Press release - 20th April 2016, York. NNFCC have published their 3rd annual report on ‘Anaerobic Digestion (AD) Deployment in the United Kingdom’. The report is available to buy either outright or as part of a business support package. Our AD deployment reports have been very well received by the AD industry as it uniquely gives an accurate and detailed picture of the pipeline of AD projects throughout all regions of the UK. Containing a comprehensive breakdown of feedstock requirements, installed capacity and output type for each project, it also provides estimated cropping area required in the UK. We track projects from the first public announcement through to operation, to provide up-to-date information about the current and future market landscape of the AD sector.
Over the last year, there has been notable progress in plant construction - over 130 new projects have come online, increasing the total number of operational AD plants in the UK to 316. The rapid increase was caused not only by market maturity but also fear that the main policy support mechanisms, the Feed-in-Tariffs (FITs) and the Renewable Heat Incentive (RHI), were facing imminent changes or potential closure. Many developers rushed to get plants accepted onto incentive schemes before changes could be implemented. Meanwhile, because of the short-term policy cycle and threats of scheme closure, project initiation has slowed, with just over 100 AD projects entering planning over the past year in contrast to around 200 the year before.
Having now seen proposed and agreed changes for the coming year in recent consultations, and with changes ranging from favourable to devastating, we expect to see continued growth for the next couple of years in the UK before the attractiveness of the development landscape falls, potentially below economic levels. The cost-control mechanisms introduced to the FITs scheme and proposed for RHI combined with deployment caps and triggers for early scheme closure are driving many developers to look outside of their core business interests or even worse, outside of the UK.
Whether this decline will be terminal depends on whether the continued cost reductions experienced by the industry and increased investor confidence in the technology will be sufficient to offset the reduced incentives, increased policy uncertainty and growing competition for waste feedstock. In addition to challenges around accessing waste feedstock, proposals in the current RHI consultation to cap or remove support for biogas derived from crop feedstocks leaves developers wondering where the focus should be.
Lucy Hopwood, lead consultant for Bioenergy and Anaerobic Digestion at NNFCC said, “The past year has been an exciting but extremely frustrating one for the AD industry. We have seen a maturing industry demonstrate how quickly it can grow whilst under immense pressure. Growth in the biomethane sector has been astounding at a time policy uncertainty has been at its peak. Proposals suggest Government remains supportive of the industry in principal but unfortunately this does not always transpire in practice. We remain hopeful about the coming year but beyond 2017 the development landscape remains questionable with the risk that under the new degression mechanisms the industry could be a victim of its own success.”
Where to access the report
The report is available to buy on the NNFCC website, either outright or as part of a business support package. Anyone who buys the April 2016 report will receive a 6 month update report in October 2016 at no additional cost. For further information please contact Lucy Hopwood, our Lead Consultant for Bioenergy and AD - l.hopwood@nnfcc.co.uk
Sustainability guidance from NNFCC
Whilst tracking the market landscape, NNFCC have been helping AD and bioenergy clients understand what new policies mean for their business and how to strengthen their supply chain, to be resilient to increasingly stringent sustainability policy. We have developed a user friendly carbon calculator for biogas and biomethane producers to demonstrate compliance with sustainability criteria, for RHI or RO (in line with policy guidance), and potentially also FITs in the future.
NNFCC’s Biomethane & Biogas Carbon Calculator deals with the complexities of multiple feedstocks, is excel based and flexible with units, making it easy to use, robust and transparent. It also graphically highlights clearly where weaknesses lie in supply chains and where to focus efforts on reducing emissions, to comply with regulation. Access options for the Biomethane and Biogas Carbon Calculator can be found here.
More information, please contact:
Lucy Hopwood
Lead Consultant – Bioenergy & Anaerobic Digestion
Tel:+44 (0)1904 435182
l.hopwood@nnfcc.co.uk