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Feed-in tariffs increase for "farm-scale" AD plants, disappointing for some

The Government has today announced a rise in feed-in tariffs (FITs) for anaerobic digestion (AD) facilities up to 500KW or of “farm-scale”, but some have expressed disappointment that levels are not high enough.

The decision to raise FITs comes following a fast-track consultation on the FIT scheme that started in March. This was launched after data revealed that just two AD projects had been accredited under the system earlier this year.

The new tariffs for AD are:

  • 13p/kWh for >250–≤500kW
  • 14p/kWh for ≤250kW

The Government plans for the changes to come into effect from 1 August for new installations. But the European Commission must first check them under State Aid Regulations, which could lead to a delay.  

Under current tariffs, FIT-accredited AD facilities receive 11.5p/kWh if they have an installed capacity of up to 500kW, which is considered farm-scale by the Department of Energy and Climate Change (DECC), and 9p/kWh for installations between 500kW and 5MW.

According to the consultation document, most responses were positive about the now agreed tariffs. But a number of people felt they should be much higher.

DECC stated: “We have considered the alternative tariffs suggested, but are concerned they may lead to returns higher than those that FITs are designed to deliver (and which are the basis for the scheme’s state aid approval). Similarly, we feel that the issues surrounding uptake of AD go beyond FITs. These will be considered in the coalition’s forthcoming AD strategy.”

But, the Anaerobic Digestion and Biogas Association believes the new levels are too low. Chairman Lord Redesdale said: “The AD industry will be disappointed with the new levels announced: FITs have so far failed to help more than a couple of projects, and this increase is too small to make any significant change to that.

“The Government does not appear to have taken a strategic view of the role that they want AD to play. These levels are insufficient to encourage AD plants at any scale.

“Today’s announcement will fail to move us closer to the “huge increase” in energy from waste through anaerobic digestion which the Coalition promised.”

Renewable Energy Association chief executive Gaynor Hartnell welcomed the “modest increases”.

A reduction in FITs for large-scale solar projects has also been announced. According to DECC, this has been done to protect money available for small-scale projects and the range of technologies, such as AD, supported under this scheme.

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