Posted on 8th March 2016 in 
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On 3 March 2016 DECC launched a consultation to reform the Renewable Heat Incentive, which supports the uptake of renewable heat systems. The consultation proposes reductions to tariffs that support growth in the biomass heat industry, which has delivered the majority of the UK’s legally binding renewable heat target to date. It also holds consequences for the anaerobic digestion industry, which has also been recently negatively impacted by reductions in the Feed-In Tariffs and extremely tight deployment caps.
As highlighted by the Renewable Energy Agency and other industry stakeholders, the most significant changes proposed within the consultation are the reduction of biomass tariffs by up to 61%, the reduction or removal of support for energy crops used in Anaerobic Digestion and ending of support for digestate drying and the total removal of solar thermal from the RHI.
DECC expects that changes to non-domestic biomass support will reduce annual installations from 7,132 systems in 2014, and 3,023 in 2015, to only 65 systems by 2021. This represents a reduction the installation of biomass boilers of 99.1% and 97.9% compared to 2014 and 2015 respectively. The proposals foresee the installation of 1,000 domestic biomass boilers per year by 2021, compared to 4,721 in 2015, a fall of 78.8%.
The proposed changes add to existing concerns about the direction of energy policy and the growth of the renewable energy sector in the UK which has been hit hard over the last year by various changes to financial support mechanisms and planning policy guidance. Also published by DECC on 3 March 2016 was a report into investor confidence in the UK energy sector which adds further weight to concerns, concluding as it does that the government’s energy policy lacks long-term vision and this has “clearly had an impact on the confidence of many investors”.
The full RHI consultation document can be found here and responses can be submitted until 27 April 2016.
