Changes to the Renewable Heat Incentive from DECC

24th March 2016

The Government has recently announced plans to reduce its support for payments concerning the Renewable Heat Incentive (RHI). New suggestions through an open consultation were recently released by the Department of Energy & Climate Change (DECC) which outline proposals to decrease payments for all new biomass and biogas [amongst other] installations as a result of sustained uptake.

Along with this consultation, DECC have also stated that they will cut the biogas RHI tariff by 10% as of the 1st April 2016. Plans have also been announced to completely phase out subsidies for any new solar thermal installations, which also claim the RHI subsidy.

DECC announced that whilst they allegedly support the RHI as an element of subsidy payments, these schemes must “deliver their objective in a manner which is affordable and offer value for money.” These reforms will be discussed following the closure of the consultation on the 27th April.

The announcement has caused fresh controversy as landowners and businesses are looking to offset their heat and energy demands by installing biomass or biogas systems, especially at a time when investment in solar and wind schemes to offset businesses carbon emissions is now dwindling.

It now appears that the government are generating uncertainty regarding the RHI as to how long tariff payments will be available for, similar to previous trends for superseded heat & energy generation tariff schemes.

Gasification or cogeneration Combined Heat & Power (CHP) units claim the biogas RHI payment and are fast becoming an attractive investment model in the UK to offset heat and energy demand.

Following a successful accreditation process through the non-ministerial department of Ofgem (The Office of Gas and Electricity Markets) numerous systems are now available which vary in both size and fuel type.

CHP machines generate both heat and electricity by burning wood chip or wood pellets at extremely high temperature in a gasification chamber, this gas then powers an engine in turn generating an electricity output.

If you’d like to learn more about Combined Heat & Power Units and the business opportunity they hold, please email Tom Vaughan or call 01665 511988



Further reading on the consultation from DECC


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