Ofgem Sustainability Audit RO – Bioliquid

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 31st May each year.

EnviroSense is a provider of assurance engagements in renewables industry.

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

No-6

Ofgem Sustainability Audit
Generating stations using bioliquids to generate electricity must meet the sustainability criteria in order to receive financial support in the form of ROCs. The sustainability criteria also applies to microgenerators (DNC equal to or less than 50kW). Evidence is required to demonstrate that the operator of the generating station complies with the sustainability criteria and this should be retained for the annual Ofgem sustainability audit and finalisation of a sustainability report.

The report must be conducted and compiled by an independent auditor and verify if sustainability information reported to Ofgem and included in the Fuel Measurement and Sampling procedures (FMS) is correct. The actual sustainability criteria is laid down in the Renewables Obligation Order 2009 (as amended and a new 2015) and Ofgem sustainability criteria guidance. Essentially the sustainability criteria centres around two points; lifecycle greenhouse gas emissions and land use.

Bioliquid Sustainability and Lifecycle Greenhouse Gas Emissions
In broad terms the three main steps in calculating greenhouse gas values can be summarised as below:

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The above is a simplified chain. In reality the elements will involve more stages such as below (from Ofgem guidance):

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Three methods are available for calculating greenhouse gas values of bioliquids; Actual Value Method, Default Value Method or Mixed Value Method and this depends if cultivation is within the EU, NUTS2 (areas within territories where default carbon intensities for feedstock cultivation can be used if higher than the NUTS2 feedstock cultivation value) or if the DNC is less than 1MW.

Bioliquid Sustainability 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.

Bioliquid Sustainability Recognised Voluntary Schemes
In 2012 Ofgem commissioned a benchmarking study of voluntary schemes that comply or partially comply with the sustainability criteria. Unfortunately the revised benchmarking study mainly addresses solid wood schemes and the Timber Standard which is not applicable to bioliquid. Bioliquids can be extracted from crops certified under the Natural England Energy Crop Scheme are regarded as be meeting the land criteria and therefore be sustainable if GHG emissions thresholds are met.

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. Issuance of a grant or financial assistance to energy crop growers made under the Energy Crop Scheme provides evidence to substantiate the sustainability criteria has been met.

The Ofgem Sustainability Audit Report
The audit report must be performed in accordance with the International Standard on Assurance Engagements for non-financial information (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, the auditor must state whether anything has come to the attention of the person 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.

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 negative and the intention that the recommendation can be reviewed at a later point by the company to consider. 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.

EnviroSense have years of experience in a variety of audits including performing attestation engagements 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 us if you have any questions, please do ask: 01531 637396

Or feel free to contact the Lead Auditor directly with any questions you may have – Robin Askey: 07799 032253.