Energy White Paper

This paper sets out the Government targets aiming to tackle climate change by reducing carbon emissions and ensure a secure supply of clean and affordable energy.   Anaerobic digestion can contribute to meeting these targets.

The targets set out include;

•  Cutting carbon dioxide emissions by 60% by 2050, with significant ground made by 2020.  

•  Creating 10% of our electricity from renewable sources by 2010, and 20% by 2020.  

Renewable Obligation

The renewables obligation is the Governments main mechanism used to support and encourage renewable electricity producers.   The renewables obligation requires electricity generation companies to source a percentage of their electricity from renewable sources.   This is 7.9% for 2008/09, rising to 15.4% by 2015/16, although it is unlikely that we will meet these targets and the incentives to produce renewable energy will continue.  

Anaerobic digestion is eligible for this incentive which is a green premium for renewable electricity.  

Renewable electricity is traded using renewable obligation certificates (ROCs) which are awarded for every megawatt hour of renewable electricity produced.   The Government fixes ROCs, currently £34.30 per MW.hr, and which rises annually in accordance with inflation.   

These certificates are bought by the electricity generator companies to enable them to meet their targets.   At present the demand for ROCs exceeds their production.   A ROC is therefore trading at a higher price than that set by the Government (buy-out price), with the shortfall value in ROCs not produced recycled and distributed between the ROCs produced.   

Levy exemption certificates (LECs) are also awarded for the production of renewable electricity.   The funding for this comes from the climate change levy, a tax added to energy that is produced using fossil fuels.