Subsidies for new anaerobic digestion (AD) plants via Feed-in Tariffs (FiTs) could be more restrictive than first thought, the industry has said.
The FiTs scheme has quarterly ‘caps’ on maximum deployment for each technology, which were lowered to 5MW per quarter for the entire AD sector from 1 April.
An application for a plant which breaches the cap is counted towards the next quarter – but any unused capacity is lost.
So, as an example, if existing capacity was 4.2MW, an application for a further 1MW plant would push the total national capacity to 5.2MW so it could not be considered. Support would be forthcoming in the next quarter but the 800kW gap would be lost forever.
Capacity could also be lost if proposed plants were cancelled after a cap had been reached or if there were insufficient applications.
Ofgem has released data showing the capacity likely to be unclaimed in the second, third and fourth quarters of 2016 and, at present, that total stands at more than 2.38MW, equating to over 10% of the year’s allocation for AD.
Quarter two has 1.02MW wasted capacity, quarter three 424kW, and quarter four 487kW.
ADBA chief executive Charlotte Morton said: “The FiT deployment cap of 20MW per year for AD is already constraining much needed baseload capacity, failing to recognise our industry’s ambition.
“Not rolling over unused capacity from one tariff period to the next is salt in the wound and a shocking waste of MWs worth of renewable electricity which the department for energy and climate change (Decc) has already accounted for.
“The figures released by Ofgem show the scale of wasted capacity but future quarters could see far more MW of wasted potential. We are calling for Decc to urgently review this situation.
“ADBA has written to Decc to raise the impact this interpretation of the FiT regulations, and seek a resolution which will allow the industry to continue to develop at least at up to the 20MW cap.”