It was meant to be the one part of the government's fast-track review of feed-in tariffs that would prove uncontroversial.
After today proposing deep cuts to the level of support for large solar installations, the government also announced increases to the incentives available to anaerobic digestion (AD) technologies as part of an effort to accelerate adoption of the waste-to-energy technology.
However, businesses have accused the government of failing to understand the full economic requirements of anaerobic digestion technology and proposing inadequate levels of incentives for AD systems. The Department of Energy and Climate Change (DECC) has launched a consultation proposing increased incentives for AD plants, arguing that only two AD plants have been accredited for feed-in tariffs to date.
Under the current feed-in tariff scheme, all AD power plants with a capacity of up to 500kW will receive 12.1p/kWh from 1 April, while plants with a capacity of between 500kW and 5MW will receive 9p per kWh. However, the consultation proposes changing the banding and increasing the incentives, so smaller plants capable of producing up to 250kW will receive 14p per kWh, while medium-sized plants capable of producing between 250kW and 500kW will receive 13p per kWh. Plants with a capacity of more than 500kw will see their feed-in tariffs remain unchanged at 9p per kwh.
But industry groups have now warned the proposed rates will fail to encourage businesses to install AD plants and will do little to boost investor confidence.
Charlotte Morton, chief executive of the Anaerobic Digestion and Biogas Association, said DECC's key aim of boosting "farm-scale" waste-to-energy plants would not be acheived with the proposed rate of incentives. She told BusinessGreen that AD plants that process waste also require expensive pre-treatment facilities, which can cost as much as the power-generating technology. Therefore, she argued it would not be economically viable for a business to install a waste-to-energy plant smaller than 1MW.
Meanwhile, plants with more than 1MW capacity will not see their incentives increase under the proposals, prompting Morton to predict the changes will fail to boost adoption of AD systems of any size.
She accused the government of developing "completely inconsistent" policy and said it has misunderstood how AD can work on a small scale. "The band rates are not really going to please anybody, and we're also not clear about what the government is trying to achieve," she said. She also urged DECC to set specific dates for when the tariffs would be decreased in order to provide potential investors with certainty.
Her comments were echoed by the Renewable Energy Association's chief executive Gaynor Hartnell, who described the tariff changes as "meagre" and unlikely to prompt much of an increase in small-scale AD.
"That's a missed opportunity, as methane emissions from agriculture can be reduced by on-farm biogas plants," she said, adding that government's concern over energy crops "is totally misplaced".
Simon Rigby, non-executive director of AD specialist Farmgen, was similarly disappointed with the proposals. The company builds 1MW plants, but had also been considering selling 500kva and 250kva units. However, he said the review of feed-in tariffs would not make these smaller systems economically viable.
"We were hoping for a decent platform for on farm AD, but the review is so marginal I cannot see it achieving the government's objective to balance the feed-in tariffs, and therefore will not affect the take-up," he said. "If anything, the change sets back our plans as it is so marginal and does not apply to economic plants [of 1MW or more], and will therefore knock confidence in on-farm AD even further."
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