Commission pulls plug on RHI

14th October 2011


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  • Mitigation ,
  • Renewable ,
  • EU

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IEMA

DECC has been forced to postpone the launch of the Renewable Heat Incentive (RHI) after the European Commission (EC) failed to give state aid approval for the scheme

The EC refused to approve the scheme due to concerns that the tariff for large biomass installations is set too high.

The RHI was given the green light by the government in March and was due to begin taking applications, mainly from big heat users in industry, on 30 September. DECC says that it will now have to alter the large biomass tariff before resubmitting amended RHI Regulations to parliament for approval.

“We are committed to launching the scheme as soon as possible to minimise disruption to stakeholders,” said the official DECC statement. A spokesperson for the energy and climate change department told the environmentalist that it hopes the scheme will be up and running by the end of November.

The changes to the RHI will affect large biomass installations over 1,000kWth, which under the government’s existing proposals would attract a tariff rate of 2.6p per kWh over a 20-year period.

Potential suppliers and customers have lambasted the government for not having secured EC approval in time for the launch.

“The announcement for RHI funding was made in the Comprehensive Spending Review last October so the government should have ironed out the wrinkles well in advance of the launch date,” said William Worsley, president of the Country Land and Business Association.

The previous government had proposed the RHI and it was originally due to start in April 2011, but the coalition put back the start date by six months following the election.
There is a fear that the latest delay will further damage investor confidence, which has been hit by the recent changes to the feed-in tariff.

“The UK government has repeatedly put off the implementation of the RHI, resulting in potential customers holding off purchasing decisions and technology providers hesitating to invest in the supply chain,” said Dr Jonathan Scurlock, renewable energy and climate change adviser at the National Farmers’ Union.

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