The Anaerobic Digestion & Bioresources Association (ADBA) said that Government plans to end feed-in tariff (FiT) renewable energy subsidies will put at risk 300 anaerobic digestion (AD) plants that are currently in the pipeline.
The Government announced its intention to end FiTs in 2015 because of the ongoing costs of subsidies, and has now published a consultation outlining details of the closure.
Under the plans from the Department for Business, Energy and Industrial Strategy (Beis), the FiT scheme will be closed to new applications after 31 March 2019 and there will be no replacement subsidies, which are levied on electricity bills, until 2025.
Beis estimates up to £1.9bn will be saved.
An impact assessment on ending FiTs said the assumed reduction in deployment of renewable energy generators “will likely result in decreased employment in the low-carbon sector”.
Of the 126,000 people currently employed in the renewable energy industry, nearly 3,000 work in the AD sector.
ADBA chief executive Charlotte Morton warned that on-farm AD systems would struggle after being denied subsidies from a number of Government schemes.
“This also puts at severe risk more than 300 AD combined heat and power plants currently in the planning pipeline,” she said.
“It is therefore vital that the Government rethinks its baffling decision to have no new low-carbon electricity levies until 2025, which risks creating a valley of death that small-scale technologies such as AD could easily fall into.
“With the Renewables Obligation closing in 2017, the FiT now confirmed to close imminently, small-scale AD excluded from Contracts for Difference and still no decision on long-term support for generation of renewable heat, we implore the Government to engage with the AD industry in developing a guaranteed route to market and a robust glidepath to reduced costs.”
The FiT export tariff – which guarantees a fixed price for energy sold to the grid through renewable generation – will also come to an end. Beis said this was due to a “continued drive to minimise support costs on consumers”.
James Court, head of policy and external affairs at the Renewable Energy Association, said: “While nobody in the industry was expecting an 11th hour reprieve for the FiT, the removal of the ‘export tariff’ for new projects will lead to the truly bizarre situation where consumers who own technologies such as solar will give electricity they do not consume to the grid for free.
“Post-subsidy could be a reality, but in an energy market where nothing, not even gas power stations, can be built without Government support, it is unrealistic to expect consumers, businesses or developers to continue installing small-scale generation.
“This could be achieved by tax incentives, market enablers and planning or building regulations, but we are currently left in an unnecessary policy vacuum without any firm proposals put forward by the Government.
“This is all having an effect in the real world, with jobs, deployment and investment in solar energy now down to below 2012 levels.”