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EfW is winner over ROC subsidies

Energy-from-waste (EfW) producers have welcomed the Government’s delayed announcement on renewable energy subsidies - but some key technologies have lost out.

On 25 July, the Department of Energy and Climate Change (DECC) released its response to consultation on the Renew-ables Obligation Certificate (ROC) subsidy banding. The delay is reported to have been caused by a high-profile row within the Government about wind farm subsidies.

EfW technologies including gasification and pyrolysis, landfill gas and EfW with combined heating and power (CHP) will attract higher ROC levels than the Government had proposed in its consultation document published in October 2011.

But ROCs for anaerobic digestion (AD) will be cut, as originally proposed, from the current 2 to 1.9 in 2015/16 and to 1.8 in 2016/17. From April 2013, the band will be closed to new projects at or below 5MW, subject to further consultation. The AD industry has warned that the proposal would hit the “overwhelming majority” of AD projects.

Highlights for the sector include:

  • EfW with CHP to remain at the current 1 ROC level rather than dropping to 0.5 as proposed
  • New bands introduced for landfill gas: for closed sites (0.2 ROCs); and for waste heat to power, open and closed sites (0.1 ROCs). DECC had proposed a cut to all landfill gas operations to 0 ROCs from the current 0.25.
  • One standard and advanced ACT (Advanced Conversion Technologies - gasification and pyrolysis) band will attract: 2 ROCs in 2013/14 and 14/15, 1.9 ROCs in 15/16 & 1.8 ROCs in 16/17. Currently standard ACT recieves 1 ROC, advanced 2 ROCs

The Environmental Services Association said the announcement contained good news for the EfW sector, especially for EfW with CHP and gasification and pyrolysis technologies, but it raised concerns around landfill gas.

Director of policy Matthew Farrow said: “We are pleased that the Government will make ROC support available for landfill gas projects at closed landfill sites.

“However, it remains to be seen whether the rate chosen at 0.2 ROCs will be sufficient to enable significant numbers of projects to come forward. The ending of RO support for most open landfill projects risks undermining efforts to capture the maximum amount of landfill gas.”

Chris Williams, managing director of advanced conversion technologies EfW developer Green Energy Parks, told MRW he was pleased to see simplified banding with two ROCs, sliding to 1.8.

He said: “That should have a positive effect on the market, giving some of the smaller projects that were on hold or were going to close the opportunity to continue. In general, the result is good for our sector.”  

But the Anaerobic Digestion and Biogas Association (ADBA) accused ministers of undermining investor confidence and prospects by preventing AD projects under 5MW from qualifying for ROCs.

ADBA chief executive Charlotte Morton said: “The new proposal to prevent most 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 develop-ment, as well as the business plans of companies looking to develop AD plants in the next few years.”

ROCs explained

The Renewables Obligation (RO) is the subsidy mechanism for large-scale renewable energy, to help meet the UK’s carbon reduction objectives.

The UK is obligated to generate 15% of its energy from renewable sources by 2020 and suppliers are obliged to source increasing proportions of electricity from them.

Renewables Obligation Certificates (ROCs), per megawatt hour (MWh), are issued by Ofgem to renewables generators.

Energy-from-waste (EfW) technologies including Combined Heat and Power, Advanced Conversion Technologies (gasification and pyrolysis), landfill gas, and biomass are eligible for ROCs.

The various renewable technologies are banded and attract different levels of ROCs/MWh.

Operators can trade ROCs and are eventually used by suppliers to demonstrate they have met their obligations.

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