10% FIT capacity wasted
New Ofgem figures – analysed by ADBA – have revealed that the Feed-in Tariff available for new 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 anaerobic digestion. An application for a plant which 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.”
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.
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 have told ADBA that of the 5.8MW cap 445kW was unused and is therefore not being carried over.
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.
