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Government proposes increasing FITs tariffs for farm-scale AD 

The Government has proposed new tariffs for farm-based anaerobic digestion (AD) plants in its fast-track consultation on the Feed In Tariff (FITs) scheme.

Published by DECC, the consultation document proposes to increase the tariff for energy generated under the FITs scheme by farm scale AD plants to:

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

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 DECC, and 9p/kWh for installations between 500kW and 5MW.

The decision to increase incentives to take up AD FITs schemes follows findings that only two farm scale AD plants had been accredited under FITs, one of which was under 500kW. Under DECC projections, it was anticipated that with the arrival of FITs in addition to the Renewables Obligation, there would be as many as 10 farm-scale AD facilities by 2011.

The announcement comes days after a House of Commons debate, which heavily criticised the Government for “distorting the market” for wood panels through the Renewable Heat Incentive.

The consultation document explained: “We note concerns that an increase in FIT tariffs for farm-scale AD would lead to wholesale expansion of the diversion of land and food to energy crops. This is not the intention of the proposed tariff changes and the Government will ensure that any necessary controls are put in place to ensure that this does not happen. We are talking to Defra and others about the best way to implement these controls and these will be elaborated in the comprehensive FITs review. “

Renewable Energy Association (REA) chief executive Gaynor Hartnell said: ““We don’t anticipate much increase in uptake of small scale AD, with these meagre tariff increases.  That’s a missed opportunity, as methane emissions from agriculture can be reduced by on-farm biogas plants.  Government’s concern over energy crops is totally misplaced.”

The consultation closes on 6 May 2011, and the changes would come into effect from 1 August.

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