Overview of biomethane markets and regulations ... - Green Gas Grids

n Feed-in tariffs
n Renewable Transport Fuel Obligation
n Levy Exemption from Climate Change Levy
The support schemes differ slightly between England and Wales, Scotland and
Northern Ireland.
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 (BioSNG) are supported under the RHI regime with
biomethane facilities commissioned on or after 15 th of April 2009 enjoying a
premium of about 6.8 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 increase with inflation.
The 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).
Since April 2010 feed-in tariffs (FITs) have provided financial support for smallscale
low carbon electricity installations of up to 5 MW. FITs for electricity
generated from biogas receive from 9.4 to 14 pence per kilowatt-hour (depending
on plant size) and are paid over the wholesale electricity price, as a premium. The
tariffs are grandfathered for 20 years and increase with inflation. As both are
support mechanisms for electricity generation, FIT and ROCs cannot be combined.
However, the RHI is compatible with either the FIT or the ROC as it is a support
mechanism for renewable heat. FIT and RHI cannot be used if capital grants are
obtained.
The Renewable Transport Fuel Obligation (RTFO) places an obligation on suppliers
of fossil fuels to ensure that a specified percentage of the road fuels they supply in
the UK is made up of renewable fuels. Biomethane is eligible for Renewable
Transport Fuel Certificates provided that it is produced wholly from biomass. The
RTFO scheme is not as attractive as RHI.
CHP generation from eligible renewable resources such as biogas or biomethane are
exempt from the Climate Change Levy and can generate CHP Levy Exemption
Certificates (LECs) which have some value.
Sustainability criteria for biogas to electricity are expected for 2014. The criteria will
be subject to financial support and require minimum CO2 savings of 60 %.
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