Revised EU guidelines on state aid for renewable energy developments could put small-scale AD plants at risk, the Renewable Energy Association (REA) has warned.
The European Commission has adopted new rules on state aid to support a “gradual move” to market-based support for renewable energy rather than straight ahead public subsidy.
The REA said the new guidance could mean the current Feed-In Tariff (FIT) regime would only apply to scheme that produce less than 1MW of electricity, rather than the current 5MW cut-off point.
This would mean funding for a number of AD plants such as those on farms could be subjected to an increasing market influence, such as the new Contracts for Difference (CfD) mechanism that is to replace Renewable Obligation Certificates (ROCs) in 2017.
The REA called on the Government to support biogas by exempting subsidies for the technology from the state aid guidance.
REA chief executive Dr Nina Skorupska said: “Farmers, businesses and community groups have become important participants in the UK electricity supply thanks to the simplicity of the Feed-in Tariff.
“It has also enabled electricity-intensive companies to save money by supplying their own clean power. These new players in the energy mix are unlikely to be able to make new projects work under CfD.
“We hope the Government will be able to support this diversification in the energy mix through the state aid guidelines exemptions, not least so that it can fulfil its exciting new community energy ambitions.”
The new state aid rules will only apply to new schemes that have not yet been approved.
Joaquín Almunia, EC vice president in charge of competition policy, said: “It is time for renewables to join the market. The new guidelines provide a framework for designing more efficient public support measures that reflect market conditions, in a gradual and pragmatic way.
“Europe should meet its ambitious energy and climate targets at the least possible cost for taxpayers and without undue distortions of competition in the Single Market. This will contribute to making energy more affordable for European citizens and companies.”