Ofgem making ‘a mockery’ of circular economy with reform, says ESA

The Environmental Services Association has raised concerns over Ofgem’s recently announced decision to reduce payments to small decentralised generators by almost 95%.

A trade association of companies in the UK’s resource and waste management industry, the ESA says that Ofgem’s reforms “make a mockery” of circular economy ambitions. Ofgem is the independent energy regulator for Great Britain.

In a recent announcement, Ofgem announced it would cut payments from £45kw/h to between £3kw/h and £7kw/h over the course of three years. ESA said this would hit small scale renewables, such as energy from waste and anaerobic digestion plants.

“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,” said ESA’s executive director, Jacob Hayler, in a statement.

“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.”