Spending Review must unlock waste-to-energy

Ahead of Chancellor George Osborne's announcement of the government's spending plans for 2011/12 to 2014/15, the Renewable Energy Association (REA) particularly emphasised the need for “early clarity” on the proposed Renewable Heat Incentive (RHI) subsidy.

And, it called for changes to the Feed-in Tariff subsidy for small-scale renewable electricity generation, including the inclusion of biomass and changes to encourage anaerobic digestion using farm-derived wastes, claiming that the current rate of subsidy meant these plants were not “commercially viable”.

The REA said that, in general, it was against a short-term, narrow focus on the “cheapest” technologies, which it claimed had failed when the Renewables Obligation subsidy was originally introduced, emphasising instead the need to promote the developing of “promising” technologies.

It added: “REA is also looking for the principle of longevity and certainty in policy support, to secure industry and investor confidence, which in turn reduces the cost of delivery.”

Investment

In particular, the organisation highlighted concerns over difficulties in securing investment for large-scale biomass and energy from waste plants due to uncertainty over exactly what levels the RO will be set at when its banding is reviewed in 2013.

“Investment in large-scale biomass and energy from waste plants remains blocked, due to there now not being sufficient time to commission projects before the 2013 review,” the REA said. “They will therefore be at risk during the construction phase and cannot obtain finance on that basis.”

Similarly, it called for the Spending Review to make sure the RHI “works” for these large-scale projects, which it said would require avoiding “unnecessary complication” in biomass treatment, and in particular the biomass content of waste.

And, it also called for “prompt” decisions on how the incentive deals with combined heat and power (CHP) and also how it interacts with the RO.

The REA's call to address blockages in developing large-scale plants comes less than two weeks after industry body the Confederation of British Industry claimed that the UK could quadruple the proportion of energy it generates from waste by 2015 if the government provided the right finance, procurement and planning support (see letsrecycle.com story).

RHI

The REA also called on government to ensure the RHI provides “adequate” support for the commercial injection of biomethane – which can be produced from waste – into the grid, claiming that the levels of support proposed in the government's RHI consultation were “too low”.

Its concerns echo those expressed by leading figures in the organics recycling sector over whether the incentive will be attractive enough to encourage investment in technologies such as anaerobic digestion and biomass (see letsrecycle.com story).