9 September 2016 by Will Date

Energy Committee calls for protection of AD heat incentive

Subsidy for the production of heat through biomethane sources – such as anaerobic digestion – must remain a funding priority for government if renewable heat targets are to be met, a Parliamentary Committee has argued.

The Energy and Climate Change Committee today (9 September) published its report into the government’s 2020 renewable heat and transport targets.

Generation of biomethane from sources such as anaerobic digestion is 'crucial' to meeting renewables targets, a Parliamentary Committee has said

Generation of biomethane from sources such as anaerobic digestion is ‘crucial’ to meeting renewables targets, a Parliamentary Committee has said

Overall, the report suggests that the UK will fail to meet its 2020 target to provide 15% of its energy from renewable energy sources.

And, the Committee has also claimed that the government is ‘underperforming’ in its obligation to generate 12% of its heat through renewable sources by 2020. According to the Committee, the UK is “not yet halfway towards the 12% target”.

Biomethane is produced by extracting CO2 from biogas – a mixture of CO2 and methane, chemically similar to natural gas – which is generated by the AD process. This can then be exported to the national gas grid, without the need to modify existing pipelines.

Production of biomethane has been eligible for funding through the government’s Renewable Heat Incentive (RHI) – a fixed 20-year income for renewable heat generation, set up by the Department of Energy and Climate Change (DECC) in 2010.

In March, DECC announced plans to reset the RHI’s biomethane tariff – which the Committee’s report claims has suffered from successive reductions – to its January 2016 level. DECC claimed that it needed to consider changes to the RHI in order to meet the government’s short and medium term objectives “in the most cost effective way”.


Giving evidence to the Energy and Climate Change Committee, gas networking firm SGN had claimed that the RHI had enabled the UK to become “the fastest growing and most innovative biomethane market in Europe.” However, the company added that it was “extremely concerned” about proposals to reduce RHI funding levels – claiming that cuts to the biomethane tariff could be so low that biomethane projects could become “uninvestable” in future.

These concerns were echoed by the Renewable Energy Association (REA) which claimed that it is likely that the RHI biomethane tariff will fall below a “commercially viable level” by 2017.

In its report the Committee noted: “The government’s proposed reforms to the Renewable Heat Incentive are not the optimal pathway to the 2020 renewable heat target.”

It added: “Above all biomethane is crucial to meeting the 2020 target and must remain a funding priority. The government should revise its RHI reforms to reflect these priorities, especially in protecting biomethane support.”


Energy and Climate Change Committee chair, the SNP MP Angus MacNeil, said: “The experts we spoke to were clear: the UK will miss its 2020 renewable energy targets without major policy improvements. Failing to meet these would damage the UK’s reputation for climate change leadership. The government must take urgent action on heat and transport to renew its efforts on decarbonisation.”

Frank Aaskov, REA policy analyst, said: “The RHI needs to be reformed to further support the use of biomethane on the gas grid and in transport, and biomass heat at all scales. The renewable heat industry has been vocal in their concern about proposed government reforms, but under the right framework is ready to deliver on the 2020 commitments.”

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