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Urgent action needed to save ‘shovel-ready’ green heat projects – Foodchains

UK biogas businesses are urging Kwasi Kwarteng MP, Minister for Business, Energy and Clean Growth, to include all eligible renewable heat projects in the COVID-19 Extension of the Non-Domestic Renewable Heat Incentive (RHI), announced in the March 2020 Budget. This omission of sub-600kW biogas projects could according to agri-food innovation advisors Foodchains, result in the loss of a number of green heat investments on-farm and factory sites, including creameries and vegetable processing.

An existing on-site biogas plant in Bedfordshire converts bio-residues into on-site bioenergy (photo courtesy Foodchains).

As in other construction sectors, the coronavirus (COVID-19) pandemic has caused delays to renewable energy projects. The Department of Business, Energy, and Industrial Strategy (BEIS) responded by extending the RHI completion deadline by 12 months. However, cost-effective biogas projects originally included in the RHI have now been excluded.

Risk losing ‘shovel-ready’ renewable energy projects

According to agri-food innovation advisors Foodchains, this deliberate omission of sub-600kW biogas projects could result in the loss of a number of “exciting green heat investments” on-farm and factory sites, including creameries and vegetable processing plants.

Commercially viable low carbon, shovel-ready projects that fall below the Non-Domestic RHI Tariff Guarantee threshold (600kW thermal for biogas) have been hit by COVID-19-related planning delays, supply issues and visit restrictions. This unfair exclusion means that a number of clean heat projects, with insufficient time to complete by 31st March 2021, could be abandoned, said Richard Gueterbock, Director of Foodchains and a promoter of on-site bioenergy.

New projects, accounting for around 20 MW of renewable heat capacity on farms and factory sites, may be at risk. The Renewable Energy Association (REA) estimates that these include up to 30 biogas developments, each worth between GBP2 – 4 million (≈ EUR 2.21 – 4.42 million), and a similar number of biomass and ground source heat pump projects.

In its response the Notice on Changes to RHI Support and COVID-19 Response, the REA R put forward specific proposals to support smaller renewable heat projects:

  • Allow RHI pre-accreditation for all bioenergy plants with planning permission pre-30th Sept 2020;
  • BEIS should release the current underspend in the RHI budget, making it available for a further twelve months, extending the RHI deadline until the new heat support schemes are introduced.

In recent correspondence, BEIS Energy Minster, Kwasi Kwarteng had said that no decisions had yet been made regarding any potential longer-term support for biogas and that BEIS officials were “continuing to consider further policy options in response to Covid-19 related delays and will make any separate announcements in due course.”

RHI essential for innovation

Foodchains point out that green investments in processing sites will decarbonise the supply chain while boosting local economies, creating green jobs, and new skills. But capital costs, complex technology, and development risks for industrial decarbonisation cannot be carried by business alone.

In this regard, the RHI is “essential” for innovation in the supply of low carbon industrial heat at the required scale and pace. Existing biogas plants on food processing sites have benefited from the RHI and biogas has reduced carbon emissions by at least 30 percent on some sites.

Losing cost-effective industrial projects will undermine UK reduction targets and delay the transition to renewable energy. During the COVID pandemic, there was a significant but temporary decline in atmospheric emissions across Europe. For this reason, industrial renewable heat projects must be part of the Government’s ambition to ‘build back better’. We need the Energy Minister to take urgent action to reverse the unfair exclusion of smaller projects from the RHI Covid-19 Extension. Without green investments such as these projects, there will be a gaping hole in Government plans for Carbon Net Zero, which would be hugely embarrassing, as the UK is hosting the COP 26 Global Climate Change Conference at the end of 2021, said Richard Gueterbock

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