AD subsidy available through CfD scheme

The latest stage of the CfD scheme, which sees low carbon electricity generators incentivised for the power they produce, was announced by the Department for Business, Energy and Industrial Strategy (BEIS) yesterday (9 November).

The Anaerobic Digestion and Bioresources Association (ADBA) has welcomed the funding, but has criticised the scheme, which is only available to AD projects with a capacity to produce over 5MW. ADBA claims that this limit will prevent the “vast majority of plants” from accessing Contracts for Difference (CfD), as most fall under this threshold.

Contracts for Difference

As part of its commitment to spending £730 million annually on renewable electricity projects over 15 years, the Government has set out further details for the next Contracts for Difference auction, where companies will compete for the £290 million worth of contracts for renewable electricity projects.

This allocation round is specifically aimed at less established technologies, including AD over 5MW, dedicated biomass with combined heat and power, offshore wind, and wave, tidal stream and geothermal projects.

Investment

Business and Energy secretary Greg Clark said: “We’re sending a clear signal that Britain is one of the best places in the world to invest in clean, flexible energy as we continue to upgrade our energy infrastructure.

“This is a key part of our upcoming Industrial Strategy, which will provide companies with the further support they need to innovate as we build a diverse energy system fit for the 21st century that is reliable while keeping bills down for our families and businesses.”

The consultation on fuelled and geothermal technologies will run until 20 December.

The Government has set out draft Contract for Difference administrative strike prices (£/MWh, 2012 prices), as seen in the table below. Final strike prices will be confirmed at least 10 days ahead of the allocation round opening.

Missed opportunity

Thom Koller, policy officer at the Anaerobic Digestion and Bioresources Association (ADBA), commented: “We are pleased to see government plans to encourage investment in clean energy infrastructure, but BEIS risks missing a huge opportunity to continue the growth of the UK’s biogas electricity sector.

“With the RO [Renewables Obligation] closing next year, and the Feed-in Tariff tightly capped, there will soon be no support available for sub 5MW anaerobic digestion – as the vast majority of plants are at this scale, they are not able to access Contracts for Difference.

“Electricity from biogas is baseload generation which complements other renewables and ensures security of supply, while cutting carbon emissions. With proper support, the industry could add 250MW of capacity in the next two years, increasing our tight winter 2018 generation capacity margin by 10%.

“The AD industry welcomes the statement in the CfD call for evidence that a ‘long term plan for heat will be needed in order to enable us to meet our renewable and carbon emissions reduction targets’. The Committee on Climate Change has said this is urgently needed, and we hope that the government’s forthcoming RHI consultation response will support that objective through clear backing for biomethane.”

The application process for the Contracts for Difference allocation round will open in April 2017.

Related links

Call for evidence – Contracts for Difference 

More information on Contracts for Difference

Low carbon consultation document