10% FIT Capacity For Anaerobic Digestion “Wasted”

AD-siteNew Ofgem figures – analysed by The Anaerobic Digestion and Bioresources Association (ADBA) – have revealed that the Feed-in Tariff (FIT) available for new anaerobic digestion (AD) plants could be even more heavily restricted than first thought.

The new FIT scheme has quarterly “caps” on maximum deployment for each technology, which are set at 5MW for AD. An application for a plant that breaches the cap is counted towards the next quarter – but any capacity unused is simply lost.

This is despite the government’s consultation response saying that “any unused capacity for a particular technology and degression band from one quarter simply gets added on to the next quarter.”

ADBA – Not rolling over unused capacity from one tariff period to the next is salt in the wound and a shocking waste of MWs worth of renewable electricity which DECC has already accounted for”

On 13 May, Ofgem released data on the FIT deployment indicative queue, which shows the level of FIT capacity the scheme is likely to waste in the second, third and fourth quarters of 2016.

Although these figures and application places in the queue may alter if any applicants withdraw their plants, at present more than 2.38MW of the FIT’s total installed capacity is due to be lost. This is over 10% of the year’s allocation for AD.

According to ADBA, tariff period two has 1024kW wasted capacity, tariff period three 424kW, and tariff period four 487kW. Ofgem did not release data for tariff period one but told ADBA that of the 5.8MW cap 445kW was unused and is therefore not being carried over.

Unused Capacity

When the second FIT tariff period began on 1 April 2016 ADBA asked Ofgem how its weekly update reports would include an adjusted cap limit to reflect the capacity from tariff period one that was unused, because an application had breached the cap and was therefore queued for the next quarter.

For example, if the 5th application in tariff period one brought the total capacity applied for to 5.2MW and the 6th application was for a 1MW plant, the application would be the first queued for tariff period two. There would be, in this example, 600kW of unused capacity from tariff period one.

In correspondence with ADBA, Ofgem clarified that according to their understanding of the FIT Order there are three distinct types of unused capacity:

  • Unused capacity carried over: Capacity left over because a cap has not been filled. E.g. a cap with capacity for 500 only has 10 installations totalling 400. In this case the extra capacity (500-400) is added to the capacity for the next tariff period.
  • Unused capacity not carried over: Capacity left over because of the remainder between the cumulative capacity when the last installation within the TP applies and the total cap size.
  • Unused capacity not carried over: Capacity resulting from installations that cancel after a cap has been reached.

Charlotte Morton, ADBA’s Chief Executive, commented: “The FIT deployment cap of 20MW per year for AD is already constraining much needed baseload capacity, failing to recognise our industry’s ambition. Not rolling over unused capacity from one tariff period to the next is salt in the wound and a shocking waste of MWs worth of renewable electricity which DECC has already accounted for.

“The figures released by Ofgem show the scale of wasted capacity but future quarters could see far more MW of wasted potential. We are calling for DECC to urgently review this situation.”

ADBA has written to DECC to raise the impact this interpretation of the FIT regulations, and seek a resolution, which will allow the industry to continue to develop at least at up to the 20MW cap.

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