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Will Political U-turn Support the UK Anaerobic Digestion Industry?

Dec 18, 2013

Mrs Thatcher famously said “the lady’s not for turning.” But the same can’t quite be said for the coalition government, which is modelled very closely to the conservatism of the Thatcher cabinet – they make more U-turns than a lost learner driver.

However, the second thoughts over anaerobic digestion have been cause for cheer. This means that 50-kW to 5-MW facilities will keep receiving their Renewables Obligation Certificates (ROCs) in the U.K. But why is this so important?

Renewables Obligation Certificate

In order to start boosting the renewable energy generation sector, renewables obligation was born. After 2002, businesses were put under pressure to source a percentage of their energy from renewable sources. This figure adapts annually, to help support the government’s Climate Change Act targets.

Regulator Ofgem hands out the ROCs to electricity generation companies which create energy in a sustainable way. An energy supplier must collect enough ROCs from these businesses to satisfy their RO target, set by the government.

The normal electricity cost carries a premium add-on price for the ROCs; it’s more favourable than the alternative, which is playing a penalty to Ofgem.

Ofgem then shares all the cash it collects from fines to the companies that collected enough ROCs in time.  

ROCs for Anaerobic Digestion Plants

The government considered depriving anaerobic digestion plants of ROCs, which would obviously impact heavily on the profitability of this sustainable energy sector. Fortunately, the government has changed its mind and started funding biogas projects across the UK instead. Hurrah for supporting, rather than hindering, renewable methods of energy production!

Sustainable companies will welcome the £450 million of infrastructural investment in pipelines for anaerobic digestion, which will create more than 500 jobs. From the government’s perspective, this must be a wise move, as they still have to hit their Climate Change Act targets by cutting carbon emissions.

Small Scale Anaerobic Digestion

With new proposals for small scale anaerobic digestion plants throughout the U.K., you can even locally source your own energy from this renewable technology. Could it get any more eco-friendly than this?

Germany is leading the way with more than 6,000 anaerobic digestion plants, thanks to incentives from the state. Each of these facilities is huge and operates at above 1 MW.

That said, small scale anaerobic digestion is being championed as the perfect solution to support an overloaded National Grid. Agriculturalists can make their land more eco-friendly by purchasing their own 20-25kW or 50-kW systems, which generate heat, power, and digestate from animal slurry.

This could be an ideal answer to the farmers who live far off the beaten track, who struggle without a reliable energy supply, and can’t be reached easily. If you have a lot of waste on your hands, why not put it to good use? 

In terms of the legal ramifications, there are a variety of questions which need to be considered, particularly when it comes to site planning, securing feedstock supply and contractual funding agreements.  In other words, having a relevant solicitor who understands the changes in government policies and regulatory requirements. This is imperative because the degree of risk can be significant, meaning any decision made can have far reaching consequences.

Farmers can expect a 12.5 percent to 16.4 percent return on their initial investment (based on conservative figures), so it’s really worth their while. Agriculturalists can enjoy greater self-sufficiency and fertilise their own lands without a waste permit or licence.

Lead image: Biogas facility via Shutterstock

The information and views expressed in this blog post are solely those of the author and not necessarily those of RenewableEnergyWorld.com or the companies that advertise on this Web site and other publications. This blog was posted directly by the author and was not reviewed for accuracy, spelling or grammar.

A marketing executive working on behalf of Energ Group to fulfil the marketing ambitions of the 8 divisions held in Energ Group. This includes the awareness of them being at the forefront of renewable energy sources such as energy from biomass, geothermal, solar thermal among many more energy po...

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