Ofgem decision to cut payments to small, sustainable generators ‘makes a mockery of circular economy ambitions’, says ESA

The Environmental Services Association (ESA), the voice for the UK’s resource and waste management industry, has raised concerns over Ofgem’s decision to reduce payments to small decentralised generators by almost 95%.

Ofgem has announced its decision to cut the payments from £45/kW to between £3/kW and £7/kW over three years, which will hit small-scale renewables, including waste-fuelled electricity generated by Energy from Waste, Anaerobic Digestion and landfill gas.

On 21 June, ESA’s Executive Director, Jacob Hayler said:
“Ofgem has ignored our concerns about the scale of the proposed cuts to small, decentralised, low-carbon generators. Not only does this decision endanger the UK’s renewable energy commitments, it also makes a mockery of our Circular Economy ambitions by disincentivising resource efficient use of waste as a fuel. The removal of these payments will raise costs of waste management for local authorities at a time when services are already under threat.

“Energy generated from waste is a reliable source of low-carbon baseload electricity which contributes to the UK’s security of supply whilst keeping costs down for consumers. Despite the Government’s pronouncements on the importance of diversifying the energy mix, Ofgem has favoured big fossil fuel power stations over smaller more sustainable generators which could now be forced out of the market. As ESA has said in the past, network charging is highly complex and these changes should not be made in isolation or they risk unintended consequences.”