The Department of Energy and Climate Change (DECC) has published a consultation on adjusting financial support for injecting biomethane from anaerobic digestion and other renewable sources into the gas grid.
The Renewable Energy Association (REA) has welcomed the intent of this review – to ensure an increasingly cost-effective contribution of biomethane to low carbon heating and transport – but has expressed concerns about the detail of the proposals, which in the worst-case scenario could halt all but the smallest biomethane developments.
While the consultation, which runs for only four weeks, acknowledges the value of biomethane for making a significant, cost-effective contribution to the UK’s 2020 renewable energy target, the REA says the measures it proposes could do as much damage to the green gas sector as the current review of the Renewables Obligation is doing to the large scale solar power sector.
It claims that these proposals could make biomethane projects injecting over 15 million kWh/year unviable (roughly 800kWe). This is half the size of a typical biomethane plant currently registered on the Renewable Heat Incentive (RHI), with all of the biomethane projects currently in development also bigger than this. The Green Gas Certification Scheme has previously projected a pipeline of 400 million kWh of certified green gas in 2015 – enough to heat 30,000 homes – but these projects could now be at risk.
The current level of support for biomethane is 7.5p/kWh, which is well below the government’s two ROC ‘value for money caps’. While industry broadly agrees there is cause for reducing the tariffs, cutting too deep and too fast will mean that biogas will only be used for electricity generation rather than grid injection, meaning the UK misses out on its valuable contribution to cost-effective low carbon heating and transport.
REA chief executive, Dr Nina Skorupska, said:
“It is right that government looks again at the green gas RHI tariff because the original policy design preceded any actual development in the UK, yet the pace and depth of the changes give real cause for concern.
“Green gas can be injected into the grid and drawn upon at any time for heating or transportation. Shrinking the tariff so it only works for very small plants is simply inefficient in terms of maximising the value of the biomethane feedstocks. The whole industry is going to have to work fast, hard and smart to ensure these proposals help rather than hinder the sustainable growth of the UK green gas industry.”