Financial incentives

The government incentive schemes are designed to support the deployment of renewable energy generation in the UK, allowing producers to compete with fossil fuel generated technologies which may be cheaper in the short term. Renewable energy is essential if Britain is to meet its binding climate change targets – to deliver 15% of all energy from renewable sources by 2020 and to reduce greenhouse gas emissions by 80% by 2050 (relative to 1990 levels). Oxford research has shown that the negative impact that spikes in global oil, gas and coal prices have on the UK could be reduced by over 50% in 2050 by increasing deployment of renewable energy.

Biogas is innately flexible - it can be used to generate heat or power, or upgraded to biomethane where it can be stored in the national grid or used as a transport fuel. AD can be supported by a number of incentive schemes depending on how the biogas is used– the FIT for electricity generation, RHI for supplying heat or injecting biomethane into the gas grid, or the RTFO for transport fuel.

Electricity from biogas combustion (FIT)

Incentive FIT
Eligibility Electricity generating plants under 5MW (FIT is not available if plant has received any other state aid such as a WRAP grant to help with the capital cost of plant)
Tariff rate For latest tariffs, visit FIT - Explained
Tariff length 20 years
Further info DECC website, Ofgem website to apply

Heat from biogas combustion (RHI)

The Renewable Heat Incentive (RHI) supports heat produced from biogas combustion for 20 years. For the latest tariffs if you apply now, visit RHI - Explained.

Biomethane grid injection (RHI)

Injecting biomethane into the grid is also supported for 20 years, at all levels, under the RHI. This incentive was introduced in January 2012, and the latest tariff rates can be found in RHI - Explained.

Biomethane as a transport fuel (RTFO)

The use of biomethane as a transport fuel is supported under the Renewable Transport Fuels Obligation at the level of 3.8 Renewable Transport Fuels Certificates (RTFCs) per kilo of biomethane if the feedstock is from waste sources, and 1.9 RTFCs otherwise. The price of an RTFC is variable, as it is a market-driven mechanism, but is approximately 15-20p/RTFC.