Government Grants for Anaerobic Digestion Plants
Grants play a vital role in facilitating the transition from fossil fuel energy to clean energy sources. Due to the significant expense of building anaerobic digestion plants and the long payback period, government backing in the form of grants is often required to ensure project viability and profitability.
How Much Does It Cost to Build An Anaerobic Digestion (AD) Plant?
The overall cost of building an Anaerobic Digestion (AD) Plant depends on the size of the project. A full municipal Energy from Waste (EfW) AD plant costs around £130-£150 million. Wakefield’s EfW plant, for instance, which was built in 2015, cost around £100 million to build. The smallest on-farm AD plant on the other hand would cost a minimum of £66,000 to install, according to a 2020 report from Natwest.
Government Incentives
Below, we’ll outline the various government grants and incentives available in the AD industry.
The Green Gas Support Scheme (GGSS)
The GGSS is a governmental environmental scheme offering financial aid to new anaerobic digestion biomethane plants with the goal of increasing the percentage of green gas representation in the gas grid.
The grant opened to applicants on 30th November 2021. It was initially due to last 4 years, meaning it will close in November 2024. However, after consulting with the industry over the supply chain issues and other delays to deployments of new plants, the UK government has agreed to extend the scheme until 31 March 2028.
Registered participants receive quarterly payments over a period of 15 years. The amount received is dependent on the quantity of eligible biomethane that a participant introduces into the gas grid.
Contracts For Difference
Introduced in October 2014 to replace the UK's Renewable Obligations system, Contracts for Difference (CfD) provide financial support for large-scale renewable projects (over 5MW) over a 15-year period. Run by the government-owned Low Carbon Contracts Company (LCCC), CfDs operate around a "strike price" system, based on the market price difference. If the “strike price” is higher than the market price, the CfD Counterparty must pay the renewable generator the difference, and vice versa. Eligible technologies include wind, solar, geothermal, hydropower, as well as, of course, anaerobic digestion.
Renewables Obligation Certificates (ROCs)
Whilst not a grant as such, the ROCs scheme helps approved, large-scale renewable energy producers over the long-term. It does this by creating an obligation for fossil fuel energy companies to off-set their emissions by purchasing clean-energy certificates from renewable generators.
WRAP
Wrap is an organisation promoting practical improvements in the circular economy and green industry. It administers several grant funding schemes on behalf of other charities and government bodies. They are the leading Earthshot partner for the prize “building a waste-free world”.
What To Do if Your Venture Is Not Eligible For Government Grants
While Anaerobic Digestion is currently a key policy in the UK government goal to enhance energy security and combat climate change, it is likely that private investment will take over incrementally as the industry matures.
If you find yourself ineligible for government grants, you may look to ethical companies and individual investors who are looking to put money into green energy. There are a number of venture capitalist and pension fund administrators specialising in these markets.
An example of how a publicly owned lender has been transferred to private hands is the Green Investment Bank. Started by the UK government to stimulate large-scale green energy innovation, it was bought by Macquarie Group in 2017 and renamed The Green Investment Group. It is still an investor and lender focusing on novel innovations and companies working on climate-positive ventures with higher-than-average financial risk.
To find out more, please feel free to download our Anaerobic Digestion Guide. In the meantime, speak to the experts at Atlantic Pumps by filling out our enquiry form.
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