The recent announcements by DECC on incentives and pre-accreditation will harm the development of smaller scale on-site AD (on farms, community and industrial sites) as it adds to uncertainty on the level of investment return that commercial investors require. It also shows that the Government does not recognise the need for more sustainable manufacturing or the role of decentralised generation of renewable energy on sites where it can be used.
The development of renewable energy on industrial sites is being undermined. I do not understand DECC’s failure to support smaller scale decentralised generation that can deliver affordable renewable heat and power for use on manufacturing industry sites.
Industry is being urged to be more sustainable. Government incentives are a key factor for anaerobic digestion (AD) market development where payback can be a critical factor. Food and beverage manufacturers need some certainly when investing in renewables. Incentive rates impact on payback. DECC’s removal of pre-accreditation will undermine investment in on-site plants and choke the market. Doesn’t the Government want more sustainable manufacturing?
Anaerobic digestion has already been hit by too many staged decreases of the sub 250kW Feed in Tariff (FIT) rate (50% in the past 3 years compared to 15% cut for the rate above 500kW). Getting rid of pre-accreditation will require projects to proceed with no guarantees of revenue when the plant is built, which can often take 18 months for technologies like anaerobic digestion.
Our Government is viewing the success in take-up of anaerobic digestion solely on the merchant plants (that take in municipal waste) and have received the bulk of the available incentives. The FIT budget for smaller (sub 500 kW) on-site plants, similar to those recently built for Nestle and Diageo has never been sufficient. So the food and drink manufacturers industries are being thwarted in efforts to reduce their costs and go green – they will only embrace on-site renewables, including AD, if they have more certainty in predicting payback.
Are we going to have a debate in the media and in Parliament on the recent announcements, to highlight the impact on renewable energy targets and GHG emissions of slowing on-site AD development and also the impact on jobs in a range of British businesses?