Consultation Response

Transcription

1 Consultation Response Review of Support for Anaerobic Digestion and micro CHP under the FiT scheme Date: 13 Introduction The CLA is the membership organisation for owners of land, property and businesse in rural England and Wales. We help safeguard the interests of rural businesses and those with an economic, social and environmental interest in rural land. Our 33,000 members own or manage around half the rural land in England and Wales and represent more than 250 different types of business. The CLA is supportive of the government s objectives on climate change and see an important role for land based renewables in delivering the clean energy the UK requires. CLA members have undertaken or are involved in a wide range of renewable energy projects at all scales including a large proportion of the anaerobic digestion projects undertaken in the UK to date with a particular focus on farm anaerobic digestion. General comments Anaerobic digestion is a technology which offers significant potential for the UK not just in terms of energy generation, but in delivering a wide range of environmental benefits through improved waste management and wider benefits to the agricultural sector in particular. The changes proposed in this consultation are likely to mean a significant opportunity to deliver benefits within the agricultural sector are missed. The Anaerobic Digestion Strategy & Action Plan which was drawn together by DECC, Defra and industry stakeholders including the CLA identified the need for around 1000 on farm AD plants across the UK would be required to establish a sustainable industry. The sector remains some way off this target and continued sector support will be required to continue deployment and deliver on the potential that AD offers. We also note that the Committee on Climate Change references the use of anaerobic digestion as a means of tackling agricultural emissions which will form an important part of future climate change targets. We are therefore disappointed with the changes proposed both in this consultation and with the introduction of FIT deployment caps earlier in the year which we and other stakeholders believe will significantly limit further deployment of anaerobic digestion within the UK farming sector. We have addressed the consultation questions relating to anaerobic digestion below. Page 1 of 5

2 Questions 1. Do you agree or disagree with the proposed AD and/or mchp generation tariff rates? Please provide reasons to support your answer. We disagree with the tariff rates proposed for anaerobic digestion. In particular we disagree that the rates proposed for smaller scales of AD will be sufficient to drive continued deployment of AD plants within the farming sector where the technology can deliver multiple environmental benefits. We and other stakeholders have seen no corresponding reduction in deployment cost for the technology to suggest that the tariff reduction proposed can be justified. We do not believe that the number of applications coming forward is a signal of sustained interest. In our view it is more likely that the number of applications coming forward is influenced by the application process itself more than the attractiveness of the scheme and we would expect to see high levels of attrition rates from the current pipeline of applications with these new tariff rates. 2. Do you agree or disagree with the updated AD assumptions? If you disagree, please fill out the evidence survey provided as part of the consultation and include documented evidence, such as invoices and/or contractual agreements to support this evidence. Please also mark this evidence as commercially sensitive where appropriate. We disagree with the assumptions in particular the assumption of a gate fee of 20 per tonne being achievable. We understand from discussions with operators and other stakeholders that gate fees are significantly lower due to competition between AD plants for limited volumes of food waste. Government progress on segregated food waste collections will be required to ensure sufficient waste feedstock is available if higher gate fees are to be achieved. It should be recognised that achieving a long term supply of feedstock is a key factor in being able to secure financing for an AD plant. Waste contracts are often relatively short and as a result additional non waste feedstock s may be required to ensure a constant supply in order to secure financing as well as to combat seasonal short falls in the supply of food waste. As already mentioned we do not think the current number of applications provides a reliable indication of the future interest in the scheme and we expect high levels of attrition. Page 2 of 5

