The UK Government has provided ‘mixed announcements’ on the Renewable Heat Incentive (RHI) scheme, according to the Renewable Energy Agency (REA).
In an announcement on 28 April, the government confirmed the extension of the domestic RHI scheme for an additional year until 31 March 2022. It will also introduce a 3rd flexible allocation of Tariff Guarantees (TGs) on the non-domestic RHI scheme, which will ensure a ‘smooth transition’ between the RHI and future support mechanisms.
The government said: “Additionally, the introduction of a flexible 3rd allocation of TGs on the non-domestic scheme will ensure that eligible projects currently having difficulty meeting TG deadlines due to issues caused by the COVID-19 outbreak can still access the RHI with a later commissioning date by applying to this TG allocation.”
The commissioning deadline for projects currently holding a TG has also been brought forward to give projects additional time to fully commission in light of delays due to the pandemic. The government statement continued: “The proposals set out will provide support to businesses, many of which are small and medium-sized UK enterprises, including manufacturers, installers and project developers in the low carbon heating sector.”
The REA said that while the announcement provided “much-welcomed clarity” on the completion of projects currently underway, it is “disappointed” by the lack of extension for new non-domestic RHI projects. In a statement, Frank Gordon, head of policy at the REA, said: “Overall, these are mixed announcements for the renewable heat industry.
“On the one hand, they have provided much-welcomed clarity on the completion of projects currently underway, the prospect of new projects and the government’s commitment to green gas. This is a step in the right direction for the sector, providing the certainty needed to increase investor confidence and deploy much-needed renewable heat technology.
“On the other hand, we were disappointed by the lack of extension for new non-domestic RHI projects and the implications the cap on the future grant scheme will have. Both of which could result in businesses being unable to finish their projects or continue to operate at a time when the industry needs to be bolstered to achieve our legally binding net-zero targets.
“Going forward, if we are to decarbonise heat in line with the Committee on Climate Change’s recommendations, the government must ensure that all renewable heat technologies have a fair route to market.”