Heat and energy from waste operators – which subsidy? article banner image

Electricity market reform has brought some uncertainty for renewable operators about the new subsidy schemes and which scheme to apply for, particularly those in the energy and heat from waste sector.

Contracts for Difference (CFD) are expected to open for applications in October and will be administered by the National Grid and the Low Carbon Contracts Company (LCCC).
Operators in the heat and energy from waste sector may be able to apply for funding from both Contracts for Difference and the Renewable Heat Incentive. This will depend on the technology that they use.

The arrangements for receiving Contracts for Difference and the Renewable Heat Incentive are different for energy from waste, with combined heat and power. Such operators may apply for either scheme, but not both. This is because Contracts for Difference strike prices for energy from waste have been set to include both the power and heat component.

Other combined heat and power technologies (CHP) – including geothermal with CHP, biomass with CHP, anaerobic digestion with CHP and advanced conversion technologies with CHP – are eligible for funding under Contracts for Difference and the Renewable Heat Incentive. This is justified by the fact that the strike price under Contracts for Difference was based on power-only and therefore also needs to allow for funding to apply to the supply of the heat component.

The renewable energy team at Stephens Scown has experience in dealing with contracts for these technologies and the complications surrounding applications for funding with Ofgem. Please speak to our experienced renewable energy lawyers if you need assistance.

Sonya Bedford is a partner and head of renewable energy at Stephens Scown LLP in Exeter. She is a non-executive director of Regen SW and a director of Exeter Community Energy. To contact Sonya please call 01392 210700 or email renewables@stephens-scown.co.uk