London: The UK government has decided not to extend financial support for small-scale biomass generators once their existing Renewable Obligation (RO) support expires, prompting criticism from renewable energy and waste industry groups, Bioenergy Insight reported.
The decision covers installations with capacity of less than 100 MW, including anaerobic digestion, sewage gas and energy-from-waste facilities. Existing RO support will gradually expire between 2027 and 2037, with the government not planning a replacement subsidy scheme.
Energy Minister Michael Shanks confirmed the decision, with the Department for Energy Security and Net Zero arguing that continued support would not provide sufficient value for money for billpayers compared with the contribution these facilities make to the electricity system.
The National Energy System Operator (NESO) has advised that the reduction in generation capacity following the expiry of RO support would be relatively small and could be managed through existing market mechanisms.
However, industry bodies have criticised the move. The Renewable Energy Association (REA) described the decision as short-sighted, arguing that it fails to account for the wider benefits of regional biomass infrastructure, including waste management and the circular economy.
The Wood Recyclers’ Association has also warned that the loss of biomass outlets could affect the UK’s waste wood processing sector. Without guaranteed revenue, some smaller plants could become economically unviable and shut down despite continued availability of suitable feedstock.
The impact is likely to vary among operators. While some facilities may remain profitable through wholesale electricity revenues, plants with higher operating costs or less favourable locations could face difficult decisions over continued operation and investment.
The decision highlights the UK government’s broader shift from subsidy-supported renewable energy towards market-based mechanisms. However, industry groups argue that small-scale biomass and waste-to-energy facilities have wider environmental and waste-management benefits that are not fully reflected in electricity market revenues.
Further clarity on the RO expiry schedule and any alternative policy measures is expected as the government works through implementation details.
