Renewables opportunities remain after support shake-up

Despite big changes to renewable energy support there are still opportunities for poultry producers under the revised subsidy regimes. 

The past few months have seen a raft of changes to renewable energy support, many of which come into effect this year.

Payments for renewable electricity and heat have been cut across several technologies, and tighter budgetary caps introduced in a political bid to ensure all schemes deliver better value for money.

Inevitably this means lower financial returns and, with further cuts (“degression”) to come, there is even greater emphasis on designing renewables projects around displacing as much bought-in energy as possible, rather than relying on support payments and exporting energy to the grid.

See also: Farmers Weekly Academy on renewable energy

Poultry producers using large amounts of heat and/or electricity could therefore still find energy projects stack up well, even with reduced government support, says Matthew Evans, technical director at TGE Group.

Projects must be planned carefully to maximise on-site energy use, with more focus on the integration of different renewable technologies and energy efficiency measures.

Solar PV and heat pumps, for example, complement each other well on poultry units and can be combined with ventilation systems, and temperature and humidity sensors to deliver efficient heating and cooling.

Returns of more than 10% are still possible for solar PV under the new Feed-in Tariff (Fits) regime where all electricity can be used on site, while some heat pump systems can pay for themselves within four or five years due to a reasonably attractive Renewable Heat Incentive (RHI), says Mr Evans.

Heat pumps offer a number of other advantages over biomass heating systems, such as removing the need for regular fuel deliveries, plus lower service and maintenance requirements, he adds.

Returns for new renewables projects could be helped by further falls in installation costs, with Mr Evans suggesting a 5-10% drop in solar PV costs is possible over the next three to four months. Heat pump costs could also decrease as uptake increases.

Renewable heat support

Despite fears renewable heat support could be scrapped, there is now a more positive outlook after the government announced last autumn it would continue funding the RHI (see table 1), increasing the budget to £1.15bn over the next five years.

However, some uncertainty remains as there is still no detail on what proposed “cost-saving” reforms to the scheme mean in practice.

Proposed budgetary caps could see the scheme close to new applicants as soon as thresholds are exceeded, but clarification of the detail is yet to be published.

Installations using biomass or biogas fuels must also now comply with legislation introduced last year that requires RHI claimants to use sustainable fuel.

Those buying fuel can comply by using a supplier on the official Biomass Suppliers Sustainability List, while those with installations under 1MWth using their own wood must register as a self-supplier on the list.

Table 1. RHI tariffs from 1 January 2016

Feed-in Tariff support

The government published its long-awaited consultation response to proposed changes to Fits just before Christmas, ending months of speculation about future support for small-scale renewables and fears the scheme could be scrapped altogether.

Although support has been cut and will continue to be reduced through ongoing degression, the new tariff rates are not as low as originally proposed (see table 2).

The government is targeting a 4.8% rate of return for solar, 5.9% for wind, and 9.2% for hydro, although exact returns will vary depending on individual site characteristics and energy consumption.

There was a brief suspension of the Fits scheme in mid-January before being relaunched with new deployment caps and tariffs set to apply from 8 February 2016.

Any installations that commissioned and applied for Fits during that period are in the queue for the new scheme funding.

Once the quarterly budget cap has been allocated, any further applications during that quarter will be frozen and put in a queue for the next quarter, so it is worth monitoring deployment rates published by Ofgem if planning a new project.

The Department of Energy and Climate Change says the scheme remains “under review” to ensure objectives are met and it stays within budget until generation tariffs end in 2019.

Pre-accreditation, which was scrapped last year, will also be re-introduced from 8 February, allowing project developers to lock into support before committing significant funding.

As before, it will be available for solar and wind projects of over 50kW, and for all anaerobic digestion and hydro projects.

Pre-accreditation will be valid for six months for PV; one year for wind and AD; and two years for hydro.

Table 2 – New Fits generation tariffs

Renewable energy at the Pig & Poultry Fair

Poultry producers looking to cut energy costs on farm will find a wealth of advice, technology and solutions at the Pig & Poultry Fair 2016.

The new Energy Zone at the Fair will provide a hub for biomass, combined heat and power, anaerobic digestion, wind and photovoltaic panel solutions.

Hosting over 30 exhibitors showcasing the latest technology, the Fair is an ideal opportunity to speak to the experts face to face and compare energy options which could work for you.

“At the Pig & Poultry Fair we constantly strive to provide the answers producers are looking for to help improve performance,” says Alice Bell of the Fair organising team.

“We know that renewable energy is one of the ways that leading producers are improving their margins and would encourage anyone considering an energy investment to come along and explore the possibilities.”

The Fair takes place on 10 and 11 May 2016 at the National Agricultural and Exhibition Centre (NAEC) Stoneleigh. Register now for your free ticket