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REA welcomes Minister’s clarifications and reassurances on green gas policy changes

Letter to trade associations “takes the sting out” of biomethane consultation.

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The REA welcomes reassurances from Energy Minister Greg Barker that DECC is not seeking to curtail the expansion of the UK’s fledgling green gas industry.

The ‘RHI biomethane injection to grid tariff review’ (which closed to responses on 27th June) seeks to reduce the level of support for new biomethane injection (“green gas”) projects following representations from industry that some larger plants might be over-rewarded, increasing costs for taxpayers. Industry welcomed DECC’s early intervention before the issue got out of hand, but was deeply concerned by some of the options laid out in the consultation, which would have had disastrous impacts on future green gas projects at all scales.

A response to a recent letter to the Minister from the REA and ADBA confirms that these were just “illustrative tariff scenarios” and that “final decisions on tariff levels will be taken in light of the consultation responses”. The letter also makes clear:

  • that the data on gate fees (the money a biogas plant makes from taking in food waste collections) underpinning these scenarios is not sufficiently robust;
  • that “changes to the biomethane to grid tariff will not take effect before 1 December 2014”;
  • and that DECC will “update industry on [its] emerging thinking at appropriate points during the review process”.

DECC has this week published a consultation update on its website confirming the details set out in the Minister’s letter. Welcoming this clarity from the Minister, REA Chief Executive Dr Nina Skorupska said:

“Home-grown green gas keeps food waste out of landfill, improves our energy security, reduces damage to the climate and strengthens rural economies, yet it looked for all the world as if DECC was about to pull the rug out from under this fledgling industry after bringing forward just a handful of projects. The Minister’s clarifications take the sting out of this consultation and are very welcome indeed.

“It’s important to keep the lines of communication open between Government and industry, and in fairness DECC’s stakeholder engagement since publishing the consultation has been very good. The recent one-to-one surgeries with biomethane developers should ensure that officials get the evidence they need to make the right decisions and sustain cost-effective growth in the industry.”

The biogas trade associations will continue to engage with Government and other stakeholders to minimise the risk this tariff review poses to future green gas projects, especially those projects that have already secured investment but will not complete before the 1 December deadline.

Encouragingly, the Minister closes his letter by committing to work with the REA and ADBA “to ensure we reach an outcome that secures a bright and sustainable future for the biomethane to grid industry”.


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