Ofgem publishes guidance to energy-from-waste subsidies

The authority, which is responsible for administering the Renewables Obligation Certificates (ROCs) system of subsidies, issued five guidance documents on Friday (March 27) explaining the impact that the Renewables Obligation Order 2009 will have on the UK's renewable energy system.

In particular, the guidance explains what renewable electricity generators need to do to receive accreditation under the ROCs system, and there is also specific guidance detailing what fuel measurement and sampling must be completed by generators who use waste and biomass as a fuel.

Obligation

The original Renewables Obligation Order 2002 placed an obligation on all electricity suppliers to source an ever-increasing amount of their sales from ROCs accredited renewable energy generators.

Under that system, the main means for suppliers to meet that obligation is to purchase ROCs from generators, with each one equivalent to a single megawatt hour (MWh) of electricity.

However, under the changes that are set to take effect on Wednesday April 1, the number of ROCs that can be sold per MWH of electricity will be varied according to technology, in a bid to support less-developed and more high-risk technologies and allow them to secure investment.

The system of 'banding', which was originally laid before Parliament in February 2009, means that the likes of advanced gasification, advanced pyrolysis and anaerobic digestion will receive two ROCs per MWh, energy-from-waste and standard gasification and pyrolysis all remaining on one ROC and landfill gas downgraded to just 0.25 ROCs per MWh.

Guidance

Within the guidance document 'Renewables Obligation: guidance for generators over 50kW', Ofgem outlines just how renewable electricity generators can apply for accreditation under the ROCs system, which means the authority will issue ROCs for the electricity they generate which can then be sold.

It details the checks that applicants must undergo, how they can use an agent to seek accreditation on their behalf and that data they need to submit to Ofgem for it to issue ROCs on their behalf as and when they become accredited.

Grandfathering

It also explains the impact of the system of 'grandfathering' – the arrangements for facilities that have already received ROCs accreditation under the old system and as such are exempt from the new banding system.

With regards landfill gas, it explains that: “Stations generating electricity from Landfill Gas and Sewage Gas which are granted full accreditation after 11th July 2006 on or before 31st March 2009, and which after the introduction of banding would otherwise be banded down, will be grandfathered at 1 ROC/MWh.”

“Stations generating electricity from Landfill Gas and Sewage Gas which are granted preliminary accreditation on or before 1 April 2009 and which commission before 1 April 2011, which after the introduction of banding would otherwise be banded down, will be grandfathered at 1 ROC/MWh”, it added.

Fuel measurement

The guidance for fuel measurement and sampling (FMS) deals with the procedures that generators using waste or biomass as a fuel are expected use to determine how much of their electricity was generated from these sources, and can therefore have ROCs issued against it, and the amount that comes from fossil fuels.

It explains that: “The amount of electricity is determined according to the energy content attributable to the fossil and non-fossil derived fraction of each of the fuels used in a particular month.

“It is due to this calculation that generators of fuelled stations need to propose and agree an FMS plan with us, describing how they will obtain the values required for the ROC calculations,” it adds.

Waste

Dealing with waste being used as a fuel, the guidance confirms that once Ofgem has received “satisfactory information”, it will assume that the fossil fuel portion of a municipal waste stream is 50% – meaning that ROCs can be claimed against 50% of the electricity produced from a waste stream, and not the full amount.

This change, which is sometimes known as 'deeming', means that generators may now only need to submit “published data” rather than undertake the full fuel measurement and sampling process for individual fuels that has previously been required.

However, the guidance also explains that, if the municipal waste undergoes a process, such as the removal of materials with high biomass content for recycling, “where such a process has taken place, we would look firstly for a generator to provide an explanation of the process. We would then look to the generator to demonstrate that, in spite of the process taking place, the fossil fuel proportion of the waste is still unlikely to exceed 50 per cent.”

Investment

The potential impact of the changes set to come into force on Wednesday was commented on today by energy and climate change minister Mike O'Brien, who said: “This week's ramping up of financial backing in favour of technologies such as offshore wind is evidence of our determination to create the right investment environment for renewables.

“And the funding being made available in the next few months will put the UK ahead of the game for the next generation of offshore technologies,” he added.