Farmers operating anaerobic digestion plants can now viably maximise biomethane production by claiming two payments at the same time.
Farmers can now benefit from the highest Renewable Heat Incentive (RHI) tariff and “top up” with additional Renewable Transport Fuel Obligation (RTFO) payments.
The payments are part of a Government incentivised policy for decarbonising the transport sector.
Up until recently, biomethane producers have generally either injected gas into the grid to receive RHI payments or they supply the transport sector and claim Renewable Transport Fuel Certificates (RTFCs). Combining the two historically hasn’t been done.
Under the UK Government’s RHI scheme, farmers can receive quarterly cash payments over seven years if they install or have already installed an eligible renewable heating technology.
Since tariff levels were reinstated in May this year, the RHI alone has been lucrative enough. However, with a degression likely at the start of January, and the budget for RHI tariff guarantees becoming tight, it’s likely to be more financially viable to claim both.
According to Lucy Hopwood, of bioenergy experts the NNFCC, farmers not pushing to maximise biomethane production beyond the Tier one tariff break (40,000MWh per year) may benefit significantly from this new development.
“Farmers could in theory double production, claiming RHI for half of their output and RTFCs for the other half,” she said.
“There is also an opportunity to double the number of certificates awarded for each unit of gas if biomethane is generated from agricultural waste.
“It’s also useful to underline that feedstock restrictions were introduced in May 2018 to new plants claiming RHI and FITs, and support can only be received where greater than 50% of biogas outputs are from waste or residues,” Ms Hopwood added.
