The UK Department of Energy and Climate Change (DECC) on Thursday proposed to cut the feed-in tariffs (FiTs) for anaerobic digestion (AD) installations from January 1, 2017, including the elimination of tariffs for plants above 500 kW.
The UK Renewable Energy Association (REA) warned that the proposed changes could end many AD projects planned in the UK. "This is a huge blow to the rural economy, circular economy, and to the growth of this source of low-carbon energy," said James Court, REA head of policy and external affairs.
DECC proposed the following AD FiTs in GBP:
||Proposed Tariffs for 1 Jan 2017
||Ofgem tariffs for systems with eligibility date Apr-Jun 2016
|0 – 250 kW
|250 – 500 kW
|500 - 5,000 kW
"The analysis showed that AD generators larger than 500 kW, receiving RHI payments, relying on 100% food waste as their feedstock and receiving a gate fee of GBP 20 per tonne are able to make sufficient revenues to make the deployment of the plant viable and achieve a 9.1% rate of return without support from the generation tariff," DECC says in its impact assessment.
For systems of below 250 kW and in the 250 kW-500 kW range, the department said it proposed to maintain the current tariff trajectory, which will bring tariffs down to GBP 0.0598 (USD 0.088/EUR 0.078) per kWh and GBP 0.0552 per kWh, respectively in January 2017.
Following its core FiT review last year, DECC introduced a quarterly cap for AD of 5 MW, which will not be changed. It also introduced contingent digression of 10% each time a cap is hit. In addition to that 10% digression, the department proposes a default degression for AD in line with the approach for other technologies under the FiT scheme.
The consultation, which closes on July 7, also proposes the introduction of sustainability criteria and feedstock restrictions for new AD plants.
The Anaerobic Digestion and Bioresources Association (ADBA) slammed the proposals and said it would work with members to put together a strong response to the consultation.
"Removing support for new plants above 500kW is completely unjustified and will kill off projects which could otherwise have delivered DECC's objectives while representing good value for money," its chief executive Charlotte Morton said.
The government is reviewing FiT support for AD after already reducing FiTs for solar, wind and hydro as part of wider renewables subsidy cuts as it wants to rein in spending.
DECC said that AD deployment under the FiT scheme had exceeded initial expectations and that by the end of March 2016, the number of installations accredited under the scheme was 250, with an installed capacity of 177 MW. When the scheme was launched in 2010, the government projected 160 MW of installed capacity by 2020/21.
(GBP 1.0 = USD 1.468/EUR 1.311)
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