The anaerobic digestion (AD) industry faces “disaster” after being “squeezed from both sides” by two Government announcements on renewable energy subsidies, the Renewable Energy Association (REA) has warned.
REA head of biogas David Collins said that DECC’s announcement that new AD projects under 5MW could no longer qualify for Renewable Obligations Certificates (ROCs) “would be a disaster for the AD industry”.
He said the Government’s announcement last week on Feed In Tariffs (FITs) “revealed that the annual capacity threshold for AD up to 500kW is to be 4.5MW, which if breached will trigger a tariff reduction of 10%.”
He said this could mean only 9-15 typical plants a year come through before the tariff is cut.
Collins added: “we have learned that Government will consult on proposals to remove support for AD under the RO for projects under 5MW.
“It is rarely practical to build AD above 5MW – only one of the 33 plants supported under the RO today is over 5MW – so this would effectively represent a total withdrawal of support for AD under the RO”.
The REA has said it will “fight hard” for the AD industry in the forthcoming Government consultation.
The Anaerobic Digestion and Biogas Association’s chief executive Charlotte Morton said the ROC announcement which was not part of the original consultation was “completely contrary to providing certainty and clarity to businesses”.
She said: “Degression was to be expected [in the FITs announcement] but the new proposal to prevent the vast majority of new plants from claiming ROCs from April 2013 will cause a shock in the AD and investment communities.”
“Making such a change with little more than six months’ notice will hit projects already in development, as well as the business plans of companies looking to develop AD plants in the next few years.”