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Farmgen, the UK’s leading expert in ‘energy farming’, today warned the Government must get its review of Feed-in Tariffs for technologies other than solar PV right this time or face the consequences of a stalling industry.
Energy Minister Greg Barker says the reforms will provide greater confidence to consumers and those investing in green technologies, including anaerobic digestion (AD).
The Government has launched a consultation period that closes on April 26 and says it plans to make the tariffs more predictable.
The review includes potential tariff guarantees for wind, AD and hydro projects to give greater certainty about rates of return.
It is the latest in a number of reviews of Feed In Tariffs and follows the massive controversy over the Government’s controversial stop-start bid to cut solar power subsidies.
Farmgen – led by green energy entrepreneur Simon Rigby – plans to bring a string of farm-based AD plants on stream this year, as part of a £30 million UK expansion programme, adding to its plant already operating at Dryholme Farm, near Silloth, and other planned Cumbrian operations.
He warned that this was the Government’s “final chance” to introduce a robust, transparent and realistic scheme to support the growth and development of renewable energy technologies.
He said: “The Government’s stop-start approach and continual direction changing has done nothing to secure confidence in the future of renewable energy and has made it increasingly difficult to get investment decisions.
“This really is its final chance to get things right and to put in place measures that will bring confidence and a sense that there is a credible policy and direction from Government that is robust and will stand up to scrutiny.
“The mess it got itself into over the solar PV Feed-in Tariffs was extremely harmful to the whole of the renewable energy sector. It must not repeat the mistakes of the past.”
He added: “Only last June we had the results of a consultation and to say it was disappointing is putting it mildly.
“The Government did not act on the advice from those in the industry, advice that would significantly increase the AD sector, local businesses and renewable energy generation in this country.
“The increase in tariffs announced at that time was just too small to stimulate the AD market because the rates of return still failed to attract investors or banks.”
Feed in tariff rates for units under 250KW are 14p/kWh, but fall to 13p for those between 250KW and 500KW and 9.4p for those over 500KW.
Farmgen’s Operations Director, Hardy Radke, said: “The biggest issue from our perspective is that the proposal effectively represents a 10 per cent cut at the more than 500kw level, whereas all bands actually need an increase for farm-based AD to move forward.
“We welcome that there seems to be a slight change in the government’s position on purposely-grown crops for AD.
“For economies of scale, units of more than 500kw are more effective through technology efficiency and investment costs. However, we are being driven to run smaller plants inefficiently to get the higher Feed-in Tariff.
“What we need now is the Government to take a strategic view of the role that AD can play in both the nation’s energy mix and in the low carbon economy.
“We need to see the government committing to farm-based AD as a vital component in sustaining agriculture and reducing farming’s exposure to market price volatility.
“One of the government’s aims is to support and encourage small-scale businesses. As part of this, they need to put their action where their mouth is by supporting farmers in delivering another of their strategies – renewable energy production.”
Hardy Radke also welcomed comments by Energy Minister Greg Barker. On announcing the review, the Minister said: “We want as many people as possible to be able to benefit from the scheme. For too long it has been limited to the lucky few.”