Government opens £3m fund to drive small-scale AD
Farmers have been given access to a £3m pot of funding to help them build anaerobic digestion (AD) plants.
The government-funded loan scheme, which opens today, will allow farmers to apply for up to £400,000 from the 'AD Loan Fund' to help them finance on-site AD technology.
Establishing on-farm AD will help save farmers money on energy, while the bio-fertiliser created by the process of turning organic waste into energy can also be used to replace some of the artificial fertilisers farmers would otherwise have to buy.
Farmers will also be entitled to incentives for producing renewable energy, though the government has recently proposed cuts to one of the schemes.
Liz Goodwin, CEO of WRAP, said access to finance for on-farm AD has been difficult, especially for small-scale operations.
"Currently there is no targeted financial support available to increase this capacity," she explained, adding: "The On Farm AD Fund has been designed to both attract funding into the sector, and to provide support and materials for farmers to help them access finance in the future."
The use of this form of technology on farms is an essential part of the government's plans to invest in infrastructures to help businesses grow and boost the rural economy.
The renewable energy Feed-in Tariff (FiT) has helped support the growth of the AD sector.
However, the department for energy, is currently threatening to make changes that some say could disadvantage the smaller-scale AD sector (under 500kW) compared to the more established market for larger plants.
The main concern relates to changes to the FiT incentive regime: from April 2014 DECC has proposed a 20% cut in the incentive for small-scale AD plants as part of its degression mechanism for financing renewables.
A spokesman for ADBA told edie that the proposal is "a big concern" and the organisation is working hard with officials at the department to find a compromise.
Writing in last month's issue of sister title, LAWR, marketing director at food sector AD specialist Cleafleau, Richard Gueterbock, highlighted the issues: "The small-scale AD market needs a strong policy framework to encourage adoption of all renewable technologies but also to support innovative companies that are building smaller plants on industrial, farm and community sites.
"On-site AD can provide many benefits for industrial sites, including lower energy and treatment costs. These deserve greater recognition in the food and drink industry but also by government and regulatory bodies," he added.