Government proposes a 98% fall in the deployment of one of the most cost-effective renewable heat systems
- DECC has today launched a consultation to reform the Renewable Heat Incentive, which supports the uptake of renewable heat systems
- DECC proposes to reduce biomass boiler tariffs by up to 61% by 2017 after some tariffs have already been slashed 58% during the last year, with significant consequences for the overall biomass supply chain
- The Energy and Climate Change Committee this week has released a report into investor confidence in the UK energy sector, which said the government’s energy policy lacked long-term vision and had “clearly had an impact on the confidence of many investors”
Significant changes to the Renewable Heat Incentive (RHI) proposed today by the Department for Energy and Climate Change (DECC) pose a 98% and 78% reduction in the deployment of biomass boilers by 2021. If enacted, the Renewable Energy Association (REA) argues that this would collapse an industry that the government has invested in for over five years and side-track progress on meeting our renewable heat targets.
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.
The most significant changes that the Department of Energy and Climate Change has proposed 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
- The 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%.
Frank Aaskov, Policy analyst at the Wood Heat Association (REA subsidiary) said:
“The government has now proposed to further reduce biomass boiler tariffs by up to 61%, but many tariffs have already been cut by 58% since July 2014. This new proposal would make most biomass heating projects unviable, and represents a dramatic 98% reduction in deployment.
If these proposals are enacted, it would represent the loss of five years’ worth of government effort and investment that have helped built a mature and stable industry. Biomass represents the majority of the decarbonisation of the UK heat sector, and 89% of the renewable heat in Europe.
Biomass heating has been vastly popular among small and medium care homes, schools, the agricultural sector, and offices. It has been hugely successful at replacing more expensive fossil heating with a renewable and sustainable alternative.”
Dr. Nina Skorupska CBE, Chief Executive of the REA said:
“The REA has a long-term vision for an affordable, secure, and low-carbon future energy system. Consultations such as this however make apparent that the Government’s own energy policy is short-sighted.
This consultation proses yet another series of sudden and severe changes to the UK’s energy sector. The Energy and Climate Change Committee this week said that such changes have “marred the UK’s reputation for stable and predictable policy development,” and we couldn’t agree more.
“We are also disappointed to see solar thermal being singled out and removed from the RHI. We need the entire spectrum of renewable heating to fully decarbonise.”
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Notes to editors
- The RHI is the central policy tool used by government to meet the UK’s legally binding renewable heat targets. Within it, biomass boilers are the most widely adopted and cost effective means of reducing emissions in the heating sector. Biomass is subject to strict UK and EU sustainability standards, and has a track record of reducing fuel bills in rural and fuel-poverty impacted regions. The industry experienced significant cuts already in 2015, as some tariffs already have been reduced by 58%.
- The RHI was first introduced for non-domestic applicants (commercial, industrial, public sector, not for profit and systems heating multiple domestic dwellings) in November 2011 and was expanded to include domestic households in April 2014.
- The scheme is very popular with both consumers and industry, which has supported a wide supply chain, thousands of jobs, skills development, and attracting millions in investments. Two-thirds would not have installed renewable heat system without the RHI, and 88% of applicants are so satisfied that they would recommend their renewable heat technology to others.
- Biomass has made up 92% of installations and 86% heat generated under the non-domestic RHI.
- The Energy and Climate Change Committee’s Investor Confidence in the UK Energy Sector report can be found here.
About the Wood Heat Association (WHA)
The WHA is the UK trade association for the modern wood heating and related biomass heating industry including wood fuel suppliers, biomass boiler and stove installers and distributors, and anyone involved in the supply chain. The WHA is a fully owned subsidiary of the Renewable Energy Association. Members range in size from major multinationals to sole traders.
About the Renewable Energy Association (REA)
The Renewable Energy Association represents renewable energy producers and promotes the use of all forms of renewable energy in the UK across power, heat, transport and renewable gas. It is the largest renewable energy trade association in the UK, with approximately 750 members, ranging from major multinationals to sole traders. For more information, visit: www.r-e-a.net