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Subsidy cuts proposed for biogas

The government has proposed to remove the Feed-in Tariff subsidy for large anaerobic digestion plants, cut levels for smaller plants and maintain support for micro combined heat and power.

The government has proposed to remove the Feed-in Tariff (FIT) subsidy for large anaerobic digestion (AD) plants, cut levels for smaller plants and maintain support for micro combined heat and power (mCHP). 

The consultation, launched by the Department of Energy and Climate Change (DECC) on 26 May, concerns subsidies for generating energy from AD and mCHP, which were largely left out of a significant shakeup to government support for renewable technologies at the start of 2016. 

Anaerobic digestion breaks down organic material, such as food or agricultural waste, to produce biogas. A first-of-its-kind plant was recently completed at a cheese factory in Cumbria.  

CHP technology generates both heat and power for use on-site. While it usually applies to large-scale industrial and commercial sites, micro CHP can provide small-scale production of heat and power for individual commercial buildings and is particularly effective when demand for heat is high and consistent. 

Proposals

The new proposals aim to align government support for AD and mCHP with the changes made to other renewable technologies earlier in the year.

The government proposes to reduce the generation tariff paid to AD installations of up to 500kW in capacity by 27 per cent from January 2017, while scrapping it altogether for installations over 500kW. 

250 AD installations are currently accredited under the FIT scheme, with a collective capacity of 177MW. 

Caps have already been put in place to limit support for new AD capacity to 20MW a year over 2017 and 2018. 

James Court, head of policy and external affairs at the Renewable Energy Association (REA), called the move “a huge blow” to the rural economy and circular economy. 

“There’s [a missed] opportunity here with AD to significantly reduce greenhouse gas emissions, to repurpose unavoidable food wastes, and to provide dispatchable low carbon heat and power.”

Heat and power

Meanwhile, tariff levels for mCHP units will remain the same. Only installations with a capacity of less than 2kW are eligible and a total limit of 30,000 accredited installations will be maintained. There are currently 501 accredited installations in place across the country. 

According to the government, AD installations are increasingly being set up in the form of CHP and therefore are also eligible for government support under the Renewable Heat Incentive (RHI) subsidy scheme.

The consultation closes on 7 July 2016. For more information, click here