RHI cuts would halt biogas investment, campaigners warn

Investment in the burgeoning biogas sector would be brought to an “immediate halt” if the government scraps the Renewable Heat Incentive (RHI), campaigners have warned.

Biogas has been a major success story over the past five years, with projects increasing exponentially from one pilot scheme injecting gas to grid in 2010 to a total of 36 in 2015.

But concerns have been mounting that the government, which has recently cut a number of renewables subsidies, will scrap the RHI.

Incoming energy secretary Amber Rudd has signalled a wish to see renewables technologies such as biogas become self-sufficient so as to reduce consumer costs.

“Although renewable energy costs have been coming down, subsidies still form part of people’s energy bills and as the share of renewables in the mix grows, the impact gets proportionally larger,” she said in Parliament recently.

Speaking to Utility Week, Renewable Energy Association head of biogas Kiara Zennaro said if RHI subsidies, the primary policy supporting biogas projects in the UK, were to be scrapped it would be “absolutely detrimental” to the development of the sector.

“The government committed to keeping the RHI open to new applications until 2020 and it is paramount that the new government sticks to this commitment,” she said.

In its June 2015 report to Parliament, the Committee on Climate Change urged ministers to continue the RHI until 2020 to deliver low-carbon heat and meet the UK carbon budgets.

“Bioenergy (including biomethane), heat pumps and solar thermal will need continued support through to 2020 if we are to meet the UK’s climate change targets in a cost effective way,” said Zennaro.

Managing Director of CNG Services, specialists in the biogas to grid, John Baldwin, told Utility Week that, because of the recent growth of the industry, there is “likely to be tariff degression between 1 October and 1 January 2016”.

“We will have a better idea about extent by the end of August, when [the Department of Energy and Climate Change] next updates its forecasts,” he said.

Last month, the government announced the withdrawal of £500 million of support for biomass and an unconfirmed amount for small scale solar, following the revelation that Decc overspent its £7.6 billion budget for the Levy Control Framework by £1.5 billion.

The move followed similar action on subsidies for onshore wind, which saw support under the Renewable Obligation end a year earlier than planned. The changes to the RO support for small scale solar would be backdated to today following a consultation on the changes, which closes on 2 September.

Decc is also seeking to remove pre-accreditation for renewable projects under the Feed-in Tariff regime. This would mean that developers would not be awarded a guaranteed level of support in advance of the project being commissioned as is currently the case.