Plans to hand councils fresh financial incentives to host renewable energy projects including waste plants have been given a lukewarm reception from industry chiefs.
New guidance was announced last weekelaborating on ministers’ commitment to allow local authorities to keep all business rates income from renewable energy projects as part of a shake-up of local government funding.
Environmental Services Association policy director Matthew Farrow said the proposals “may be beneficial in encouraging some local authorities to consider the merits of energy-from-waste schemes”.
He added: “Given the need for new waste infrastructure across the waste hierarchy, the Government has missed a trick by restricting these incentives to energy-from-waste plants rather than any facility which contributes to landfill diversion and/or higher recycling rates.
“The size of the incentive will of course depend on how the Valuation Office determines the renewable energy portion of a facility and we will be interested to see the detail here.”
The Department for Communities and Local Government said the guidance “sets out the way in which the Government intends to define renewable energy projects in line with the Government’s policy intention that business rates should be kept fully by local authorities within whose areas the projects are situated”.
EfW combustion, anaerobic digestion, and advanced thermal conversion technologies including gasification and pyrolysis have all been included as “qualifying technologies” (see box below for full list).
However, the document stated it was only the “energy-generating component of those projects that constitute the qualifying technology”.
It added: “It will be necessary for the Valuation Office Agency to certify the element of rateable value that is attributable to the renewable energy project.”
The DCLG document, Business rates retention scheme: Renewable Energy Projects, a statement of intent, fleshes out policy which will be enshrined in law through the Local Government Finance Bill, which is currently in front of parliament.
Renewable energy projects: qualifying technologies
- onshore wind power
- offshore wind power
- hydroelectric power
- biomass conversion
- EfW combustion
- anaerobic digestions, landfill and sewage gas
- advanced thermal conversion technologies – gasification and pyrolysis
- geothermal heat and power
Other notable intentions laid out by the Government include:
- The billing authority will be responsible for deciding whether a new or expanded property (or property of another use which has a new renewable energy project added to it) meets the definition of a new renewable energy project.
- The regulations will provide for properties to be treated as a renewable energy project only if they are entered on a local non-domestic rating list with effect from 1 April 2013.
- The regulations will provide that in two-tier areas it is the authority that as local planning authority has given approval for the new or expanded renewable energy project that will gain the benefit from the disregard.
- In London, even where the Mayor of London makes a planning decision on an EfW project, the regulations will provide that the business rates income will be retained in full by the relevant borough in which the project sits.