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Biomethane Boon? UK Government Grants NDRHI Extension

Monday, 24 May 2021

A 12-month extension to selected projects with the Non-Domestic Renewable Heat Incentive (NDRHI) scheme will be granted, a move which is aligned with UK decarbonisation goals as well as offering a reprieve from COVID-19 related hold-ups.

The UK department for Business, Energy and Industrial Strategy (BEIS) has increased the budget cap for non-Tariff Guarantee Extensions with the NDRHI.

The UK REA (Association for Renewable Energy and Clean Technology) welcomed the move, but called on the UK government to do even more to promote low-carbon activities.

Frank Gordon, the director of policy at the REA offered:

“We have consistently made the case to government over the past few months to reallocate existing money within the scheme to oversubscribed pots.

“This increase ensures that the majority of projects within this pot will be granted a 12-month extension to account for COVID-19 delays. All of these projects will help progress towards the government’s targets to decarbonise heat, once again showing the strength of the scheme in delivering carbon savings cost-efficiently.

“However, this increase does not cover all projects that remain in queues now the scheme has closed to new applicants. There are still 25 large-scale Tariff Guarantee applications, including biomass CHP and biomethane, which remain in a roadblock and will not be processed unless government increases the budget.

“We urge the government to reconsider the decision to not grant budget to these projects and unlock the further carbon savings these projects can deliver.”

Biomethane and Renewable Heat?

Biomethane production injected into the national gas grid is eligible for support via the NDRHI scheme, even if that biomethane is not slated for heating applications. This is in contrast to other fuels/technologies eligible for support under the scheme, where heat generation is measured.

In the last ofgem (UK Office of Gas and Electricity Markets) annual report on the NDRHI (2019-2020), it was noted that payments made to biomethane facilities accounted for almost 32% of all NDRHI payments to date, with 800 million pounds allocated to biomethane since the start of the program in 2011.

Injected biomethane in the UK is also eligible to receive gas Guarantees of Origin, the most prominent type being RGGOs issued by the Green Gas Certification Scheme administered by REA.


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