DECC elects not to review FIT for AD this year

By Erin Voegele | February 25, 2014

Trade organizations serving the U.K. biogas industry have announced the U.K. Department of Energy and Climate Change has confirmed it will not review the feed-in tariff (FIT) for anaerobic digestion (AD) this year. The move comes despite Energy Minister Greg Barker’s November 2013 announcement that the DECC would launch a review of the FIT for small-scale AD in January.

According to information released by the U.K.-based Renewable Energy Association, the AD industry has been calling for a review because the policy as currently designed will trigger a tariff reduction for small AD in April. The reduction will happen even though few plants have been built at this scale. If allowed to go forward, the reduction is expected to make small-scale and mid-scale AD, including on-farm projects, economically unviable.

“This is a bitter disappointment. We have worked hard with industry colleagues and DECC officials on proposals to fix the FIT for small and mid-scale AD, so it is extremely frustrating that this has not been done. The Government has kicked this issue into the long grass, leaving several projects and companies in the sector at extreme risk,” said Paul Thompson, head of policy at the REA.

“Small scale AD will be hit the hardest. Much of this takes place on farms, turning farm wastes and residues into self-supplied green energy and fertilizer, strengthening rural businesses, creating jobs and reducing emissions. We will continue to state the case to Government for AD at all scales and work to secure a viable solution as soon as possible,” Thompson continued.

Chorlotte Morton, chief executive of the U.K. Anaerobic Digestion & Biogas Association called the DECC’s decision deeply disappointing, noting the move appears contrary to the government’s stated support for small-scale AD projects.

“Smaller scale AD has a range of environmental benefits on top of generating electricity, including encouraging better manure management on farms and reducing the use of artificial fertilizers. A range of U.K. businesses are also in the process of developing technology and expertise which will be lost without the early-stage support which the current FIT level provides,” Morton said. “The highest tariff digressions were designed to deal with ‘runaway’ deployment, but are hitting smaller scale AD despite just five sub 250kW plants coming online in 2013. This clearly goes against the spirit and intention of the policy, which will be hard to swallow for farmers, developers and their employees.” 

“The window to save small AD is getting smaller but is not yet closed, as there are a number of plants already in construction. We welcome DECC’s commitment to continue to work to support the sector. If ministers are serious about keeping small scale AD alive, realizing sustainable rural growth and delivering the recommendations of the Ecosystem Markets Task Force and the Agri-Tech Strategy, they will recognize that a stable FIT regime is central to the industry’s growth,” Morton continued.