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EfW subsidy row intensifies

Ministers’ decision to postpone an announcement on key subsidies which could boost the energy from waste sector has come under a fresh attack from a senior Conservative MP.

Tim Yeo, chair of the Commons energy select committee, told the Guardian chancellor George Osborne was sacrificing low-carbon energy policies and “wrecking” the Government’s green credentials in a bid to placate Conservative wind farms opponents.

Yeo’s committee, in a report published today, said the energy bill - the Government’s proposed radical shakeup of UK energy markets - had become “unworkable”.

MPs criticised the bill’s complexity and warned it would reinforce the power of the ‘Big Six’ energy firms.

Intervention by the Treasury had created an “unacceptable” level of risk for companies looking to invest in renewable energy, they added.

Yeo claimed that Osborne’s “interference” on Renewable Obligation Certificates (ROC) – energy subsidies which benefit some EfW technologies – show the Treasury is “not supportive of progress on the low-carbon energy sector”.

MRW reported last week that the Government’s response to the ROC banding review had been delayed until Autumn, prompting fears that some EfW projects could be put at risk.

Charlotte Morton, chief executive of the Anaerobic Digestion and Biogas Association (ADBA) said the MPs’ committee was right and the Treasury had “never appreciated or backed the potential that green growth offers the UK’s economy”.

She said: “For a relatively small up-front investment we could create jobs, infrastructure and export markets, as well as tackling climate change and securing the future of energy supplies.

“The Energy Bill needs to properly recognise and drive low-carbon energy such as biogas as part of this green economic revolution: with the right support, anaerobic digestion alone could employ 35,000 in the UK.”

Gaynor Hartnell, chief executive of the Renewable Energy Association (REA), which represents AD, biomass and other EfW sectors, said the committee “rightly concludes there are very serious problems with the current proposals”.

She added: “The renewables industry, which should be a powerful engine for economic growth, wants to work with Government, but there is real uncertainty in the sector now, which is hugely damaging to the sector’s future prospects.”

The REA said it backed the select committee’s recommendation that small and medium-sized power generation has been left behind and that the existing Feed-in Tariff (FIT) subsidies should be extended from 5MW to at least 10MW.

The Government last week published its response to a consultation on its FITs review.

Matt Hindle, ADBA’s head of policy told MRW there were concerns with the Government’s approach to FITs around the degression triggers – the generation capacity at which FIT subsidies can be reduced – for small scale AD plants.

He said ADBA hoped to be able to work with DECC and Ofgem on developing a preliminary accreditation scheme to make sure it is a workable system that helps “secure investment in new projects”.

FIT tariffs for AD:

Band (kW)Current generation tariffs (p/kWh)tariffs from 1 Dec 2012 (p/kWh, 2012 prices)
=25014.714.7
>250-=50013.613.6
>500-=5000<>9.98.96

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