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Latest RHI Announcements

In the latest round of announcements on the Renewable Heat Incentive (RHI), the Government has released the outcomes of two consultations on the non-domestic scheme and further details on the domestic scheme.

In the non-domestic, there was good news for large scale biomass (1MW) with a tariff uplift to 2p/kWh. Whilst it may be considered that the tariff could be even higher, this is still a welcome step towards incentivising more deployment for this size of installation.

In addition, budgets for all technologies have been reviewed. The high deployment levels for medium scale biomass (200kW-1MW) have meant that this size of installation has already met its trigger point for degression once.  And small scale biomass (<200kW) has come very close to its degression trigger. The changes to the budget have increased the level of expenditure available to small and medium scale biomass before degression (by £15.9m and £13.4m respectively) whilst reducing the amount available to large scale biomass (-£47.7m) which is deploying in much lower volumes at present – though this could be due to the low tariff. Although the overall budget for biomass is now lower, the changes put in place reduce the prospect that growth in the small and medium segments will be restricted in 2014 and therefore the deployment outlook is arguably brighter.

Other changes include a decision to postpone the implementation of mandatory GHG lifecyle emissions, due in spring 2014 to autumn 2014. This is a welcome development which will allow industry more time to gear up for the changes. The RHI policy has also been amended so that sustainability standards are not grandfathered and government stated an intention to implement land-use sustainability criteria by 1 April 2015.

Also announced recently were further details of the domestic RHI scheme under which a biomass tariff of 12.2p/kWh be available to householders from spring 2014. Similar to the non-domestic scheme the latest announcement confirmed the postponed implementation of the need to source fuel from a ‘Biomass Supplier list’ until autumn 2014. Participants will be encouraged to do so if possible as soon as the scheme launches but will not be obliged. This ‘grace period’ will help suppliers to monitor processes in light of the sustainability criteria and build the necessary audit trail to demonstrate compliance once it becomes mandatory. An actual launch date for the domestic scheme is yet to be provided but it is still expected in spring 2014.

The non-domestic scheme is due for its next review in 2014 and the government are already beginning to define the scope for this. Therefore, along with the launch of the domestic RHI scheme there will be plenty more interesting developments on the RHI next year. Watch this space!

Expanding the non-domestic scheme

Non-domestic RHI early tariff review

Further details of the Domestic RHI 

James Higgins

Ecuity Consultancy  

Equity's mission is to make sustainable energy mainstream by using our unique strategic insight to connect the commercial day to day reality of running a business and the political challenges of sustainable energy policy making. www.ecuity.com