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Renewable Heat Incentive

Given appropriate incentives, biomethane will make a significant contribution to UK gas supplies in the future - one study has
suggested up to half of residential gas demand if all waste were to be directed towards biomethane production.

In addition, the UK has the opportunity to be a European leader in the manufacture of biomethane from waste and its injection
into the gas network.

Biomethane injection is already taking place in Austria, Canada, Germany, Netherlands, Sweden, Switzerland and soon to be
the UK.

Why no biomethane injection in the UK?

To date, a premium has been paid for electricity generated from biogas fuelled engines but there has been no premium for
biomethane injected into the gas grid. Hence it has not made commercial sense to invest in the relatively high costs of
biogas clean-up when there would be significantly less income.

Given that a vibrant AD industry is establishing itself, clean up technology has been proven to work (more than 80 operational
plants in the EU), and good financial incentives are now available.

As a consequence of the 2008 Energy Act Government now has powers to reward biomethane producers for injecting this 
"green gas" into the network. A feed in tariff (FIT) has been announced i.e. an amount of money per unit of gas injected, will be
made available to encourage this environmentally beneficial activity.

When will biomethane injection tariff start?

The tariff is part of the Renewable Heat Incentive (RHI). The Department of Energy and Climate Change (DECC) intends that the
RHI will start in April 2011. Installations completed after 15th July 2009, but before the start of the RHI, will be eligible to benefit
from the scheme as if they had been installed on the date of its introduction.

What is the Feed in tariff for injection biomethane into the national gas grid?

For all scales of size of facility, the feed in tariff is currently 4p/kwh for a guaranteed period of 15 years.
Remember to add the sale price of the gas to calculate your actual revenue stream.

Can biomethane injection start happening sooner than April 2011?

Biomethane injection can start happening prior to April 2011, but is subject to resolution with Ofgem and the HSE of two
relatively minor regulatory issues:

Oxygen specification
Biomethane can contain some oxygen. The UK limits oxygen content to 0.2%, whereas a 1% limit
applies in Europe to facilitate biomethane injection. There are no safety issues associated with the increase in specification
to 1%.

Calorific value measurement
At present there is only one device approved by Ofgem to measure calorific value and this costs over £100,000.
There are much lower cost options used in the EU which are fit for purpose for small biomethane flows - these need to be
approved for use in UK.