UK government proposes cuts to feed-in-tariffs for AD

By U.K. Renewable Energy Association | June 06, 2016

The U.K. Department for Energy and Climate Change recently proposed completely cutting the feed-in tariff for larger 500 kWe anaerobic digestion (AD) sites, and severely removing the tariffs for small and medium plants.

The tariffs proposed for small and medium scale AD are 46 percent and 35 percent respectively lower than the minimum viable levels the REA recommended to government in its response to the 2015 review of feed-In tariffs.

Such significant reductions in the tariffs are a great concern for the U.K. Renewable Energy Association. It is likely that these tariffs are not sufficient to support new projects, which will directly impact the government’s capacity to deliver its 2020 renewable heat and transport targets and carbon budget. Specifically, the government is proposing from January 2017:

- 27 percent cuts compared to current tariff levels for small scale AD (less than 250 kWe) and medium scale AD (250 to 500 kWe),

- 100 percent cut on the tariff for large scale AD (greater than 500 kWe),

Cuts will be compounded by the introduction of a default degression to the tariffs which will be applied each quarter in line with the other technologies eligible under FiTs. This is in addition to the 10 percent degression that would occur each time a cap is hit.

Anaerobic digestion is the process of converting food and other biowastes (including sewage sludge and farm slurries) into green gas and digestate, which can be used as an organic substitute for fossil-fuel based fertilisers. There is great potential for new employment, GHG emissions reduction, and improved energy security in the UK from anaerobic digestion. Green gas can be used to produce electricity and heat, or can be upgraded to biomethane and used for low carbon heating or as a renewable gas in Heavy Goods Vehicles.

James Court, head of policy and external affairs at the REA, said, “This is a huge blow to the rural economy, circular economy, and to the growth of this source of low-carbon energy. We see support being given to new gas power plants, as well as to fracking. Biogas is a domestic source of low-carbon energy, is delivering new electricity and heat capacity now, and has strong public support, yet faces drastic cuts. There’s an opportunity here with AD to significantly reduce GHG emissions, to repurpose unavoidable food wastes, and to provide dispatchable low-carbon heat and power. Despite this, our ambitions to grow the sector remain frustrated.”

Kiara Zennaro, Head of Biogas at the REA, said, “It is disappointing that the government is taking little notice of the concerns raised by industry in the FiT consultation last year. In all likelihood, if these proposals are adopted we will see the end for many of the new AD projects planned in the U.K. Correspondingly, we will miss a significant opportunity to decarbonize the agricultural and waste sectors whilst supporting the rural and circular economies.”