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Government Incentives for AD
There are several policies that can benefit AD (although none were designed specifically to support AD):
- Feed-in Tariffs
- Renewables Obligation and accreditation for Renewables Obligation Certificates
- Levy Exemption Certificates
- Renewable Transport Fuel Obligation
- Renewable Heat Incentive (from 2011)
Feed-in Tariffs (FITs)
Feed-in Tariffs (FITs) provide a guaranteed price for a fixed period to small-scale electricity producers. This is intended to encourage the provision of small-scale low carbon electricity. The Government is committed to having FITs in place in April 2010. AD facilities of less than 5MW completed after 15 July 2009 will be eligible for the FIT. Facilities of less than or equal to 500kW will be entitiled to 11.5 p/kWh and facilities of greater than 500kW will be entitled to 9.0 p/kWh. The lifetime of the tariff will be 20 years.
Renewables Obligation
The Renewables Obligation (RO) is the main support scheme for large-scale (>5MW) renewable electricity projects in the UK. A Renewables Obligation Certificate ( ROC) is a green certificate issued to an accredited generator for eligible renewable electricity generated within the United Kingdom and supplied to customers within the United Kingdom by a licensed electricity supplier.
Anaerobic digestion is among the technologies that receive additional support in the form of multiple ROCs. Anaerobic digestion can receive 2 ROCs/ MWh.
To get accreditation for the RO by OFGEM, an AD plant needs to pass OFGEM's test of reasonableness and use an approved electricity meter. All information including application forms and guidance notes can be found on the OFGEM website.
Will my AD plant get ROCs or FIT? How will the transition be managed?
AD plant installed after 15 July 2009
Eligible installations will benefits from FITs
Schemes up to 50kW will automatically transfer to FITs at a fixed rate (9p/kWh- index linked) even if claiming ROCs currently
Schemes between 50kW and 5MW will get a one off choice between support under ROCs or FITs.
AD plant installed before 15 July 2009
If below 50kW and claiming ROCs will automatically transfer to FITs
If not claiming ROCs then not eligible for FIT payments
If selling electricity under a Non-Fossil Fuel Obligation (NFFO) arrangement then not eligible for FITs, but if over 50kW will remain eligible for ROCs.
Levy Exemption Certificates
Combined heat and power ( CHP) generated from eligible renewable resources is exempt from the Climate Change Levy (CCL). CHP Levy Exemption Certificates ( LECs) are the primary evidence that suppliers use to demonstrate to HM Revenue & Customs the amount of electricity supplied from certified 'Good Quality' CHP sources to non-domestic customers in the UK. For more information on CCL CHP exemption, see the relevant pages of OFGEM's website. For information on getting certification for quality CHP, see the CHP Quality Assurance programme.
Renewble Transport Fuel Obligation
The Renewable Transport Fuel Obligation (RTFO) requires suppliers of fossil fuels to ensure that a specified percentage of the road fuels they supply in the UK is made up of renewable fuels. Biogas is eligible for Renewable Transport Fuel Certificates provided that it is dutiable and produced wholly from biomass. The duty incentive for 2008/9 and 2009/10 is 20p, and it is guaranteed that the total package of support (buy-out + duty incentive) will be 35p in 2009/10 and 30p in 2010/11.
More information can be found at the Renewable Fuels Agency, who administer the RTFO. If you wish to register for the RTFO, see this page from the Renewable Fuels Agency.
The Renewable Heat Incentive (RHI)
Powers in the Energy Act 2008 allow the setting up of a Renewable Heat Incentive (RHI). The RHI can provide financial assistance to generators of renewable heat, and producers of renewable biogas and biomethane. The details of the scheme have not been finalised. The aim is for the RHI to be in place by April 2011.
See the DECC pages on renewable heat for more information.
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