British biogas is not taking off as fast as some in the industry had hoped – and the government stands accused of stunting its growth.
As part of wider changes to its sustainable energy plans, the Department for Energy and Climate Change (DECC) launched a snap consultation over its subsidies for biogas plants at the end of May. "When we first introduced the 'one size fits all' [tariff] in November 2011 there were no full-scale biomethane-to-grid plants in operation," it said. Since then, DECC claims, plants supplying more than two megawatts have been over-compensated for their efforts.
Elsewhere, the department has proposed the introduction of a banding system for the biogas industry, introducing different payments for different types of biogas plant, all of which could hit investment into the growing bio-energy sector.
Industry leaders are worried. "The pace and depth of the changes are concerning," says Dr Nina Skorupska, chief executive of the Renewable Energy Association. "The industry is going to have to work fast to ensure these proposals help rather than hinder the sustainable growth of the UK green gas industry."
It's a complex issue and one that exposes problems underlying the sector's sudden growth. Since 2011, the number of biogas plants has doubled to 109, with the National Farmers Union (NFU) recommending that 1,000 be built by 2020. Many environmentalists are happy that the UK is making progress towards the government's commitment to providing 15% of the UK's energy from renewable sources. But others are anxious about the impact this rapid development is having on agriculture and the environment.
It's not just government incentives that have proved a catalyst for biogas expansion; another factor has been the success of intensive arable farming. Harnessing the latent energy in decaying organic waste, many biogas plants use so-called "energy crops" such as maize in their processes, since they produce a higher energy yield. But their cultivation also causes soil erosion, and they produce higher carbon emissions than other organic waste. The Farmer's Guardian claims that maize grown for use in producing biogas energy has trebled to 15,000 hectares farmed in the past two years, and is likely to rise to 25,000 hectares next year.
Some are critical of government regulations that exempt maize from practices, such as crop rotation, that limit damage to soil. Friends of the Earth campaigner Kenneth Richter believes the government needs to change its policy. "Maize use should not be encouraged through an exemption in post-harvest soil management under the cross compliance rules," he says. "Farmers must therefore not be subsidised for feeding biogas plants with feedstock like maize either.".
In Europe, 50% of biogas product comes from energy crops, and this has resulted in a rise in food prices for consumers.
One argument in favour of cuts to biogas subsidies is they may coerce some smaller producers into exclusively using organic waste material for biogas plants, since it has a lower energy yield, meaning their business can benefit from favorable tariffs. But Richard Lowes, a green energy researcher at Exeter University, is not convinced. "The idea of having a lower tariff for bigger projects is sensible. However, accessing a constant supply of organic waste is very difficult since there is no national policy to make councils collect it. From a practical point of view, energy crops mixed with feedstock are useful because they give it better consistency. Therefore, if you remove it completely you could harm the [biogas] industry."
Alon Laniado, manager of Eternity Capital, opened a £9.6m biogas site in Cornwall in March that runs on mixed feedstock. "Organic waste is just too difficult to get long-term contracts for," he says. "Another problem with DECC's proposals is that they've assumed that we're already using 100% organic waste and that the gate fees we charge people for disposing their waste have been increasing. In fact, the opposite is true." He feels that using a small percentage of energy crops is necessary. "It supports farmers and ultimately energy crops are merely one reaction to rising energy prices."
Laniado's site is now under threat, since it was built on the assumption that current biogas tarriffs would remain in place. "The problem is that the government can effectively change its criteria when it wants," he says.
DECC has also proposed introducing a sustainable energy criteria for biogas later this year, which will require a 60% saving on the EU fossil fuel average – a stipulation that will do little to tackle the problem of the UK's increasing reliance on energy crops.
While businesses can do more to recognise their impact on the environment, it is down to the government to legislate against harmful practices while continuing to encourage greener methods of energy production. These complex decisions will dictate the future and the success of the British biogas sector.
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