ADBA PRESS RELEASE
The Anaerobic Digestion and Biogas Association has welcomed the publication yesterday [10 February] of the Comprehensive Review of the Feed in Tariff, but expressed caution about the proposed tariffs for AD.
Under the government’s proposals, plants with installed capacity above 500kW will receive 9.0p/kWh from October 2012, compared to the 9.9p/kWh they would have received without any change. At that point the tariff for plants up to 250kW will be 14.7p/kWh, and for 250-500kW it will be 13.7p/kWh.
These rates will then be static until 2014, when they start to degress at set rates each year. The degression process could be brought forward if the industry grows faster than the government expects.
The consultation had been delayed due to legal proceedings over the cuts to the tariff for solar PV, which were announced last year.
Speaking in the House of Lords yesterday [10 February], ADBA Chairman and Liberal Democrat peer Lord Redesdale said:
With regard to the digressions that have been talked about on small-scale FIT, after you go over the 500 kilowatt point, the amount of money you will get under FIT goes down markedly. The stated aim in the consultation is that farm-based AD should take in food waste. If it is taking in food waste, it will then start producing more power because there are more kilojoules in the food waste, which will take it over the band. However, the very boundary itself, and the digression that is set in there, could bring about a major problem in that people will not take that extra step because they cannot get the funding.
The same financiers who have had certain problems with solar PV are the ones who are financing AD. It is extremely difficult to get any debt financing or equity financing for AD at the moment. This is of particular concern regarding the statement that if certain trigger points are met, there would be a retroactive reduction in the feed-in tariff for anything coming on-stream at that point. If we were nearing those targets, that would have a major implication for financiers financing schemes because they would not know which band tariff they would be under.
ADBA Chief Executive Charlotte Morton said:
It is a relief that the FiT consultation has finally been published, but the ambition for AD is low compared to the potential of the industry.
ADBA will be consulting with members on the tariff levels which have been proposed, including the suggested reductions.
The government needs to ensure that their policy on renewable energy, waste and land use is coherent. Our industry needs that stability and certainty to realise its full contribution to green growth, energy and climate change targets.