FIT to Close to New Applications in March

ADBA: Biogas Operators Need Clarity on Feed-in Tariffs

ADBA has commented on the Government’s response to the Feed-in Tariff (FIT) consultation, and the ‘disappointing lack of action on replacement generating equipment’

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The Anaerobic Digestion & Bioresources Association (ADBA) has commented on the Government’s response to the Feed-in Tariff (FIT) consultation, and the ‘disappointing lack of action on replacement generating equipment’.

During the summer the Department for Business, Energy and Industrial Strategy (BEIS) consulted on the closure of the Feed-in Tariff and administrative measures. The government response to this consultation has been published this week.

The Government has considered the comments and evidence provided and has decided to close the export tariff alongside the generation tariff. Its view is that a current fixed and flat rate export tariff does not align with the wider government objectives to move towards market-based solutions, cost reflective pricing and that it does not support cost reductions and value for money for consumers, as set out in the Control for Low Carbon Levies.

ADBA explained that this means that the FIT will close in full to new applications after 31 March 2019 subject to the time-limited extensions and grace periods. Despite a concerted effort by industry and many ADBA members, the Government has decided not to re-allocate budget from the deployment queues (from dormant and lapsed preliminary accreditation applications) that was unused.

On the replacement of generating equipment, the Government has decided that the evidence presented during the consultation does not allow for adequate assessment of likely rates of replacement or increases in load factors and as such they are spending more time examining possible options before taking a final decision on whether to undertake a detailed consultation on this issue. A response will be published in due course.

Although a decision has yet to be taken the government response does put forward two possible ideas for resolving replacement while ensuring little budgetary impact. Suggested are:

  • Reducing tariff rates following replacement, proportionally to the increase in load factor
  • A payment cap based on historical performance (e.g. annual average payments) or technology-specific load factors.

ADBA Chief Executive Charlotte Morton commented:

“It is disappointing that despite the strong views from industry, government continues to leave operators without a clear decision as to how to proceed - with the current legislation being silent on the matter of replacement and the current Ofgem guidance allowing isolated replacement of generating equipment.

“Operators need a clear direction from the Government on how we go forward from here and the options available to them. While these two proposed options may help, it is disappointing that action has been deferred and operators still have no clarity after this consultation. We would encourage the Government to take additional steps as soon as possible to give certainty to the industry.”

ADBA concluded that it will continue our engagement with BEIS on this issue as it develops.

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