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New £10m loan fund announced to stimulate further UK AD investment

WRAP will set up a new £10m loan fund to help stimulate investment in additional anaerobic digestion (AD) infrastructure in the UK, the AD Strategy and Action Plan has revealed.

Published today (14 June), the report states it has forecast potential AD deployment for electricity could reach 3-5TWh, although it emphasises “it is not possible at this stage to give a definitive growth potential for AD”. There is currently 1.08TWh of installed AD capacity in the UK.

In order to help create this infrastructure, the Government has agreed that WRAP will set up the new loan fund. A total of £10m will, over four years, be made available to provide debt finance and stimulate investment in additional AD capacity. More details are to be published in the near future after the focus and criteria of the fund are developed.

In a joint ministerial foreword, recycling minister Lord Henley and energy minister Greg Barker said: “Changes cannot be delivered overnight and the Action Plan may well need to be modified by experience, but this Plan is the first and key step to enabling a thriving AD industry to grow in England over the next few years, delivering new green jobs as well as new green energy.

“In addition to the actions identified in this document DECC and Defra are working to ensure that the financial incentives available for AD provide the revenue support needed for investment to pull through the AD potential.”

Anaerobic Digestion and Biogas Association chief executive Charlotte Morton said publication of the AD Strategy and Action plan and Waste review were “important staging posts in the development of anaerobic digestion in the UK”.

She added: “The AD Strategy and Action Plan has been the product of a vast amount of work between Government and industry. While we would have liked to see a clearer strategy to prioritise source-segregated food waste for AD, the actions which have been identified – many of which ADBA will be leading on – should help make it easier to grow the industry. Developments such as a best practice scheme for AD will ultimately help break down barriers to plant development, reduce the risk of investing in AD and deliver the industry’s potential to UK plc.”

The report is the result of six months of consultation with industry to identify and overcome key barriers.

Main actions to be implemented include:

·         Develop a thorough and shared understanding of the potential for AD to fully develop into a significant contributor to the UK’s renewable energy, agriculture and waste treatment industries. This includes a clear understanding of the existing markets for digestate;

·         Identify regulatory issues that could pose obstacles to the establishment and operation of AD facilities;

·         Simplify protocols governing injection into the gas grid and connection to the electricity grid  for small capacity plants;

·         Build investor confidence by reducing risks and costs associated with providing finance;

·         Increase the awareness of the role that can be played by AD, in terms of benefits at a local level;

·         Develop and publish a set of steps to gather evidence on the barriers to and opportunities for biomethane as a transport fuel in the road haulage sector;

·         Provide greater levels of information and guidance about AD for planners, financiers and project developers.

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