The Anaerobic Digestion and Biogas Association (ADBA) has welcomed the publication of the Comprehensive Review of the Feed in Tariff, but expressed caution about the proposed tariffs for AD
Under the Government's proposals, plants with installed capacity above 500kW will receive 9.0p/kWh from October 2012, compared to the 9.9p/kWh they would have received without any change. The tariff for plants up to 250kW will be 14.7p/kWh, and for 250-500kW it will be 13.7p/kWh.
The rates will be static until 2014, when they start to degress at set rates each year. The degression process could be brought forward if the industry grows faster than the Government expects.
Through the use of FITs, Department of Energy and Climate Change (DECC) hopes to encourage deployment of additional small-scale (less than 5MW) low-carbon electricity generation, particularly by organisations, businesses, communities and individuals that have not traditionally engaged in the electricity market.
The consultation had been delayed due to legal proceedings over the cuts to the tariff for solar PV, which were announced last year.
Speaking in the House of Lords, ADBA Chairman and Liberal Democrat peer, Lord Redesdale, said: "The same financiers who have had certain problems with solar PV are the ones who are financing AD. It is extremely difficult to get any debt financing or equity financing for AD at the moment. This is of particular concern regarding the statement that if certain trigger points are met, there would be a retroactive reduction in the feed-in tariff for anything coming on-stream at that point. If we were nearing those targets, that would have a major implication for financiers financing schemes because they would not know which band tariff they would be under."
ADBA chief executive, Charlotte Morton, said: "It is a relief that the FiT consultation has finally been published, but the ambition for AD is disappointingly low given the potential of the industry. Assuming all food waste were separated out and prioritised for AD, the industry would deliver over 10 percent of the UK's total gas demand. Achieving that could result in 35,000 jobs.
"ADBA will be consulting with members on the tariff levels which have been proposed, including the suggested reductions.
"The Government needs to ensure that their policies on renewable energy, waste and land use are coherent. These are all valuable resources that we need to make the most of. Our industry needs stability and certainty to realise its full contribution to green growth, energy and climate change targets."
The Feed-in Tariffs (FITs) scheme was introduced on 1 April 2010, under powers in the Energy Act 2008.