Support, but Renewables Review leaves questions

London – The Government has announced its decision on the support levels given to renewable energy technologies supported under the Renewables Obligation (RO).

DECC has confirmed that energy-from-waste CHP will retain 1 ROC per MWh of electricity generated, rather than the cut to half ROC proposed in the consultation.

The renewables industry had been calling for the 1 ROC level of support to be retained to ensure that a pipeline of around 500 MW of new energy from waste CHP could still be built.

DECC’s announcement confirmed that bioenergy CHP will lose its RO uplift in 2015 - two years before the end of the RO.

According to the CHPA (Combined HEat & Power Association), while Government is proposing to replace this support with revenues from the Renewable Heat Incentive, investors remain sceptical over the value and certainty of the new instrument.

Rejection of calls for a ‘bridge’ in the RO to 2017 increases the urgency to establish a CHP ‘band’ under the RHI and confirm future budgets, it said.

Alongside the announcement of the RO banding review, DECC has reaffirmed the Government’s position that gas will continue to play an important role in our electricity generation mix.

In contrast to the position on energy-from-waste, there are no incentives to ensure that a new generation of gas plant is built as CHP to cut emissions.

Tim Rotheray, head of policy at the CHPA, said: “This is great news for energy-from-waste CHP plant. DECC has listened to the industry’s representations on the need for incentives to drive efficiency and provided the reassurance that developers need.”

However, Rotheray believes the DECC should extend this commitment to efficient use of energy to biomass- and gas-fired plant.

“Right now, what the industry desperately needs is the clarity that can make the RHI a bankable incentive,” he said. “The right decision will ensure that we extract the full value of these important resources, keeping bills down for businesses, homes and communities.

Rotheray also wants action to plug a “gaping hole in energy policy” due to the increased focus on gas.

“Without effective incentives for CHP, to match those now confirmed for Energy from Waste, then the opportunity to minimise the impacts and maximise the benefits of a new generation of gas plant will be lost,” he said.

For its part, energy-from-waste business Energos welcomed the government’s decision to reverse proposed changes to Renewables Obligation Certificate (ROC) support for Advanced Conversion Technologies (ACT).

“This is a victory for common sense”, said Nick Dawber, managing director of UK-based Energos.

By maintaining maximum support for all ACTs at 2 ROCs/MWh - both for new accreditations and existing schemes - the government will help [industry] bring to market best-in-class technologies, he said.

“The government has recognised that its comparisons of the efficiency of ACTs was not on a like-for- like basis and that steam cycle facilities, such as those developed by Energos, have merit,” the MD commented. “Indeed, the ROC market will itself drive efficiency upwards, which is what government seeks.”

Energos opened the UK’s first full scale gasification ACT plant to operate on household waste on the Isle of Wight in 2007. This was the first waste fuelled gasification or pyrolysis plant operator in the UK to qualify for ROCs in October 2010.

The company is receiving maximum double ROCs for the electricity generated from the renewable portion of the residual household waste (typically around 50%).

Dawber concluded: “Today’s decision provides investment certainty and gives the green light to our six “shovel-ready” projects, valued at £450 million and capable of diverting 650,000 tonnes of non-recyclable waste from landfill.

“The government has also signalled that combined heat and power (CHP) enabled plants such as ours may be eligible for additional support under the Renewable Heat Incentive.”