The tariff for injecting biomethane into the grid is to be reviewed after industry representations showed that large gas-to-grid plants could be overcompensated.
Initial analysis from the Department for Energy and Climate Change (DECC) also concluded that, under the current Renewable Heat Incentive (RHI), there is a risk of overcompensation for large plants or sites with existing assets.
This could pose a risk of not delivering value for taxpayers’ money, noted DECC.
As part of the review, DECC will be updating the cost and performance data underpinning the tariff to determine whether any changes are required.
If it is concluded that changes are needed, DECC plans to consult on these in the summer.
Charlotte Morton, chief executive of the Anaerobic Digestion and Biogas Association, welcomed the review and said the industry needed tariffs that fairly incentivised all scales of biogas-to-grid injection.
She said: “Biomethane support needs to be on a long-term footing to give certainty to developers and investors.
“This early announcement from government should help to provide certainty for the industry, allowing early sight of forthcoming changes. We will continue to work closely with DECC and our members to gather evidence to ensure tariffs are set at an appropriate level.
Members of the Renewable Energy Association (REA), including head of biogas David Collins and Paul Thompson head of policy, have also been in discussions with DECC over the review.
Thompson said: “Overcompensation is not healthy for the long-term health of the renewables industry, so it is encouraging to see DECC learning the lessons from the solar PV Feed-in Tariff and engaging with industry to head off this risk before it becomes a problem.”
Collins said: “In response, we are forming an REA Biogas Sub Group, with immediate effect, to address this issue.”
- This month, energy industry associations warned minsters that energy-from-waste schemes using combined heat and power (CHP) should receive the same Government subsidy as biomass CHP under the RHI. They said this would be in line with the Government’s promotion of district heat networks.