UK Biomass Strategy and ROCs Payments

We are sure that many of our subscribers are watching the Anaerobic Digestion scene just waiting for the confidence that the UK government really is going to give increased support to AD through the ROCs scheme, before making some big decisions.

If, as seems likely, a doubling, of ROCs is soon announced, this will give the economic viability of Anaerobic Digestion a big push forward. We would like more of course, but at least this is going in the right direction.

While we await a formal announcement of the ROCs changes, which we are all hoping will be favourable to Anaerobic Digestion by doubling the current ROCs subsidy payments in the near future, has everyone taken a look a the UK government report setting out their strategy?

If you have not I suggest that it is worth reading the Biomass Strategy Report here, which "sets out our broader policy on improving the recovery of energy from waste".

Also Richard Parker and Renewables East have published a document on the DEFRA web site which is well worth looking at as it lists other UK government renewables incentives and how they may be applied to Anaerobic Digestion. I have copied part of it below, but for the full document including a chart showing the projected payment value for AD (£/MWh) energy including ROCs at double, and further information on other financial assistance available for bio-energy plants such as enhanced capital allowances you need to click here.

BIOFUELS

Since 2001, the Government has provided an incentive for business investment in energy-saving and environmentally beneficial technologies through enhanced capital allowances (ECAs).

ECAs
give a 100 per cent first-year capital allowance for the purchase of qualifying plant and machinery.

The Government is also presently engaged with the European Commission over a State aid application to extend the ECA scheme to the most carbon-efficient biofuels plant.

The Government’s intention is to extend payable credits to investments of this type, although this will be subject to the same state aid application procedure. As with the SME R&D tax credit, the arrangements for payable ECAs would allow companies to surrender the element of their trading losses attributable to ECAs in return for a cash payment from Government. The unrelieved trading loss would then be reduced by the amount surrendered.

Business tax reform - July 2007