Energy from waste (EfW) producers have welcomed ministers’ announcement on renewable energy subsidies but certain key technologies have lost out.
The Department of Energy and Climate Change (DECC) released its hotly awaited response to a review of the Renewables Obligation Certificate (ROC) subsidy banding.
EfW technologies including gasification and pyrolysis, landfill gas and EfW with combined heating and power (CHP) will attract higher ROC levels than the Government had proposed in its consultation document published October 2011.
But ROCs for anaerobic digestion will be cut, as originally proposed, from the current 2 to 1.9 in 2015/16 and 1.8 in 2016/17. And from April 2013 the band will be closed to new projects at or below 5 MW, subject to further consultation.
Highlights for the sector include:
- EfW with CHP to remain at the current 1 ROC level rather than dropping to 0.5 as proposed
- New bands introduced for landfill gas: for closed sites (0.2 ROCs); and for waste heat to power, open and closed sites (0.1 ROCs). DECC had proposed a cut to all landfill gas operations to 0 ROCs
- One standard and advanced ACT (Advanced Conversion Technologies - gasification and pyrolysis) band will attract: 2 ROCs in 2013/14 and 14/15, 1.9 ROCs in 15/16 & 1.8 ROCs in 16/17. Currently standard ACT recieves 1 ROC, advanced 2 ROCs.
The Environmental Services Association said the announcement contained good news for the EfW sector, especially for EfW with CHP and advanced conversion technologies but raised concerns around landfill gas.
ESA director of policy, Matthew Farrow, said: ““We are pleased that our views have been listened to and that rather than all landfill gas support as planned, the Government will make ROC support available for landfill gas projects at closed landfill sites.
“However it remains to be seen whether the rate chosen - 0.2 ROCs will be sufficient to enable significant numbers of projects to come forward.
“Meanwhile the ending of RO support for most open landfills projects risks undermining efforts to capture the maximum amount of landfill gas.”
Chris Williams, managing director of EfW developer Green Energy Parks told MRW the outcome was good for the industry.
He said: “Within our sector – advanced conversion – we’re pleased to see the simplified banding with two ROCs, sliding to 1.8.”
“That should have a positive effect in the market giving some of the smaller projects that were on hold or were going to close the opportunity to continue. In general, the result is good for our sector.”
The EfW UK lobby group welcomed the announcement which it called a “clear signal from Government that it supports the waste technologies that are helping to deliver its renewable energy targets”.
It added: “In particular, we welcome DECC’s decision not to reduce the current level of RO support for Energy from Waste projects with CHP, as was previously suggested in its initial consultation document in October of last year.
But the Anaerobic Digestion and Biogas Association (ADBA) accused ministers of undermining investor confidence and prospects by preventing AD projects under 5MW from claiming ROCs.
ADBA chief executive, Charlotte Morton, said: “Degression was to be expected but the new proposal to prevent the vast majority of new plants from claiming ROCs from April 2013 will cause a shock in the AD and investment communities.
“Making such a change with little more than six months’ notice will hit projects already in development, as well as the business plans of companies looking to develop AD plants in the next few years.”
“A sudden announcement of a policy which was not part of the original consultation is completely contrary to providing certainty and clarity to businesses, which DECC has said that they want their policies to achieve.
“ROCs are a valuable option for AD developers, given the uncertainty created by the capacity-based degression in FIT which is coming in from 2014, and especially for operators who want to develop a wide range of AD capacity.”
The Renewable Energy Association also said it would “strongly oppose the proposal to consult on removing FIT-eligible technologies from the RO under 5 MW”.
The REA said: “Firstly only one AD plant in the UK is over 5MW (out of the 22 currently supported by the RO). Removing sub 5MW AD from the RO would therefore slash the budget. The ambitions for AD under FIT are already very low.”
REA’s head of biogas David Collins said AD had been “squeezed from both sides” by the ROC review and the announcement Friday that an annual capacity threshold for AD projects qualifying for full Feed In Tariff (FIT) support would be set at 500kW.
Last week DECC said its response to the consultation on reducing subsidies had been delayed until autumn, prompting fears that some EfW projects could be put at risk. The response had originally been due in spring
The delay is reported to have been caused by a high-profile row over wind farm subsidies within in the Coalition Government.