Chancellor George Osborne’s reforms of the Renewable Heat Incentive (RHI) could lead to an additional 140 biomethane plants being built, a fourfold increase, according to research by the Anaerobic Digestion & Bioresources Association (ADBA).
Osborne announced on 25 November in his comprehensive spending review an increase to £1.15bn RHI funding by 2021, up from £430m for 2015-16.
ADBA chief executive Charlotte Morton initially warned of uncertainty around the level of funding available for new projects in 2016 because Osborne had restricted initial growth of the fund.
But now the trade body’s market report says there could be 180 green gas plants in operation by 2021 if a reasonable proportion of the RHI budget is allocated to anaerobic digestion (AD) and the scheme’s structure is workable.
It predicts that biomethane deployment will build on plant numbers growing from 10 to 40 since last December.
Speaking at ADBA’s national conference, Morton (pictured) said: “Nothing’s set in stone yet – ultimately the devil’s in the detail and so we are seeking clarification from DECC on how available funding will break down on a technology-by-technology basis.
“The growth under the new RHI settlement should only be the start. Indigenous gas from AD has the potential to meet as much as 30% of the UK’s domestic gas or electricity demand – or for that matter to fuel 80% of heavy goods vehicles.
“While the Government’s commitment to RHI is welcome, delivering AD’s overall potential also needs a viable Feed-in Tariff (FiT), which means increasing ambition for the scheme and restoring crucial investor confidence by allowing pre-accreditation to recognise AD’s lengthy deployment periods.”
The Department of Energy & Climate Change (DECC) removed preliminary accreditation from the FiT scheme on 1 October but said it would consider reintroducing it in 2016.