The government department has defended its proposal to reduce its feed-in tariff (FIT) scheme – the primary subsidiary support available to prospective AD operators generating renewable electricity.
It follows criticism from the renewables and organics recycling sectors that the cuts will “kill off” AD projects in the UK.
Following a review of the scheme, DECC has proposed axing the feed-in tariff for larger 500kWe AD sites and restricting tariffs for smaller and medium-sized plants – which could be reset at 46% and 35% respectively.
Cuts
Cuts are also likely to be compounded by the introduction of a default degression to the tariffs which will be applied each quarter in line with the other technologies eligible for subsidy under the scheme.
This is in addition to the 10% degression mechanism that would cause a reduction in the Feed-in Tarriff every time the government’s cap on deployment is hit.
The revised levels are lower than the minimum viable levels the Renewable Energy Association (REA) and Anaerobic Digestion & Bioresources Association (ADBA) recommended in their own responses to the consultation, and both have criticised the government for its decision.
James Court, REA head of Policy and External Affairs, said: “This is a huge blow to the rural economy, circular economy, and to the growth of this source of low-carbon energy.
“We see support being given to new gas power plants, as well as to fracking. Biogas is a domestic source of low-carbon energy, is delivering new electricity and heat capacity now, and has strong public support, yet faces drastic cuts.”
ADBA
Charlotte Morton, ADBA chief executive, argued the consultation did nothing to address DECC’s “fundamental lack of ambition” for AD and community scale renewables.
She added: “Removing support for new plants above 500kW is completely unjustified and will kill off projects which could otherwise have delivered DECC’s objectives while representing good value for money.”
“Removing support for new plants above 500kW is completely unjustified and will kill off projects which could otherwise have delivered DECC’s objectives”
Charlotte Morton, chief executive
ADBA
Defending its decision, DECC argues that despite the cap tariff levels will continue to drive a strong pipeline for new projects, with the queue for applications stretching into the first quarter of 2017.
The department also explained that it is proposing to maintain a current tariff trajectory for 0-250kW and 250-500kW bands, with degression, to 5.98p/kWh and 5.52p/kWh respectively in January next year. Tariffs for plants above 500kW would be reduced to 0p per kWh.
‘Doubled’
A spokesman for DECC, said: “Our support has helped to kick-start the growth of small scale AD, underlined by the fact that the number of installations receiving FITs has more than doubled in the past two years.
“We are dedicated to reducing our emissions and moving to low carbon energy, but this has to be done in the most cost-effective way. The Feed in Tariff for AD has been reassessed to ensure that only the most efficient installations come forward, in order to achieve best value for money for bill payers.”
The government is also consulting on feedstock restrictions to address the risks associated with increasing energy crop use in AD. Its ‘key aim’, it suggests, is to deliver the multiple objectives of waste management and low carbon energy.
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