Monday, March 21, 2011

Anaerobic digestion wins in Feed-in Tariff review

The government is recommending increased support for farm-scale anaerobic digestion (AD) at the expense of “solar farms" over 50kW, in an effort to maximise the benefit of limited resources.

This is a good thing as the technology has numerous advantages over PV - including reliability - which I'm outlining in a subsequent post this morning.

The new consultation follows the launch in February of the fast-track review into how the Feed-in Tariffs (FITs) work for solar photovoltaic (PV) over 50 kW. This followed evidence of 169 MW of large scale solar capacity in the planning system - equivalent to funding solar modules on the roofs of around 50,000 homes if tariffs are left unchanged.

The government feels that leaving this unchanged would soak up most of the subsidy that would otherwise go to smaller schemes or other technologies. Such a development was not envisaged at the start of the programme.

The consultation also recommends increasing support for farm-scale AD, as it has received disappointing uptake so far. The heat component of AD is also supported through the Renewable Heat Incentive (RHI). This means that where the biogas is burnt to produce heat and power AD is eligible both for the RHI and FITs.

It could be argued that it doesn't matter where the PV modules are as long as they are generating electricity. But the government's concern is that PV be available to ordinary people and not big business.

Greg Barker, Climate Change Minister said: “I want to make sure that we... allow even more homes to benefit from feed in tariffs... and put a stop to the threat of larger-scale solar soaking up the cash. The FITs scheme was never designed to be a profit generator for big business and financiers."

Installations larger than 50 kW will receive support as follows:

• 19p/kWh for 50kW to 150kW
• 15p/kWh for 150kW to 250kW
• 8.5p/kWh for 250kW to 5MW and stand-alone installations.

These compare with the tariffs that would otherwise apply from 1 April of:

• 32.9p/kWh for 10kw to 100kw
• 30.7/kWh for 100kw to 5MW and stand-alone installations.

These reductions are comparable to those in schemes in Germany, France and Spain, where tariffs for PV have been reduced sharply over the past year.

The new increased tariffs for AD, designed to make them more attractive, are:

• 14p/kWh for installations up to 250kW
• 13p/kWh for installations from 250kW to 500kW.

These compare with the tariffs that would otherwise apply from 1 April of 12.1p/kWh for AD up to 500kW. The tariff level set for biomethane injection into the gas grid under the RHI and also for small scale - below 200 kilowatt thermal (kWth) – combustion of the biogas produced by AD is 6.5 pence per kilowatt-hour of heat generated.

The idea is specifically to increase the energy obtained from waste through anaerobic digestion, not to promote energy crops, particularly where these might be grown instead of food crops. DECC is in discussions with Defra and others about ways to ensure this does not happen.

Subject to the outcome of the consultation and parliamentary scrutiny, the revised tariffs would be introduced from 1st August 2011.

Over 27,000 installations have been registered for the FIT scheme to date.

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