewables technologies being treated in this way, concerns had been raised that the situation was holding back the development of biomass-related technologies.
But, in a statement, DECC said its decision to add grandfathering for the biomass-related technologies “provides the certainty that investors have been looking for electricity from dedicated solid and gaseous biomass, energy from waste, anaerobic digestion and advanced conversion technologies such as gasification and pyrolysis.”
Following today's confirmation, which came in DECC's response to the consultation it launched in March 2010 on the ‘grandfathering' policy (see letsrecycle.com story), AD plants that are accredited under the RO by March 31 2013 will receive two ROCs per MWh, regardless of any changes to the AD banding made under reviews – the first of which is scheduled for autumn 2010.
Similarly energy-from-waste facilities with combined heat and power technology accredited by the same point will receive the current level of subsidy for their technology, which is one ROC per MWh.
In the original consultation document, DECC had said there was “insufficient evidence” to introduce grandfathering for ‘advanced conversion' technologies, such as gasification and pyrolysis.
But, in its response today it said that, due to views received in the consultation, it has now decided to grandfather all ‘advanced conversion' technologies (ACT), explaining that: “This will mean ACT can compete fairly for fuel against other grandfathered technologies such as EfW and should also ensure investment in developing these important emerging technologies is maintained.”
The department had also originally proposed that facilities using dedicated biomass – which could include materials such as waste wood – only receive grandfathering support for capital costs, while the fuel element's banding could change under review.
Today's announcement will come as a great relief and follows many months of intense discussions between the industry and Government
Gaynor Hartnell, chief executive, Renewable Energy Association
However, it said that, following concerns that this would not work, DECC said it would adopt a policy of grandfathering support for dedicated biomass – albeit without existing generators being able to be “up-banded” if RO support for new biomass plants is increased in the future.
DECC said further details on implementing the changes would be considered as part of the banding review, and in particular how it work for facilities moving between different processes in different periods.
REA
Today's announcement came as part of a raft of measures unveiled by energy secretary Chris Huhne, including the first ever ‘Annual Energy Statement', which set out 32 action for government and energy and climate change policy – including the need to use as much as “economically possible” of the 100 million tonnes of waste generated every year and convert it to electricity, heat and transport fuel.
The ‘grandfathering' announcement was welcomed by the Renewable Energy Association, which claimed that there were currently 5,000 megawatts of projects using the technologies in question “stalled” in the development process.
The association's chief executive, Gaynor Hartnell, said: “Today's announcement will come as a great relief and follows many months of intense discussions between the industry and Government.
“This brings most bioenergy projects into line with other technologies such as wind. Levels of financial support (ROCs) for completed projects are now guaranteed for 20 years, even if the rules change in the future. This should unlock some £13 billion of much-needed private investment in the sector.
“For this to happen, lenders must have confidence in the support mechanism. This had been lacking, but today's announcement gives clarity.
Ms Hartnell added that, as well as creating energy generating capacity, the projects also had a major role to play in areas such as waste management, as well as encouraging innovation due to their often “cutting edge” nature.
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