Biomass Given Further Support Under Renewable Obligation

The eagerly awaited response to the consultation looking at guaranteeing subsidy levels for the technologies was published by the Department of Energy and Climate Change (DECC), alongside a raft of further energy announcements.

It means that facilities using EfW and AD, as well as dedicated biomass technologies, will be able to receive the same level of support under the RO as they did when first accredited, for a 20 year period.

Under the current RO system, EfW, biomass and AD plants are not ‘grandfathered' , meaning accredited facilities could see the number of Renewables Obligation Certificates (ROCs) they receive for every MWh of electricity they generate change whenever a review of the RO banding for technologies is carried out.

With no other renewables technologies being treated in this way, concerns had been raised that the situation was holding back the development of biomass-related technologies.

But, in a statement, DECC said its decision to add grandfathering for the biomass-related technologies "provides the certainty that investors have been looking for electricity from dedicated solid and gaseous biomass, energy from waste, anaerobic digestion and advanced conversion technologies such as gasification and pyrolysis."

Following today's confirmation, AD plants that are accredited under the RO by March 31 2013 will receive 2 ROCs/MWh, regardless of any changes to the AD banding made under reviews - the first of which is scheduled for autumn 2010.

Similarly, energy-from-waste facilities with combined heat and power technology accredited by the same point will receive the current level of subsidy for their technology, which stands at 1 ROC/MWh.

In a turn-around on its original proposals, DECC has also revealed that all of the costs for dedicated biomass projects, including capital technology costs and the fuel element, will be fully grandfathered - albeit without existing generators being able to be "up-banded" if RO support for new biomass plants is increased in the future.

The department had originally proposed that facilities using dedicated biomass would only receive guaranteed support for the capital costs, while the fuel element's banding could change under review.

The grandfathering confirmation has been welcomed by the Renewable Energy Association (REA), which has previously claimed that up to 5,000MW of projects using the technologies in question have been "stalled" in the development process (see this NewEnergyFocus.com story).

Chief executive of the REA, Gaynor Hartnell, said: "Today's announcement will come as a great relief and follows many months of intense discussions between the industry and government.

"This brings most bioenergy projects into line with other technologies such as wind. Levels of financial support (ROCs) for completed projects are now guaranteed for 20 years, even if the rules change in the future. This should unlock some £13 billion of much-needed private investment in the sector."

She said that for this to happen, lenders must have confidence in the support mechanism, which she claimed had been "lacking", but added that today's announcement gives clarity.

Ms Hartnell added that, as well as creating energy generating capacity, the projects also had a major role to play in areas such as waste management, as well as encouraging innovation due to their often "cutting edge" nature.