Will the feed in Tariff review impact the biomass industry?
May, 2012
The UK government is consulting on proposed amendments to the Feed in Tariff (FiT) scheme which may have some significant implications for the biomass industry.
The Fit scheme supports energy production via anerobic digestion of biomass. Since its introduction the scheme has provided support for biomass plants generating up to 5MW. There is widespread concern however that up take has not been as high as it should have been.
In this context the recent Government proposals are potentially very disappointing. The proposal includes:-
1. freezing support for lower banding levels ie <250kw and 250-500kw
2. reducing support for plants with capacity between 500-5,000kw
3. Introduction of a process called “degression” whereby support levels reduce by a sliding scale from 2014.
If these proposals are accepted there are two major concerns. Firstly the continuing squeeze on support further undermines an industry at a time when encouragement is required. Secondly there is a concern that producers, to ensure that they qualify for higher tariffs, reduce capacity levels artificially even though feedstock is available to generate more energy.
ADF Insurance arranges insurance for Biomass plant of all types covering both the installation and operational phases. This is a specialist field, so it pays to make sure you have good advice from a specialist biomass insurance broker like us.. For more information please do not hesitate to contact me.
