The Renewable Energy Association (REA) has warned that “sudden and severe” policy interventions could lead to a slowdown in energy-from-waste (EfW) and anaerobic digestion (AD) developments.
The association’s latest review of the renewable energy sector revealed that Government interventions had slowed growth rates to the point where the UK was in danger of missing its 2020 target of generating 20% of its energy from renewable sources.
The REA said deployment of EfW schemes – including landfill and sewage gas, conventional incineration and advanced treatments such as gasification – had been held up by a “lack of clarity” over Contracts for Difference energy price incentives.
It added that exporting waste from the UK had led to concerns about the availability of feedstock and that “planning issues remain a significant barrier”.
But the report said the EU circular economy package should stimulate further growth, and added that there were more than 50 advanced treatment projects awaiting financial closure.
In 2015 the REA estimated that the AD sector could grow by a further £1.9bn to 2020. But it now warns reduction in Feed-in Tariff subsidies will mean this investment is “unlikely to be realised”.
The report said: “Although growth has been good, recent market intelligence suggests that we are now seeing a drop in the number of projects in the pipeline, which reflects the policy situation.”
Under proposals by the Department for Energy and Climate Change, AD plants larger than 500kW will no longer be eligible for support from next year and there will be a 27% cut in support for smaller plants.
The REA estimates the AD sector to be worth £347m in 2014-15, up from £340m in the previous year, with more than 2,800 people employed in 148 companies in the supply chain.
REA chief executive Nina Skorupska said: “The [renewable energy] industry was blindsided this year with more than a dozen sudden and severe policy changes, which we expect will be reflected in next year’s report.
”While many businesses have been left reeling and deployment has begun to slow, as an industry we will persevere, we will innovate, and we will continue to grow.”
UK energy-from-waste sector
2,399GWh generated by EfW in 2015, up from 1,950GWh in 2014
Landfill gas production fell from 5,045GWh to 4,772GWh during the same period
Turnover in the sector grew to £895m in 2014-15 compared with the previous year, according to the REA
The number of people estimated to be employed in the EfW supply chain stood at 7,316 in 2014-15, and the number of companies at 366