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REA reveals proposals to be included in DECC consultation on biomass financing

The proposals set to be included in the Department for Energy and Climate Change consultation on the financing of renewables plants have been revealed by the Renewable Energy Association.

The REA has said the proposals will be as follows:

·         Energy from waste and anaerobic digestion will be grandfathered in the pure sense

·         For biomass the capital costs will be grandfathered, but the fuel element can change at future banding reviews

·         They want more evidence on what part of the 1.5ROCs/MWh or the 2/MWh could be accounted for by capital element

·         Bio liquids will not be grandfathered

·         The consultation period will be three months

·         The conclusions should be published before recess

DECC was first alerted to the issues with the financing of renewable plants using biomass and wastes by the REA at the end of last year and since then the two have been working together to try and resolve the issue.

The full consultation document will be issued by DECC this week, following the budget announcement that the Government intends to grandfather a minimum level of Renewables Obligation support for biomass installations at the point of accreditation, subject to consultation.

REA chief executive Gaynor Hartnell said: DECC has done well to turn this round quickly after we raised it as a concern.

We can see DECCs logic.  If you can secure a robust long term contract for fuel, then a fixed number of ROCs/MWh for 20 years is ideal.  Thats all fine and good for Public Finance Initiative projects or plants using their own feedstock, but not so for merchant plants.

This is still a consultation, of course, so nothing is yet set in stone.

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