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Plant Life | Tariffs and Incentives - Why It's Time to Act on

Biogas
Act now to take advantage of financial incentives that encourage the installation of biogas plant to
generate your own renewable energy.

In energy-intensive manufacturing, such as the food and drink industry, energy and facility managers are always
looking for compelling ways to reduce energy costs and their carbon footprint.
Importantly, now really is the time to act if you want to receive optimal financial benefits.
Thats because the UK government has introduced time-limited financial incentives to encourage the use of lowcarbon renewable energy generation, as well as non-fossil fuel for road transport. In other words, if you are
looking to optimise income from these incentives then time is of the essence.

How to install biogas plant for renewable energy from anaerobic digestion
A revenue-boosting method of generating your own renewable energy is via anaerobic digestion. This is the
controlled breakdown of organic matter in a closed digester vessel. The air supply is restricted to stimulate
anaerobic decomposition (unlike composting, which takes place in the presence of air). This process of
decomposition, accelerated in the presence of bacteria, producing a methane-rich biogas which can then be
turned into heat and electricity via a Combined Heat and Power (CHP) unit. Biogas can also be upgraded to
biomethane which can be injected into the natural gas grid or used as transport fuel.

Energy reduction targets by 2020

The UK government has made a commitment to meet challenging EU energy reduction targets:

1.

EU Renewable Energy

15% of UK energy from renewable sources

10% of energy used in transport from renewable
sources

2.

EU Landfill Directive

3.

Food and Drink Federation

35% reduction in biodegradable waste sent to

landfill

35% reduction in CO2 emissions

The UK government is aiming for an 80% reduction in greenhouse gas emissions by 2050. The Energy Savings
Opportunity Scheme (ESOS) also requires large businesses to identify energy reduction measures under
mandatory energy efficiency audits.

The benefits from financial incentives

Feed-in Tariffs (FiTs) , the Renewable Heat Incentive (RHI) and Renewable Obligation Certificates
(ROCs) complement renewable energy savings with valuable revenue streams. The FiT and RHI tariffs present a
fixed income for the life of the installation, based on the rate at time of construction. However, these tariffs are
subject to a biannual degression which can affect new projects.
For electrical generation between 50kW and 5MW, select the best income from either FiTs or ROCs.
Feed-in Tariffs (FiTs) guaranteed income for renewable electricity over 20 years.
Anaerobic digestion total installed capacity

Income (p/kWh)

<250kW

10.13

250kW 500kW

9.36

>500kW

8.68

Electricity exported to the grid can receive a minimum 4.85p/kWh but its negotiable with the electricity supplier.
Important: farmers should act as early as possible to qualify for the best offer. That is because the degression
process will reduce the financial benefits according to the rate of take up of the incentive by early adopters.
Renewable Obligation Certificates (ROCs) tradeable certificates for renewable electricity generation (rates
vary with market forces). An anaerobic digester is eligible for 1.9 ROCs/MWh currently 9.6p/kWh.
Renewable Heat Incentive (RHI) fixed income for renewable heat for 20 years.
Biogas combustion thermal output capacity

Income (p/kWh)

<200kW

7.5

200kW 600kW

5.9

>600kW

2.2

Biomethane injection to grid (BtG)

7.5

Road Transport Fuel Certificates (RTFCs) tradeable certificates for biomethane fuel. 1.9 RTFCs per kg fuel

supplied currently 7.5p/kg.

Time to act
Locking in to these tariffs to negate degression makes it essential to act in a timely manner it may take a year
to plan and install biogas plant. Pre-accreditation lock in is possible, but this will depend on successful planning
approval and an agreed electricity connection (which can take three to four months).
According to Deloitte, landfill tax increased by 2.60 per tonne in April 2015, raising the cost for those businesses
sending their process food waste to landfill. Also, from 1 April 2016 the standard and lower rates of landfill tax will
increase in line with the Retail Price Index, rounded to the nearest 5 pence.
Longevity of the schemes may also be subject to changing government policies unless youre locked in!

Takeaways:
Using low-carbon and renewable energy can provide additional financial income.
Tariffs (FiTs, ROCs and RHI) complement energy savings with guaranteed revenue streams.
Time is of the essence if you want to receive optimal financial benefits.

Discover more about how to install biogas plant dont miss out on available
tariffs and incentives: download our free eGuide: An Introduction to Biogas for
the Energy Manager

Clare Burns
Clare Burns is a technical marketer with many years experience in the energy arena, as well
as in fashion, telecoms and education. Fluent in 3 languages, Clare has worked across
Europe. She currently works for ENER-G, a UK manufacturer of carbon reducing, energy
efficient products exporting its cogeneration technology across the globe.