Anaerobic digestion industry fights to survive

The Anaerobic Digestion & Bioresources Association has today strongly objected to DECC’s plans to massively cut back government support for new AD plants. The association’s response to the review of the Feed-in Tariff called for the government to set out much more ambitious plans for delivering new anaerobic digestion (AD) plants.

DECC’s proposals would cut industry growth to negligible levels compared to 2014 and 2015, failing to deliver the baseload electricity generation capacity that would help keep the lights on.

The proposed ‘cap’ in capacity supported represents a budget cut of 65% for plants 500kW compared to deployment in 2014.

In making the case for how government proposals threaten the industry’s development, ADBA’s Chief Executive, Charlotte Morton, explained:

The ridiculously low deployment levels set out in DECC’s consultation threaten the industry’s ability to generate extra capacity and deliver our potential. Without continued growth in AD, the industry cannot contribute the additional baseload electricity to help keep the lights on, offer cost-effective greenhouse gas reduction or grow a domestic supply chain which could export to the world.

DECC’s proposed deployment cap represents just 72.7MW over three and a quarter years – but to put this in context the AD industry deployed 47.9MW from 89 plants under the FIT scheme in 2014 alone. We understand government’s need to ensure value for money, but they should recognise that AD delivers much more than energy alone, and can reduce the cost of support over time if it is supported now.

Of course this cap comes in addition to the government’s decision to remove pre-accreditation from the FIT scheme. Given the length of time that it takes to develop AD plants, the announcement has already had a crippling impact on investor confidence – we know that £250 million of investment is on hold from two prospective investors alone. It is crucial for DECC to offer tariff guarantees early in the project development process to restore investors’ faith in government.

The decisions outlined in the consultation do not just affect jobs and investment in rural communities through the AD industry. Far from lessening the impact on bill payers, these decisions will have a profoundly negative affect on UK energy, resource and carbon abatement costs. Highlighting this point, Charlotte added:  

DECC’s current proposals would prove disastrous for bill payers – prompting higher consumer bills in the long-term, a greater reliance on energy sourced from volatile parts of the world, an uncertain future for UK farming resilience, and a carbon abatement bill in the billions.   

The Energy Secretary suggests that these decisions are aimed at ‘re-setting’ government policy to deliver cost effective baseload energy – but ADBA has provided evidence showing how AD will offer cheaper baseload energy than new nuclear by the time Hinkley Point C is delivered, providing localised generation without the risk of a single large development.