ROC removal will hurt AD

ADBA PRESS RELEASE

The Anaerobic Digestion and Biogas Association, which represents 300 businesses in the UK’s AD sector, has accused the government of undermining investor confidence and prospects for green growth by the sudden proposal to prevent AD projects under 5MW from claiming Renewables Obligation Certificates from 1 April 2013.

The move was announced today [25 July] as part of DECC’s response to the RO Banding Review, despite not being mentioned in the consultation. The overwhelming majority of AD projects are below 5MW, so the industry is effectively being excluded from the RO. Given that typical project development times are well over a year, this proposal is likely to affect AD plants which are already being built, as well as hitting investor confidence more widely.

The government committed to a “huge increase in energy from waste through anaerobic digestion” in the Coalition Agreement in 2010.

Reacting to the announcement, Charlotte Morton, Chief Executive, ADBA 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.