UK Energy Bill - Feed-in Tariffs Welcomed by Biogas Industry

Legislation News from the New Energy Focus Web Site; Industry welcomes feed-in tariffs for power and heat

Biomethane transport fuels company CNG Services has said the renewable heat incentive would allow "green gas" to be used to fuel commercial vehicles.

The renewable energy industry has welcomed government plans to bring in feed-in tariffs for green power and heat - but has called for a clear timetable for their introduction.

Separate tariff schemes are being developed to promote small scale electricity generation and to incentivise the use of renewable fuels in producing heat (see this New Energy Focus story).

The renewable energy sector's trade association, the Renewable Energy Association, said today that the proposals being included within the Energy Bill are "vague" and that no timetable is given within the legislation.

The REA, which has been lobbying for some time to get a feed-in tariff to promote both small scale renewable electricity and heat, said there was enthusiasm among its members for the government's decision to adopt the measures.

Philip Wolfe, director general of the REA, said: "The REA has repeatedly called for the introduction of a tariff and we are delighted that government has recognised that this incentive will encourage new groups of players into the market. We also welcome the recognition of the urgent need to support renewable heat and biogas. Heat represents the biggest energy use in the UK, and had previously been ignored by policy-makers.

"However the amendments it has tabled are very vague and the lack of any firm timetable shows that there's still a long way to go," Mr Wolfe added.

3MW Cap

The wind industry's trade association, the British Wind Energy Association, also welcomed the feed-in tariff amendment, but expressed concern regarding the 3MW cap included within the legislation.

This cap means that projects above a 3MW size would receive support through the Renewables Obligation, with smaller projects rewarded with the feed-in tariff. However, the government could set a lower cap through secondary legislation as it finalises the details of the feed-in tariffs.

Jennifer Webber, public affairs manager at BWEA, told New Energy Focus today: "We are delighted to see that the Secretary of State has tabled this amendment as we have been calling for it for some time. However we do feel that the threshold of 3MW is too high, and we are concerned that it could interfere with the function of the Renewables Obligation. We would like to see the threshold lowered to 250-300kW."

The biogas sector has welcomed the proposed renewable heat incentive, suggesting the move was "potentially significant".

Biogas companies believe the incentive will offer an alternative to the current Renewables Obligation, which pushes plants like anaerobic digesters to generate electricity by burning biomethane - wasting the heat produced in the power generation.

UK Incentives for Anaerobic Digestion Welcomed

Biogas Firms Welcome Natural Methane Incentives

As scientists claim methane emissions are rising faster than expected, the government unveils plans for improved incentives for methane capture projects, says
Andrew Donoghue, BusinessGreen, 31 Oct 2008

Industry has welcomed the government's introduction this week of a new clause in the energy bill which will provide incentives for natural methane capture and biogas projects designed to produce renewable energy.

The move increases existing support for renewable methane projects, which produce or capture methane from landfill sites, sewage and slurry, or anaerobic digestor technologies, and aims to make it easier to connect the resulting biogas grid.

Under the new amendment, renewable gas producers will be able to add the methane to the gas grid and will receive government subsidies for that process, according to gas consultancy CNGS Services.

"At the moment the UK is the biggest producer of biogas in Europe," said CNG's managing director, John Baldwin. "By 2020, I hope that the UK government will have implemented a target, in the same way the Dutch and German governments have a target, so that 10 per cent of the gas that is burned is renewable."

According to Baldwin, it is important that the government gets behind renewable or biogas production because North Sea reserves of natural gas are decreasing and by 2020, the UK's use of indigenous suppliers could drop to about 30 per cent compared with 70 per cent imported gas. But with backing for renewable gas, the figures could change to 30 per cent use of indigenous fossil gas, 10 per cent from renewables and 60 per cent from imports, Baldwin claims.

Currently, generators of electricity from renewable sources receive a Renewable Obligation Certificate (ROC) for every megawatt produced. From next April, electricity created from natural methane will be credited with two ROCs for every megawatt – equivalent to about £100.

CNG and other members of the Renewable Energy Association hope that the amendments to the energy bill announced this week will also provide incentives – equivalent to two ROCs – rewarding electricity producers for the waste heat that is generated from burning renewable gas.

Renewable gas is only about 30 per cent efficient and a lot of heat is wasted, but by adding the gas to the grid, backers of the technology believe that the wasted energy can be more efficiently harnessed.

The increased support for renewable methane follows reports released this week that levels of natural methane in the atmosphere have increased dramatically over the past 12 months. According to scientists from MIT, the rise in 2007 was about 10 parts per billion over the course of a year.

The rise is being put down to a decline in the amounts of a compound called hydroxyl free radical, which naturally breaks up methane in the atmosphere. Methane is a greenhouse gas which is many times more effective than carbon at blocking in heat.

Commenting on the rise, CNG's Baldwin said that one way to combat the rise of natural methane is to make sure more waste is used to create renewable gas that can be harnessed and burned, rather than allowing it to generate natural methane.

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