United Kingdom

Support schemes

The UK implemented several measures to increase renewables deployment. Attractive financial incentive schemes are provided for biogas production through the following schemes: Renewable Heat Incentive (RHI); Feed in Tariff (FIT); Renewables Obligation (RO); Renewable Transport Fuel Obligation (RTFO); and, Levy Exemption on the Climate Change Levy 

Direct subsidies

Green electricity tariffs biomethane taken from gas grid

The Renewable Heat Incentive (RHI) was introduced in 2011 with a total budget of 860 million GBP in order to promote the delivery of renewable heat at all scales and to stimulate this new market. Biogenic gases from AD, sewage (but not from landfill) and gasification/Bio-SNG are supported under the RHI regime with biomethane facilities commissioned on or after 15th of April 2009 enjoying a premium of about 7.3 pence per injected kilowatt hour which is paid on top of the gas price. The tariffs are fixed for a total of 20 years and increases with inflation.

Since April 2010 Feed-in Tariffs (FITs) have provided financial support for small scale low carbon electricity installations of up to 5 MW. FITs for electricity generated from biogas receive from 9 to 13 pence per kilowatt hour (depends on plant size) are paid on top of the average electricity price. The tariffs are grandfathered for 15 years and increase with inflation.

Scale

Type / Rate

Anaerobic digestion

≤250kW

15.16

Anaerobic digestion

>250kW - 500kW

14.02

Anaerobic digestion

>500kW

9.24


Renewable Obligation (RO) requires UK electricity suppliers to source a specified percentage of renewable electricity which increases year by year. The scheme is administered by OFGEM and is based on tradable certificates called Renewable Obligation Certificates (ROCs). Depending on the source of the renewable energy a defined number of ROCs is awarded per generated MWh. This scheme is the main financial support for larger scale renewable energy projects (> 5 MW). 

For Transport, Renewable Transport Fuel Certificates (RTFC) are received from biomethane (only if directly used in a vehicle , eg as Compressed Biomethane). These are worth around 20 p/kg which equates to around 1.4 p/kWh and hence this option not attractive compared to grid injection. If the feedstock is waste then each KG of biomethane earns 2 x RTFCs. The RTFCS are priced according to supply/demand for such certificates as the diesel/petrol suppliers have to use a certain proportion of bio-ethanol/biodiesel/biomethane

There is no biomethane from AD in the UK that earns RTFCs.

Indirect subsidies

 

Tax exemptions or reliefs

CHP generation from eligible renewable resources such as biogas or biomethane is exempt from the Climate Change Levy and can generate CHP Levy Exemption Certificates (LECs) which have some value

Reduced grid related costs

A modification is going through the GB Uniform Network Code to give a small rebate on gas transportation charges to biomethane shippers.