The government has introduced two main incentive schemes which may be applicable to distilleries; the Feed in Tariff (FIT) for local power generation, and the Renewable Heat Incentive (RHI) for local heat use from renewable sources. Dependent on the technologies used either or both of these tariffs may be applied for. A brief explanation of both schemes as they can be applied to distilleries is given below. Full information on both these schemes is available from DECC website sections on FITs or RHI
Feed in Tariff
- Power generated from biogas produced by Anaerobic Digestion of distillery co-products can earn 11.5p/kWhe for CHP or Generators of up to 500kWe installed capacity and 9p/kWhe for CHP or Generators over 500kWe installed capacity.
- The FIT is earned for power generated regardless of whether it is used on site to replace grid imported power, or exported to the grid.
- Power exported to the grid and not used on site may earn export tariffs of 3p/kWhe or be sold directly to a power distributor via a power purchase agreement. This should be balanced against the ability to use power on site and displace grid imported power charged at a higher rate.
- FIT rates are guaranteed for 20 years from when the FIT is granted and will rise annually with inflation.
Renewable Heat Incentive
- Heat from biogas combustion may earn 6.5p/kWth for plant up to 200kWth installed capacity.
- In order to earn RHI, heat must be meterable and used for a new or existing load such as space heating, hot water or steam in a fully enclosed structure.
- Heat used for absorption chilling is eligible for RHI.
- The tariff is not available for heat used within system boundaries (e.g. recycling heat from a biogas generator or co-generation system to supply parasitic heat load of an anaerobic digester or use of heat to dry draff if the draff is to be then used as fuel).
- The tariff is not available for existing non-renewable fueled plant converted to use biofuels (e.g. fuel conversion of boilers or use of biogas or biomethane in existing gas fired boilers).
- Existing renewable generation (e.g. biogas generators) which have heat recovery retro-fitted may qualify for RHI if the heat can be used for an eligible demand.
- RHI rates are guaranteed for 20 years from when the RHI is granted and will rise annually with inflation.