The Department of Energy and Climate Change (Decc) has proposed either a banded or a tiered system of support would encourage biomethane development in a “cost-effective” way.
The banding proposal would define capacity bands for the technology, with different amounts being paid to plants of different capacities.
The tiered system would pay a higher amount to the first designated amount of kWh of green gas injected into the grid, and a lower amount for subsequent injections.
Under the tiered system, a cap of 15,000 MWh could be introduced, where by anything under that amount injected into the gas grid receives 7.1p/kWh, and anything over it does not get any payments.
Nina Skorupska, chief executive at the REA, said the “the pace and depth of the changes give real cause for concern” and the plans could put large biomethane projects at risk.
She added: “Shrinking the tariff so it only works for very small plants is simply inefficient in terms of maximising the value of the biomethane stocks.
“The whole industry is going to have to work hard, fast and smart to ensure these proposals help rather than hinder the sustainable growth if the UK green gas industry.”
The consultation closes on 27 June 2014 at 11:45pm.