The Green Gas Support Scheme
Like in other countries the UK has an incentive to promote the production of renewable green gas, currently we know this incentive as the RHI (Renewable Heat Incentive). This is soon to take a different name under new reforms coming March 2021. The Green Gas Support Scheme (GGSS) is an incentive to increase the proportion of green gas in the National Gas grid, like the RHI. It supports the production of biomethane and biomethane injection in the grid.
RHI-WHY?
Why change the RHI again? What does the introduction of the Green Gas Support Scheme entail for the biogas industry and what can project owners expect from it?
First things first, it was announced by the Department of Business, Energy & Industrial Strategy (BEIS) in the UK, that changes are made in the deadline for projects that do not qualify for a rate guarantee. The six-month extension is to better accommodate for delays caused by COVID-19 and includes projects of 600 kWth and under. The application, however, will require projects to provide evidence that they were in development prior to the extension notice.
In the past payments made to small and medium biogas systems are divided into Tier 1 and Tier 2, while systems that produce biomethane are categorized as Tier 3. Allegedly the Green Gas Support Scheme will also be a tariff-based procedure and therefor can be compared with the RHI currently supporting the production of biomethane. The GGSS will replace the RHI when it ends in March 2021. The rate of the tariff is differentiated to reflect the production costs of biomethane on different scales. Current data shows that over 90% of biomethane is produced under 1, for plants that have been commissioned since tiering was introduced. Industry feedback is that the current tiering structure reduces the likelihood of economies of scale and deployment of large-scale biomethane AD plants.
The Green Gas Support Scheme dedicated to the production of biomethane
The Green Gas Support Scheme is introduced and is solely dedicated to the production of biomethane, different from its predecessor. The GGSS is expected to run for 4 years and will only support biomethane that is produced from biomass feedstocks that are processed through anaerobic digestion and injected into the national gas grid (virtual pipeline article). In the future other gasses might also het support but the it is reported that UK Government is currently working on the options for supporting low carbon production and will possibly update the industry on this later in 2020.
BEIS proposes to maintain a tiered tariff. Producers receive the highest payments for the first specific amount and the lower payments for the subsequent lower amounts of biomethane injected into the grid. It also proposes to increase the amount of Tier 1 biomethane from 40,000MWh to 60,000MWh, this means an increase of the amount of gas attracting the highest level of tariff payment.
Unlike the RHI the GGSS will be financed by a Green Gas Levy and will be added on to customers’ energy bills.
The proposed tariff amount under the scheme is:
Green gas Support Scheme
- Tier 1: 4.9-5.5 p/kWh
- Tier 2: 3.25-3.75 p/kWh
- Tier 3: 1.5-2.75 p/kWh
DMT Support – Total Solutions Provider