Financial Viability

Well designed AD plants will be extremely profitable; hence maximising revenue is vital. The tariff/subsidy levels quoted below are obviously currently correct but these do change and so need to be checked at the date of an enquiry. 

1 TARIFFS

ELECTRICITY: Feed in Tariff: (for AD plants up to 5MWH) or ROCS

The FiT is currently 15.02p and 14.02p per kwh up to 250 kwh and between 250-500 kwh respectively. Plants over 500kwh will continue to receive 9.24p per kwh (equivalent to 2 ROCS).

It is proposed that these levels will be kept until April 2014, when they will start to digress, at set rates each year. However, the digressions may be brought forward if the industry reaches proposed "capacity triggers" of 56MW installed capacity by 2014 and 75MW by 2015. This is now almost certain to happen.

All AD plants over 50kwh can elect to receive ROCS which are set at 2 ROCS.

HEAT: Renewable Heat Incentive

The RHI is available for AD plants where the heat exchanger is 200kwh or below and all heat which is used in a bone fide and qualifying way receives 7.1p per kwh. It is expected that the 200 kwh limit will be raised in 2014.

The RHI is also available to Biomethane (with no upper limit) at 7.1p per kwh.

2 EXPORT

In addition to the generation tariff the owner is able to sell or use the resultant electricity or heat.

Electricity

The large electricity companies are obliged to buy the electricity at 3.2p per kwh but it is possible to sell it to a green electricity company at circa 5p per kwh. Additionally if the owner is using electricity on site it is likely that it will cost 10p per kwh and so it makes economic sense to use their own supply. If the AD plant is located next to large commercial electricity users they would be probably interested in buying the AD plant's electricity at, say, 8p per kwh.

Heat

In order to qualify for the RHi all non parasitic heat must, in a qualifying manner, either be used on site or sold to neighbouring occupiers which will be negotiated directly.

From all perspectives the methane sourced from the available feedstock must be maximised. Selecting the feedstock and its combination is vital; generally Nethy Energy advise using on farm waste such as slurry/manure as well as purpose grown crops.  Once the feedstock has been chosen there are matters which will improve the output.

  • Harvest:
    The purpose grown crops have to be harvested when the crops yield the maximum biogas.
  • Storage:
    Anaerobic digestion is the digestion of the feedstock in an environment where oxygen is excluded. It is preferable where possible to minimise the storage time however before the feedstock is fed into the digester it is necessary for it to be stored in a way that reduces its exposure t oxygen.
  • Energy Requirement of the AD Plant:
    All plants need heat and electricity to function (called parasitic use). However they should be designed to minimise this use, for example by proper insulation of the digester, so that the maximum output can be exported.
  • CHP:
    There is a trade off between the most efficient CHP, the cost of spare parts, the availability of spare parts, the time required for maintenance and, of course, the price.
  • Digestate/ fertiliser:  
    As a rule of thumb, the feedstock reduces in volume by 20% during the digestion process. After the process is complete the whole digestate can be separated into liquid and fibre. These have different characteristics but the liquid in particular is a valuable fertiliser which will dramatically reduce the need for artificial nitrogen purchases. The fibre can be further treated and sold probably as a compost /soil conditioner.