3 3. Do you agree or disagree that the proposed AD default degression pathways fairly reflect future cost and bill savings assumptions for AD? Please provide your reasoning, supported by appropriate evidence where possible. We would disagree. As already said we have not seen evidence of cost reductions in deployment of AD to suggest that the level of tariff reduction proposed is justified. Some costs may actually be increasing. We also believe the deployment cap is too restrictive for AD especially given the limited spending on AD under the FIT to date in comparison to other technologies and the many benefits the technology can deliver. 7. Do you agree or disagree with the sustainability criteria proposals on: who the criteria will apply to; the greenhouse gas emissions limits; the reporting requirements; and consequences of non-compliance? We agree with the principal of applying sustainability criteria for AD under the FIT so that it aligns with the requirements under the RO and RHI, provided they only apply to new applications and are not applied to existing plant. However, Government should note that introducing sustainability criteria does impose an additional reporting burden and cost which creates a further barrier to deployment, particularly for small, on farm plants. An exemption for smaller plants below 250kW which utilise at least 50% waste or residues should be applied with these plants being considered to automatically meet sustainability criteria. This would reduce complexity for smaller plants and help to provide some non financial incentive to encourage smaller scale on farm plants which are recognised as delivering multiple environmental benefits. We would also highlight that reporting on feedstock sustainability should be done on annual basis and not quarterly in recognition of the seasonal availability of some agricultural feedstock s and the impact this has on the proportion of crop feedstock s used at different times of the year. For example in many cases livestock are only housed over winter and so manures and slurries may not be available during summer months when a higher proportion of crop feedstock s would be required. As such feedstock consumption and sustainability should be reported on annual averaging basis. 8. Do you agree or disagree that limiting the use of some feedstocks will deliver more cost-effective carbon abatement? Apart from wastes and residues, are there other feedstocks which should not be subject to payment restrictions? Please provide evidence to support your answer. Please also confirm whether or not you have provided the same answer to this question in the RHI consultation. We disagree that limiting the use of some crop feedstock s will deliver more cost effective carbon abatement. The use of crop feedstock s can deliver a wide range of non energy environmental benefits on farms. These benefits are more difficult to measure and value and so are largely unaccounted for currently. Page 3 of 5

4 If the use of crop feedstock s are to be restricted then progress will need to be made on increasing the availability of waste feedstock through improved food waste collection. Further clarification and simplification around the use of residues, discards and wastes will also be required to ensure best use of these materials and maximum flexibility for operators. We would also highlight that these restrictions could stifle innovation in the use of non maize crop feedstocks As the main concern expressed by Government is seemingly around the use of maize as a feedstock we would suggest that the option 2 payment restrictions might only be applied to the use of maize as a feedstock. This would allow operators and developers to continue to explore the use of new types of crop feedstock which may deliver further positive outcomes. In particular we are aware of the potential to use grass silage from a variety of sources as a feedstock which could deliver many beneficial outcomes. 9. Do you prefer option 1 or 2 for restricting payments based on feedstocks? Please provide your reasons and any supporting evidence, including any impacts on generators/nominated recipients and feedstock suppliers. Please also confirm whether or not you have provided the same answer to this question in the RHI consultation. Our preference would be for option 2. We provided the same answer in the RHI consultation response. We would again highlight the need for accounting for feedstock use to be averaged over 12 months rather than quarterly to allow for seasonality in feedstock supply. We would also question whether a limit of 50% of the gas yield to come from crop feedstock is realistic and may prevent the use of some lower yielding waste feedstocks. A higher limit on the gas yield coming from non waste feedstock s should be allowed should to enable greater flexibility and enable the widest use of waste feedstock s and allow for seasonal fluctuations in feedstock availability. 10. Do you agree or disagree with the proposals on restricting payments based on feedstock type regarding: sending the calculation of eligible electricity to Ofgem for assessment; introducing auditing requirements (including for installations below 1 MWe); consequences of non-compliance? Please provide your reasons, including in particular any impacts on generators/nominated recipients. Regarding the introduction of auditing requirements, please confirm whether have provided the same answer in the RHI consultation. It is essential that any reporting avoids excess complexity to ensure it remains workable and practical for plant operators and does not represent an additional barrier to undertaking AD. Page 4 of 5

5 Excessive reporting requirements are likely to restrict the uptake of small scale on farm biomass plants in particular. 11. Do you think there are any wastes which should not be subject to unlimited payments or whether there is additional evidence that can demonstrate that the generator intends to use waste? Please provide your reasons. Please also confirm whether or not you have provided the same answer to this question in the RHI consultation. No, we do not think there are any wastes which should not receive unlimited payments 13. In relation to the sustainability criteria and feedstock restrictions proposals, do you agree or disagree with the proposal to amend the FITs Order to ensure that a generator is given a fair hearing before tariff payments are reduced, withheld or recouped? Please provide your reasons Yes we agree that this is sensible For further information please contact: Tom Beeley Renewable Energy Adviser CLA, 16 Belgrave Square London SW1X 8PQ Tel: Fax: Tom.Beeley@cla.org.uk CLA reference (for internal use only): Page 5 of 5