Ofgem Sustainability Audit RO – Biogas

The Renewables Obligation Order and Ofgem require an Independent sustainability audit for generating stations with a TIC ≥1MW. The audit must be performed in accordance to the International Standard for Assurance Engagements (ISAE 3000). The date of report submission is by the 30th June each year for biogas installations.

EnviroSense is a provider of assurance engagements in the biomass, biogas and bioliquid industry.

Below is a summary of the Ofgem guidance, the sustainability criteria and audit requirements which are included for your information and further reading. Alternatively, contact us directly with any questions you may have. We shall be pleased to answer any questions.

Ofgem Sustainability Audit and Annual Report
The sustainability audit, often referred to as the, “Ofgem Sustainability Audit” is required for biogas stations with a total installed capacity (TIC) ≥1MW. The purpose is to provide independent assurances to Ofgem that the sustainability criteria have been met. This is an annual requirement. All biogas stations claiming ROCs over ≥1MW have to be audited and must provide the results of the audit to Ofgem in a sustainability audit report. The audit report must be conducted and compiled by  the independent audit company and verify if sustainability information reported to Ofgem are accurate. The audit should also verify the generating station is adhering to their procedures as stated in the Fuel Measurement and Sampling (FMS) procedures. The actual Ofgem sustainability criteria are laid down in the Renewables Obligation Order 2009 (as amended) and Ofgem guidance.

At present, biogas generating stations that generate electricity from biogas do not have to meet the sustainability criteria in order to receive financial support in the form of ROCs. Therefore biogas sustainability is not a condition at present. However, reporting is conditional and ROCs can be withheld in the absence of complying the RO requirements for an annual sustainability audit or claiming ROCs on fossil fuel contaminated feedstocks.

Biogas Sustainability and the Sustainability Criteria
Anaerobic digestion facilities have the added benefit of frequently receiving waste biomass which is exempt from sustainability requirements. If the feedstock is not waste then greenhouse gas emissions and land use sustainability criteria apply.

For the feedstock to be classed as waste it must meet the principles of waste as defined in the DEFRA ‘Guidance on the legal definition of waste and its applications’ published in 2012 though this guidance is not definitive and in general terms this is material that the user discards, intends to discard or must discard. Particular cases should be discussed with Ofgem in order for the definitions of waste to be compatible with the Renewables Energy Directive (RED).

Anaerobic digestion plants frequently receive waste and as a consequence the Ofgem sustainability audit may be limited in general terms to verifying if the feedstock is definitely waste, verification of correct designation of consignments, amounts of feedstock and Nm3 of gas produced per feedstock and use of the apportioning tool if applicable, mass-balance or accounting of any stock carried over into the next month, gross calorific values (GCV) per feedstock and processes and systems in place to manage and store accurate report data.

Greenhouse gas emissions (GHG) must meet or be below threshold values in order for the feedstock and gas production to be classed as sustainable. An operator of a generating station using biomass to generate biogas must report their GHG emission value in grams of CO2 per MJ of electricity. This means that for most operators, the relevant GHG emission threshold is 79.2 gCO2eq/MJ electricity. An operator of a generating station that meets the definition of ‘post-2013 dedicated biomass station’ will be required to report against the GHG emission threshold of 66.7 gCO2eq/MJ electricity.

The key steps in calculating greenhouse gas values can be summarised in three emission stages as referenced in Ofgem sustainability criteria guidance:

Simplified fuel chain for biogas

Simplified fuel chain for biogas

The above is a simplified chain. In reality the elements will involve more stages as in the example below:

Actual fuel chain to biogas AD plant

Actual fuel chain to biogas AD plant

Two methods are available for calculating greenhouse gas values of biogas feedstocks lifecycles; Actual Value method and the Default Value method. For generating stations with a DNC ≥1MW then either method can be used. The Actual Value method can be time consuming as a large amount of accurate data is required that will need to be verified by the auditor. Not all values must be actual values, standard input data from reference sources can be used. Default Value method uses conservative values and if the final greenhouse gas value is near the threshold the operator of the generating station may then elect to use the Actual Value method and aim for a saving based on more accurate and less conservative values.

Sustainable Biogas and Land Use
Crops, organic residues and matter used for biogas production will not be eligible for ROCs if the land:

  • At any time during or after January 2008 was primary forest
  • At any time during or after January 2008 was land designated for nature protection purposes (unless production of that biomaterial did not interfere with purposes for which this land was designated)
  • At any time in January 2008 was peat land (unless the cultivation and harvesting of biomaterial did not involve the drainage of previously un-drained soil).

A variety of practical methods and information sources can be used to substantiate that land was not converted after 2008 for the purposes of use by generating stations.

The Ofgem Sustainability Audit Report
The Ofgem sustainability audit and formulation of a report must be performed in accordance with the International Standard on Assurance Engagements (ISAE) 3000. The Renewables Obligation specifies points that must be addressed as part of the audit process which include the need for the auditor to consider:
whether the systems used to produce the relevant sustainability information are likely to produce information that is reasonably accurate and reliable whether there are controls in place to help protect the relevant sustainability information against material misstatements due to fraud or error
the frequency and methodology of any sampling carried out for the purpose of obtaining or checking the data on which the operator relied in preparing the relevant sustainability information
the robustness of the data on which the relevant sustainability information was produced.

In addition to making a clear statement expressed in the negative form, such as “nothing has come to our attention that the Operator has not reported submissions accurately”, the auditor must state whether anything has come to the attention of the person conducting the assurance engagement and preparing the report to indicate that the relevant sustainability information is not accurate.

Impartiality is a condition of conducting the audit. Any other direct services or activities performed by the audit company that may influence the outcome may invalidate the audit and be called into question by Ofgem. Such instances could result in the Ofgem sustainability audit having to be performed again by a separate party. Hence there is a need to conduct a brief evaluation of suppliers and companies involved prior to commencing the Ofgem sustainability audit.

Ofgem Sustainability Audit Report Recommendations and Adding Value
Ofgem have highlighted the fact the recommendations can be made in the audit report provided these do not alter the validity of the attestation statement. The attestation statement must be clear and unambiguous.

Auditors from EnviroSense will highlight options where they believe improvements could be made, or potential information sources could be utilised to aid the client. These are optional, not conditional or are a criticism. The intention is that the recommendation can be reviewed at a later point by the company should they wish to revisit the sustainability audit outcome and report. At no point will a recommendation invalidate the attestation statement or affect the outcome of the audit.

Why EnviroSense?
EnviroSense is a trusted third-party. We have worked with many companies in the biomass industry and have several non-disclosure agreements in place as we recognise the sensitivity of much of the information involved in the audit, especially supplier and customer details, feedstock sources, costs and joint ventures or planned business. The audit report is the property of the client – the operator of the generating station and cannot be disclosed or used for any other purposes than its intended use.

EnviroSense have years of experience in a variety of sustainability audits including attestation engagements (ISAE 3000) for non-financial information and we understand the need to work with companies to provide a valued service. This means a positive approach when conducting audits and providing trusted advice or interpretation of the finer details of the sustainability criteria.

Contact Richard Watkins, Emma Hughes or Robin Askey if you have any questions:

e: info@envirosenseltd.co.uk

p: 01531 637396

To contact the Lead Auditor directly, Robin Askey:

e: robin@envirosenseltd.co.uk

m: 07799 032253